Red Monk analyst Anne Zelenka wrote an article about Amazon Web Services for Web Worker Daily. She tagged it under "Software" - because software is what it takes to build web apps. Yes, Amazon's pay-as-you-go storage and computing solutions are cool as far as hosting infrastructure goes, but Anne thinks much more is needed:
"Amazon hasn't yet come out with a user-friendly tool for making mashups - web applications that combine data and interactivity from various sources on the web... What we future web tycoons need is a platform that hosts mashups on Amazon's S3 and EC2, that brings together other features of AWS - like search capability and message-passing for distributed program control, and ideally ties in some Mechanical Turk like functionality for leveraging human intelligence online."
In other words, the perfect environment for an online business might not consist of truckloads of lumber (aka bandwidth and storage), with which they can construct whatever they wish (note: tools sold separately). Instead, what they need are Lego-like building blocks for assembling, dis-assembling and re-assembling into the next big thing. (Hey, isn't that what enterprise IT people call SOA? Well, here's an article on Amazon and SOA.)
You'll notice that from Anne's point of view, Amazon has already become the base case for improving upon. Where does this leave hardware-only hosting solutions?
Of course, there will always be customers who prefer to start at the lumber yard and build what they need from scratch. My neighbor Irakli, for instance, is a true do-it-yourself-er who's in the process of making speakers and amplifiers by hand. He detests vendors who try to sell him value added services. Verizon, for instance, is "straying away from its core competency" by calling itself "your broadband and entertainment provider". When I pointed out that land lines and even cell towers are facing increasing competition from VoIP and voice-over-WiFi, Irakli suggested that Verizon should just tighten its belt and compete by lowering prices. If it's cheap enough, it'll win!
It's a good thing Verizon's taking a different approach. Katie Fehrenbacher from GigaOM says IDC has crowned Verizon Wireless as the market leader in customer spending on the value-added data services that Irakli so abhors. But back to the web hosting market... Do you want to run a lumber yard, or sell Lego blocks?
See also: Web Hosting Core Competency, Part 1.
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