AWS Story: Internet’s OS
The origins of AWS as a developer tool can be traced all the way back to 2002
A Brief History of AWS
The origins of AWS as a developer tool can be traced all the way back to 2002, when an initial beta was released (named Amazon.com Web Service) that offered SOAP and XML interfaces for the Amazon product catalogue. This welcome mat for developers was the first step by Amazon to embracing the potential of developer-friendly tools, particularly in an infrastructure space, as an actual product.
Amazon.com’s Transformation Story
Prior experience with building Merchant.com, Amazon’s e-commerce-as-a-service platform for third-party retailers to build their own web stores, led them to pursue service-oriented architecture as a means to scale their engineering operations led by the then CTO, Allan Vermeulen.
API to API Communication
Around the same time frame, Amazon was frustrated with the speed of its software engineering and sought to implement various recommendations put forth by Matt Round, an engineering leader at the time, including
- Maximization of autonomy for engineering teams,
- Adoption of REST,
- Standardization of infrastructure,
- Removal of gate-keeping decision-makers (bureaucracy),
- Continuous deployment.
He also called for increasing the percentage of the time engineers spent building the software rather than doing other tasks. Amazon created “a shared IT platform” so its engineering organizations which were spending 70% of their time on “undifferentiated heavy-lifting” such as IT and infrastructure problems could focus on customer-facing innovation instead.
In July 2002, Amazon.com Web Services, launched its first web services opening up the Amazon.com platform to all developers. Over a hundred applications were built on top of it by 2004. This unexpected developer interest took Amazon by surprise and convinced them that developers were “hungry for more.”
Product Story: Amazon Web Services
As of 2006, over 150,000 developers were already on AWS.
The Mandate from Jeff Bezos
Jeff Bezos issued a mandate. He’s doing that all the time, of course, and people scramble like ants being pounded with a rubber mallet whenever it happens. But on one occasion — back around 2002 I think, plus or minus a year — he issued a mandate that was so out there, so huge and eye-bulgingly ponderous, that it made all of his other mandates look like unsolicited peer bonuses.
His Big Mandate went something along these lines:
- All teams will henceforth expose their data and functionality through service interfaces.
- Teams must communicate with each other through these interfaces.
- There will be no other form of interprocess communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network.
- It doesn’t matter what technology they use. HTTP, Corba, Pubsub, custom protocols — doesn’t matter. Bezos doesn’t care.
- All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.
- Anyone who doesn’t do this will be fired.
- Thank you; have a nice day!
In 2003 : A perfectly wonderful idea
Andy Jassy tells of an executive retreat at Jeff Bezos’ house in 2003. It was there that the executive team conducted an exercise identifying the company’s core competencies — an exercise they expected to last 30 minutes, but ended up going on a fair bit longer. Of course, they knew they had skills to offer a broad selection of products, and they were good at fulfilling and shipping orders, but when they started to dig they realized they had these other skills they hadn’t considered.
In retrospect it seems fairly obvious, but at the time I don’t think we had ever really internalized that. – Andy Jassy, AWS CEO
As the team worked, Jassy recalled, they realized they had also become quite good at running infrastructure services like compute, storage and database (due to those previously articulated internal requirements). What’s more, they had become highly skilled at running reliable, scalable, cost-effective data centers out of need. As a low-margin business like Amazon, they had to be as lean and efficient as possible.
It was at that point, without even fully articulating it, that they started to formulate the idea of what AWS could be, and they began to wonder if they had an additional business providing infrastructure services to developers.
The operating system for the internet
They didn’t exactly have an “aha” moment, but they did begin to build on the initial nugget of an idea that began at the retreat — and in the Summer of 2003, they started to think of this set of services as an operating system of sorts for the internet. Remember, this is still three years before they launched AWS, so it was an idea that would take time to bake.
hat led to a new discussion about the components of this operating system, and how Amazon could help build them. As they explored further, by the Fall of 2003 they concluded that this was a green field where all the components required to run the internet OS had yet to be built.
2006: Amazon Web Services was officially launched.
In 2006, Amazon Web Services (AWS) began offering IT infrastructure services to businesses in the form of web services — now commonly known as cloud computing. One of the key benefits of cloud computing is the opportunity to replace up-front capital infrastructure expenses with low variable costs that scale with your business. With the Cloud, businesses no longer need to plan for and procure servers and other IT infrastructure weeks or months in advance. Instead, they can instantly spin up hundreds or thousands of servers in minutes and deliver results faster.
Today, Amazon Web Services provides a highly reliable, scalable, low-cost infrastructure platform in the cloud that powers hundreds of thousands of businesses in 190 countries around the world. With data center locations in the U.S., Europe, Brazil, Singapore, Japan, and Australia, customers across all industries are taking advantage of the following benefits:
As of 2006, over 150,000 developers were already on AWS.
AWS offered Simple Storage Service (S3) and Elastic Compute Cloud (EC2), with Simple Queue Service (SQS) following soon after. By 2009, S3 and EC2 were launched in Europe, the Elastic Block Store (EBS) was made public, and a powerful content delivery network (CDN), Amazon CloudFront, all became formal parts of AWS offering.
These developer-friendly services attracted cloud-ready customers and set the table for formalized partnerships with data-hungry enterprises such as Dropbox, Netflix, and Reddit, all before 2010.
2011: Five-Day AWS Outage
What happened actually? Amazon wrote a detailed report on the service disruption, eight days after it started. It all began at 12:47 AM PDT on April 21st when “a network change was performed as part of our normal AWS scaling activities in a single Availability Zone in the US East Region” with the intent “to upgrade the capacity of the primary network”. This procedure required that the network traffic to be shifted to another router in the primary network, but instead was diverged to a router belonging to a lower level traffic network by mistake. This router could not handle the traffic, so “many EBS nodes in the affected Availability Zone were completely isolated from other EBS nodes in its cluster”, “leaving the affected nodes completely isolated from one another.”
Amazon will provide a “10 day credit equal to 100% of their usage of EBS Volumes, EC2 Instances and RDS database instances that were running in the affected Availability Zone” to all customers affected. The report ends with apologies to AWS customers.
Growth Phase :
Market Share
Clearly, AWS has achieved some big milestones in recent years. But what other statistics should you know? Figures from Statistica show that AWS currently has a market share of 47.8% in the Infrastructure-as-a-Service sector, along with a share of 25.2% in the Platform-as-a-Service arena.
Contino’s 2020 research report The State of the Public Cloud in the Enterpriseshows that a whopping 64% of enterprises (who are in the cloud in some capacity) use AWS.
Revenue
Since launching in 2006, AWS has expanded exponentially, with Statistica stating that net sales were $25.5 billion in 2019; a significant growth compared to the $17.5 billion it made a year before.
74% of Amazon’s operating profit comes from Amazon Web Services (AWS).
AWS Users
According to Amazon, the number of active AWS users exceeds 1,000,000.
While small and mid-size companies make up the majority of that user base, recent polls by private consulting firms suggest that enterprise-scale users make up at least 10% of that total.
AWS Customers: The Ultimate List
Whether it’s technology giants, television networks, banks, food manufacturers or governments, many different organisations are using AWS to develop, deploy and host applications.
Here are the names that are on record publicly as using AWS:
Aon, Adobe, Airbnb, Alcatel-Lucent, AOL, Acquia, AdRoll, AEG, Alert Logic, Autodesk, Bitdefender, BMW, British Gas, Baidu, Bristol-Myers Squibb, Canon, Capital One, Channel 4, Chef, Citrix, Coinbase, Comcast, Coursera, Disney, Docker, Dow Jones, European Space Agency, ESPN, Expedia, Financial Times, FINRA, General Electric, GoSquared, Guardian News & Media, Harvard Medical School, Hearst Corporation, Hitachi, HTC, IMDb, International Centre for Radio Astronomy Research, International Civil Aviation Organization, ITV, iZettle, Johnson & Johnson, JustGiving, JWT, Kaplan, Kellogg’s, Lamborghini, Lonely Planet, Lyft, Made.com, McDonalds, NASA, NASDAQ OMX, National Rail Enquiries, National Trust, Netflix, News International, News UK, Nokia, Nordstrom, Novartis, Pfizer, Philips, Pinterest, Quantas, Reddit, Sage, Samsung, SAP, Schneider Electric, Scribd, Securitas Direct, Siemens, Slack, Sony, SoundCloud, Spotify, Square Enix, Tata Motors, The Weather Company, Twitch, Turner Broadcasting,Ticketmaster, Time Inc., Trainline, Ubisoft, UCAS, Unilever, US Department of State, USDA Food and Nutrition Service, UK Ministry of Justice, Vodafone Italy, WeTransfer, WIX, Xiaomi, Yelp, Zynga and Zillow.
The Big Spenders
Clearly, AWS is the cloud computing platform of choice for businesses across a range of industries. But who are the biggest, and how much money are they spending on these services?
According to Intricately, the top ten AWS users based on EC2 monthly spend are:
1 Netflix: $19 million
2 Twitch: $15 million
3 LinkedIn: $13 million
4 Facebook: $11 million
5 Turner Broadcasting: $10 million
6 BBC: $9 million
7 Baidu: $9 million
8 ESPN: $8 million
9 Adobe: $8 million
10 Twitter: $7 million
Based on these monthly figures from 2020, AWS collects $1.3 billion in sales a year just from these 10 customers, while raking in $62 billion of revenue overall. Moreover, this makes them the leader in the competitive cloud market.
Getting to 100 trillion objects
S3 continued to evolve in the years following its debut, and it also got a lot cheaper: By the time AWS got around to having its first major re:Invent developer conference in 2012, one of the major announcements from that week was a 24% to 28% percent reduction in S3 storage prices, the 24th such price cut the company had made up to that point.
Those price cuts were possible because AWS was able to upgrade the underlying S3 service on the fly, as Alyssa Henry, then vice president of AWS Storage Services, explained during a keynote address in 2012.
S3 was originally designed to hold 20 billion objects in storage, but it grew more quickly than anyone had anticipated, hitting 9 billion objects within the first year. The company upgraded the underlying storage service with more capacity in mind without any disruption to the original S3 customers, and By 2012 it had scaled to 1 trillion objects in storage, and by 2020, 100 trillion.
Netflix <> AWS Case Study
Netflix was originally a DVD shipping business where they would send out DVDs of your chosen programs to you. This was going well until 2008 where they experienced a major database loss and for 3 days could not ship out any DVDs to their customers. That was when the senior management at Netflix realized that they had to shift from continuous vertical scaling which leads to single points of failure to a more reliable and scalable horizontal scaling system. They chose Amazon Web Services despite having Amazon as a competitor (Amazon has their own streaming service known as Amazon Prime) because AWS provided them with the greatest scaling capabilities and the biggest set of available features. It took 7 years of migration for Netflix to shut down their last remaining data centres and move completely to the cloud.
Moving to the cloud has allowed Netflix to keep its existing members well engaged with overall viewing growing exponentially.
Netflix itself has continued to evolve rapidly by using many new features and relying on ever-growing volumes of data. Supporting this fast growth would not be possible earlier using their own in-house data centres. Netflix could not have racked the servers fast enough to support their own growth. While Cloud brings elasticity, which allows Netflix to add thousands of virtual servers and petabytes of storage within minutes which makes the whole process easier.
As of January 2016, Netflix has expanded into 130 new countries. It uses multiple AWS Cloud regions which are spread all over the world to create a better and more enjoyable streaming experience for Netflix members wherever they are.
Netflix relies on Cloud for all its scalability, computing and storage needs (not only video streaming) — Netflix business logic, distributed databases, big data processing, analytics, recommendations, transcoding and hundreds of other functions that are used by Netflix all go through their Cloud infrastructure. Netflix also has its own Content Delivery Network (CDN) known as Netflix Open Connect which is used to deliver videos globally in an efficient manner.
When Netflix was using their own data centres, they faced a lot of outages. Cloud Computing is not perfect either, even though Netflix has hit some rough patches in the cloud, a steady increase in the overall availability has been noticed. Failures are ultimately unavoidable in any large-scale distribution system, even a cloud one. However, a Cloud-based system allows you to create redundancy measures while become quite helpful. Cloud Computing has made it possible to survive failures without impacting the member experience.
Netflix did not shift to cloud for cost reduction reasons, but Netflix’s cloud costs ended up being a fraction of their cost which was a pleasant surprise. This was due to the elasticity factor of cloud computing, enabling Netflix to continuously optimize instances to grow and shrink as per requirement without the need to maintain large capacity machines. Economies of Scale helps Netflix in this scenario.
The benefits are very clear, but it still took seven years for Netflix to complete the migration. Moving to the cloud is a lot of work and a lot of factors need to be considered. Netflix could easily move all of its existing systems to AWS but bringing existing systems also brings all the problems and limitations that were present. So, Netflix took the cloud-native approach, they rebuilt all of their technology and fundamentally changed the way they operate the whole company. Netflix migrated from a single application to thousands of micro-services.
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