Will Amazon Change How Enterprise Applications are Written and Hosted?

Amazon Elastic Compute Cloud (EC2)
Amazon Elastic Compute Cloud (Amazon EC2) is a web service that provides resizable compute capacity in the cloud. It is designed to make web-scale computing easier for developers. Features:
• Elastic - Add Servers in Minutes
  
• Completely Controlled - Root acces to each machine you deploy. Each instance predictably provides the equivalent of a system running Fedora Core with a 1.7Ghz Xeon CPU, 1.75GB of RAM, 160GB of local disk, and 250Mb/s of network bandwidth.
  

Pricing is based on the time/data that you use.

• $0.10 per instance-hour consumed (or part of an hour consumed).
• $0.20 per GB of data transferred outside of Amazon (i.e., Internet traffic).
• $0.15 per GB-Month of Amazon S3 storage used for your images (charged by Amazon S3).

Data transfer between EC2 servers or Amazon S3 is free.

Amazon Simple Storage Service (S3)
Amazon S3 provides a simple web services interface that can be used to store and retrieve any amount of data, at any time, from anywhere on the web. Features:

• Write, read, and delete objects containing from 1 byte to 5 gigabytes of data each. The number of objects you can store is unlimited
  
• Uses standards-based REST and SOAP interfaces
  
• Default download protocol is HTTP. A BitTorrent(TM) protocol interface is provided to lower costs for high-scale distribution.
  

Pricing is based on the data stored/transfered.

• $0.15 per GB-Month of storage used.
  
• $0.20 per GB of data transferred.
  

Amazon Simple Queue Serve (SQS)
Amazon SQS offers a reliable, highly scalable hosted queue for storing messages as they travel between computers. By using Amazon SQS, developers can simply move data between distributed application components performing different tasks, without losing messages or requiring each component to be always available. Amazon SQS works by exposing Amazon's web-scale messaging infrastructure as a web service. Any computer on the Internet can add or read messages without any installed software or special firewall configurations.

• Reliable - To prevent messages from being lost or becoming unavailable, all messages are stored redundantly across multiple servers and data centers.
  
• Simple - Developers can utilize Amazon SQS queues by using only four APIs: CreateQueue, SendMessage, ReceiveMessage, and DeleteMessage. The SOAP, REST and query APIs can be used with virtually any language and platform.
  
• Scalable - Amazon SQS was designed to enable an unlimited number of computers to read and write and unlimited number of messages at any time.
  
• Inexpensive - No up-front or fixed expenses. The only cost of sending messages through Amazon SQS is a small per-message handling fee based on the size of a message.
  

Again pricing is based only on usage.

• $0.10 per 1,000 messages sent ($0.0001 per message sent)
  
• $0.20 per GB of data transferred
  

Questions about privacy concerns and compliance with laws such as Sarbanes-Oxley have been raised about the services.  This has not stopped a number of tutorials from being created detailing getting an EC2 server instance up and running with applications written in languages such as Python and Ruby on Rails.

Given the variety of features and pricing numbers it can be hard to grasp what can be done using Amazon's services. A few quick calculations reveal:

• The cost of running 1 server via EC2 is appoximately $72/month.
  
• The cost of that server delivering 100GB of web pages is $20/month.
  
• The cost of that server receiving 100GB of image uploads is $20/month.
  
• The cost of transfering those images to S3 for long term storage is $0.
  
• The cost of storing those images in S3 is $15/month.
  

Vinny Carpenter writes -

...Can you imagine being able to provision 1, 2 or 500 additional servers in minutes for your application programmatically?...And so if Digg, Techmeme, Reddit or TechCrunch or the meme of your choice is sending you millions of hits, add a few virtual servers to support your application and then scale back as traffic dissipates.

John Lam writes:

...Capacity planning and operations management are things that are often ignored at startup companies. When all of a sudden traffic spikes and you're unable to scale until the new servers arrive next week you're screwed. But the ability to add additional capacity in minutes is an enormous leveling force. Also, the ability to scale up and down is just as important. You can greatly reduce your operational costs by not paying for the compute power until you need it.

An example of Amazon's services changing how applications are written is the Openfount Queued Server.  The Ajax/GWT client application is served via Amazon's S3.  S3 then serves as a queue providing communication between the client and one or many servers handling the processing of requests.