Ben Thompson has a great take on this... https://stratechery.com/2017/amazons-new-customer/
Essentially amazon develops services and buys the best customer for said services to ensure they get used.
They did it with AWS, they've done it with their retail business, and now they're probably going to do it with AmazonFresh/WholeFoods. It makes a lot of sense, and it offers them a lot more flexibility to use the platforms they build in other ways too.
PS: If Amazon was a nuclear reactor, letting others on their network as an additional business model, then everybody would probably be opposing this.
AWS is like any other hosting provider that also happens to have one really large customer, Amazon the e-commerce company.
Now, a nuclear powerplant is not going to co-locate with a regular hosting provider because they do not need to move any of that data off-site and co-locating others on their network would mean co-locating those others on the far side of their firewall, or in some kind of DMZ. Nuclear power plants tend to concentrate on what is their main reason to exist: to produce power, not to get into the hosting business so for them it would make absolutely no sense to allow others on their networks, besides any security risks that might cause. You could even argue that the only safe way to connect a nuclear plant to the internet is 'not'. Airgap the thing and call it a day, don't even try to secure it. For Amazon this is - for obvious reasons - not an option.
So for Amazon the company the decision to create a web hosting service which then has their e-commerce arm as one of the tenants (each behind their own (virtual) firewall) is no different at all than Amazon the company buying their hosting from any other provider (Microsoft, Google, Rackspace and so on). They have to host somewhere, no matter what. In which case they have all of the downsides of the current situation and none of the upsides. The impression that you are on Amazon's internal network when you are co-locating with AWS is where things no longer align with how things work from what I know about their infrastructure, AWS allows the creation of VLANs for segregation purposes which is roughly the level of separation that you would expect of any multi-tenant network.
So in that sense Amazon is not less secure than any other corporate setup, the only way in which that sort of situation could lead to trouble is if you managed to find an exploit in the network stack (for instance: the firmware of a switch or router) that Amazon operates that would expose traffic from one tenant to another.
But I'm not aware that any such breach has ever happened, in theory it could happen but that goes for any other hosting provider as well.
What level of compartmentalization would you be comfortable with?
AWS wasnt their "spare capacity" nor was it them exposing their internal systems to the world so they could sell them off, It was developed from day one as a public facing service.
Sure, the intent was Amazon IT would eventually move to that system. But, they could let other companies work out the issues first vs. risking their main website. Just consider the risk for them if AWS goes down and take their own site outline while they are trying to sell high up time. That's simply a risk they had no reason to take.
PS: Remember, well executed traditional large scale infrastructure has higher up-time than AWS because AWS adds complexity.
To make the statement today that Amazon "probably still is" the primary target customer betrays a lack of understanding of the scope of AWS and IaaS in general.
[1] It might be even 8+ years. I don't recall when it officially started so using 5+ as a very conservative estimate.
- the external customers get priority because they're real customers that pay real money.
- the internal customers get priority either because they're the "real" business of the company or because they have the right connections
Amazon uses a very tiny fraction of AWS, but I'm willing to bet that their bug reports and feature requests are accorded a fairly high priority.
Many, many have tried to transition to services. Amazon figured it out.
I was totally invested in Sun's grid computing vision, so I was very slow to recognize AWS. We already had VMs on servers and I couldn't wrap my head around virtualizing everything. It just seemed like so much monkey motion (too much work).
Even so, AWS is slowly, painfully recreating grid computing. By bundling up those services. But unlike Sun, AWS found an incremental path, with many, many ways to monetize along the way.
Google needed email to run it's business. They built a customer facing service around it.
Computing answers is their thing. With their machine learning cloud services, anyone can compute answers for their complex problems.
Companies that stagnate tend to iterate, with little to show for it, on a few "core" products.
While they're too big to collapse altogether, I'd put Oracle, MS, Yahoo, and numerous others in that group.
Possibly Facebook. They're no where near as diversified as Amazon or Google. If the bottom falls out on buying eyeballs, they're in for a world of hurt.
Please explain
It's an interesting take. But it is also how many analysts thought that Walmart would kill grocery stores. I personally don't think that Amazon will fare much better than Walmart... shopping for groceries is fundamentally harder online, and Amazon hasn't demonstrated any magic that makes that easier.
There has been a large amount of food deflation over the past few years, the nation's largest Grocer Kroger cites Wal-Mart as a large contributing factor to this. http://www.businessinsider.com/walmart-is-cutting-prices-201...
Grocers margins are already razor thin, have you been paying attention to Kroger's stock price