4 ways Amazon's cloud business has transformed the tech world in just ten years

Jeff BezosReuters

Amazon's cloud computing powerhouse, Amazon Web Services, turned 10 years old today. When it launched back in 2006, no one thought it would change the computer industry, and our lives, the way it has.

Here's a look at what things were like when AWS arrived in 2006 and how far they've come today.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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1. It started small. In 2006, Amazon launched two fairly simple services: computers you could rent by the hour, and computer storage you could rent by the hour. This became "cloud computing."

1. It started small. In 2006, Amazon launched two fairly simple services: computers you could rent by the hour, and computer storage you could rent by the hour. This became "cloud computing."

Source: Gartner Worldwide IT Spending

Today, Amazon Web Services is a lot more than just computers and storage for rent. You can still rent those, but you can also rent more than 70 more Amazon services including networking, database, analytics, software, and mobile.

Today, Amazon Web Services is a lot more than just computers and storage for rent. You can still rent those, but you can also rent more than 70 more Amazon services including networking, database, analytics, software, and mobile.

Source: Amazon

Amazon's storage service, S3, holds trillions of objects and serves up millions of requests per second. Plus AWS customers use 143 million hours a month of services from 2,500 third-party software services.

Amazon's storage service, S3, holds trillions of objects and serves up millions of requests per second. Plus AWS customers use 143 million hours a month of services from 2,500 third-party software services.

Source: Amazon

Overall, AWS is as big as its next four competitors combined and has data centers located in 12 geographic regions worldwide, with 5 more scheduled to open later this year.

Overall, AWS is as big as its next four competitors combined and has data centers located in 12 geographic regions worldwide, with 5 more scheduled to open later this year.

Source: Synergy Research Group

2. In 2006, no one used the term "cloud computing." They called it "grid computing" or "utility computing" or "outsourcing." A year BEFORE Amazon launched AWS, Sun Microsystems launched its grid computing for $1/CPU hour or GB of storage and it was considered a radical idea and dirt cheap. But it didn't save the company.

2. In 2006, no one used the term "cloud computing." They called it "grid computing" or "utility computing" or "outsourcing." A year BEFORE Amazon launched AWS, Sun Microsystems launched its grid computing for $1/CPU hour or GB of storage and it was considered a radical idea and dirt cheap. But it didn't save the company.

Now, everybody in tech knows what cloud computing is, and AWS is the undisputed leader. It's on track to be a $10 billion business for Amazon. Q4 2015 revenue for the AWS segment grew 70% to $2.4 billion (with a 29% operating margin), Amazon says.

Now, everybody in tech knows what cloud computing is, and AWS is the undisputed leader. It's on track to be a $10 billion business for Amazon. Q4 2015 revenue for the AWS segment grew 70% to $2.4 billion (with a 29% operating margin), Amazon says.

Source: Amazon (email)

In fact, cloud computing, as led by AWS, has had an enormous ripple affect. It has squeezed giant legacy IT players like IBM, HP and EMC and spurred the mobile computing revolution. Next it will support the Internet of Things and machine learning, where everyday objects become "smart" and computer themselves learn to think.

In fact, cloud computing, as led by AWS, has had an enormous ripple affect. It has squeezed giant legacy IT players like IBM, HP and EMC and spurred the mobile computing revolution. Next it will support the Internet of Things and machine learning, where everyday objects become "smart" and computer themselves learn to think.

3. In 2006, cloud computing wasn't anything that most companies wanted to use for their important apps and files. It was slow, crashed all the time and no one was sure it could stop hackers. Even in 2009, when Netflix started using AWS, Netflix considered it "was a very crappy data center," says Netflix's AWS architect at the time, Adrian Cockcroft.

3. In 2006, cloud computing wasn't anything that most companies wanted to use for their important apps and files. It was slow, crashed all the time and no one was sure it could stop hackers. Even in 2009, when Netflix started using AWS, Netflix considered it "was a very crappy data center," says Netflix's AWS architect at the time, Adrian Cockcroft.

Source: Netflix, Juniper, and Intuit explain how Amazon is eating the $3.5 trillion IT industry

At first, even Amazon didn't use AWS for its massive website and retail needs. It didn't put all of its websites and retail on AWS until around 2010.

At first, even Amazon didn't use AWS for its massive website and retail needs. It didn't put all of its websites and retail on AWS until around 2010.

Source: AWS Slideshare

Today, AWS has more than a 1 million active customers in 190 countries, including nearly 2,000 government agencies, 5,000 schools and over 17,500 nonprofits.

Today, AWS has more than a 1 million active customers in 190 countries, including nearly 2,000 government agencies, 5,000 schools and over 17,500 nonprofits.

Source: Amazon

About two dozen large enterprises have decided to shut down their data centers and use AWS exclusively including Intuit, Juniper, AOL, and Netflix.

About two dozen large enterprises have decided to shut down their data centers and use AWS exclusively including Intuit, Juniper, AOL, and Netflix.

Source: Amazon

4. In 2006, Oracle billionaire and then-CEO Larry Ellison famously pooh-poohed cloud computing as nothing more than a fashionable buzzword.

4. In 2006, Oracle billionaire and then-CEO Larry Ellison famously pooh-poohed cloud computing as nothing more than a fashionable buzzword.

Source: Larry Ellison - What The Hell Is Cloud Computing?

Today, AWS offers several databases built by Amazon that compete with Oracle. One of them, Amazon RDS, has more than 100,000 active customers. A new one launched earlier this year, Aurora, is the fastest growing service in AWS history, Amazon says.

Today, AWS offers several databases built by Amazon that compete with Oracle. One of them, Amazon RDS, has more than 100,000 active customers. A new one launched earlier this year, Aurora, is the fastest growing service in AWS history, Amazon says.

Source: Amazon.

All told today, all of AWS database services are on track to be a billion-dollar business for Amazon, not including Amazon's own use of these services for its retail operations. These database services includes Amazon RDS, Amazon DynamoDB, Amazon Redshift, and Amazon ElastiCache.

All told today, all of AWS database services are on track to be a billion-dollar business for Amazon, not including Amazon's own use of these services for its retail operations. These database services includes Amazon RDS, Amazon DynamoDB, Amazon Redshift, and Amazon ElastiCache.

Source: Amazon

By 2014, Larry Ellison had proclaimed Amazon to be one of Oracle's biggest competitors. And Oracle is currently playing catch-up, trying to launch its own cloud as fast as it can.

By 2014, Larry Ellison had proclaimed Amazon to be one of Oracle's biggest competitors. And Oracle is currently playing catch-up, trying to launch its own cloud as fast as it can.

Source: Larry Ellison: Amazon, Salesforce.com Are Now Oracle's Biggest Competitors

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