Amazon's Web Services (AWS) are based on a simple concept: Amazon has built a globe-spanning hardware and software infrastructure that supports the company's Internet business, so why not modularize components of that infrastructure and rent them? It is akin to a large construction company in the business of building interstate highways hiring out its equipment and expertise for jobs such as putting in a side road, paving a supermarket parking lot, repairing a culvert, or just digging a backyard swimming pool.
More specifically, AWS makes various chunks of Amazon's business machinery accessible and usable via REST or SOAP-based Web service calls. Those chunks can be virtual computer systems with X2GHz processors and 2GB of RAM, storage systems capable of holding terabytes of data, databases, payment management systems, order tracking systems, virtual storefront systems, combinations of all the above, and more. And when I say "usable," I really mean "rentable." You pay only for the services (and their accompanying resources) that you use.
This is a key point. You can employ an army of virtual machines, store terabytes of data, or establish an Internet-wide message queue, and you will only pay Amazon for the resources you consume. So if your business needs a cluster of CPUs and several hundred gigabytes of storage to be available, say, every Wednesday for weekly processing, you don't have to keep a room full of servers sitting idly around six days a week. You can use AWS. Therefore, AWS is particularly attractive for business systems with intermittent or transient processing needs.
Nor are the costs unreasonable. For example, storage of 100GB for a month will cost you US$15 (at 15 cents per gigabyte per month), not counting 10 cents per gigabyte transferred in. (The Amazon Web Services site provides an online AWS Simple Monthly Calculator, for tallying your monthly costs of using any combination of offered services.)
As hinted above, the kinds of services range from hardware (albeit virtual) to processes. The services fall into three categories: infrastructure services, e-commerce services, and Web information services.
Investigating infrastructure services
The infrastructure services are composed of the Elastic Computing Cloud (EC2); Simple Storage Service (S3), a persistent storage system; the Simple Database (SimpleDB), which implements a remotely accessible database; and Amazon's Simple Queuing Service (SQS), a message queue service and the agent for binding distributed applications formed from the combination of EC2, S3, and SimpleDB.
These services provide virtually limitless compute, storage, and communication facilities. They're ideally suited for what might be called "intermittent" applications: those that require substantial compute or storage facilities on an irregular basis (for example, an application that wakes up Friday evening to process data gathered during the week). An application that requires worldwide connectivity -- say, a system that processes graphics files and makes the results available to clients across the Internet -- can also make good use of infrastructure services. Finally, these services act as excellent proof-of-concept laboratories for large-scale distributed applications. A development house seeking to demonstrate the feasibility of a proposed enterprise-wide application can implement a prototype using the infrastructure services, and avoid hardware costs that, if the prototype is deemed unworkable, would be a net loss.