Amazon Web Services is changing its business model

Until now Amazon Web Services (AWS) seemed to me to be a warehouse type of business. Their products were difficult to use on their own, but there were small shops which packed it up nicely and sold it on to the end user. However recently my idea of their business model is changing with the introduction of the AWS Management Console – web application to help one organize instances, keys, firewall etc.

Before AWS Management Console there was just a REST interface and console based programs were simply wrapping the web service into form-based executables. No one seriously treated it as a tool to manage a production environment with; its only use was as a testing tool. And there were companies like RightScale or Scalr which provided usable management applications on top of Amazon’s EC2 REST interface. They obviously add a small charge on top of Amazon EC2 fees so with the free management console from Amazon these guys will have to work hard to add value to their products and keep their customers.

But not only companies which build on top of EC2 ought to be worried. The management console is soon to be extended with UIs for other services from AWS – S3 (data storage), SimpleDB (scalable and schemaless DB engine), SQS (message queue service) and CloudFront (content delivery network).

It looks like Amazon is about to do with AWS what they made their first money on – sell directly to the customer and cut out the middle man.

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