Friday, November 03, 2006

Believe it or not: it's even more important than YouTube

  hile the blogosphere has spent the last few weeks frothing at the keyboard about YouTube, BusinessWeek magazine has put out a thoughtful piece on Amazon's "WebOS" strategy. Check it out, and check out Read/Write Web's analysis.

For a month or so now, the web community has been holding up YouTube as the pinnacle of Web 2.0 successes; I may agree, but only in the everything-is-overvalued-during-a-bubble sense of Web 2.0. YouTube is not groundbreaking technology. It's not groundbreaking social networking. They did a great job of combining the two, however, and got immensely popular extremely quickly. However, like every other social networking site, they will lose that popularity soon enough. YouTube won't be cool forever. And their technology won't make them the defacto medium for video distribution--it's too easy to imitate.

Meanwhile, and with about 1/100th of the fanfare, Amazon has been putting forth some absolutely groundbreaking products: Simple Queuing Service, Simple Storage Service (S3), and Elastic Compute Cloud (EC2). While the names are completely unimaginative, the products themselves define an entirely new platform for developing online software (I'll refrain from calling it Web 2.0).

By utilizing Amazon's platform, small companies gain tremendous advantages: they use a development platform specifically designed for online delivery, they get access to a scalable and robust hardware infrastructure, and (perhaps most important for startups) they get pay-as-you-go, only-pay-for-what-you-use access to that infrastructure.

And the innovation doesn't end there: Amazon is revolutionizing this industry by leveraging their own infrastructure in a way that enhances their business model. Over the last decade, Jeff Bezos and company have built one of earth's largest sets of datacenters to support earth's largest online retailer: now they are renting out time on that infrastructure. It's gone from being a cost center to a revenue generator. Their expertise in hosting, which was previously dedicated to keeping their uptime numbers up, is now helping to sell product (computer time, storage space, etc) directly.

And, of course, they've invented what is in effect a WebOS and development platform.

Sun is dabbling in this market too, but in a much less revolutionary way. Microsoft and Google have both built ginormous data centers, but neither has made such revolutionary steps toward selling time on them. And neither, as a matter of fact, has gone as far in creating a platform for other companies to use in creating their Web 2.0 software.

So the blogosphere can keep writing about YouTube, right up until YouTube ceases to matter because no one goes there anymore. In the meantime, Amazon is quietly changing the way we'll do business in Web 3.0.