Who Are The Biggest Users of Amazon Web Services? It's Not Startups.

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Amazon loves to talk about its Web Services because it positions the company as a bold innovator bringing cloud computing to the unwashed masses and other companies still stuck in the land of legacy data centers. But it is coy when it comes to details about the actual business behind Amazon Web Services, which includes its S3 storage service, EC2 compute cloud, and SimpleDB online database.

During its fourth-quarter earnings call, Amazon offered up the tidbit that Amazon Web Services (AWS) now uses up more bandwidth than Amazon.com proper, but not much else. You could infer, however, that the business is not yet very large, accounting for less than $131 million of Amazon’s $5.7 billion in revenues that quarter. The revenues may be small, but they are no doubt growing very quickly.

So who are using these services? A high-ranking Amazon executive told me there are 60,000 different customers across the various Amazon Web Services, and most of them are not the startups that are normally associated with on-demand computing. Rather the biggest customers in both number and amount of computing resources consumed are divisions of banks, pharmaceuticals companies and other large corporations who try AWS once for a temporary project, and then get hooked.

That surprised me. These are the types of customers you wouldn’t expect to see running their data through a hosted service. But apparently the cost advantage of paying by the drink versus buying new hardware and staffing up to do a random data run is convincing them to trust more of their data with Amazon. It goes without saying that these are the types of companies who demand the highest security for their data. Banks and drug companies. And they have a lot of data to crunch.

You just hear more about the startups because many are increasingly putting their entire businesses on Amazon, and the economics of cloud computing really levels the playing field for them. They also tend to be more open about their data practices. But cloud computing is already going much deeper than the startup world, and gaining adherents in big IT organizations.

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