Can Amazon’s Cloud Computing Make Rain?

Amazon can only hope its latest Web services product will bring a return on
the investment that lowered its second-quarter profits.

The company released Amazon Elastic Compute Cloud (EC2) into beta, giving developers scalable computing capacity in
the cloud, according to a statement.

The idea is to make Web-scale developing easier and cheaper for
developers, an Amazon spokesperson told

The spokesperson said that Amazon has made a significant investment
in technology to run its own Web-scale business and serve millions of

Opening that technology up for other developers is just
another way to make returns on that investment, the spokesperson added.

EC2 presents a true virtual computing environment, the company said, allowing
developers to use Web service interfaces to requisition machines for use,
load them with custom application environments, manage a network’s access permissions, and run images using as many or few
systems as necessary.

To use EC2, Amazon said developers will create an Amazon Machine
Image (AMI) containing applications, libraries, data, and
configuration settings. Then they should upload the AMI into Amazon S3.

After that, developers pay for the hours and bandwidth they use,
$0.10 per instance-hour consumed, $0.20 per GB of Internet
traffic, and Amazon S3 charges of $0.15 per GB per month.

Earlier this year, Amazon introduced a product, called Amazon S3, or
Amazon simple Storage Service, that made similar use of its “cloud.”

In July Amazon reported a profit of $22 million (5 cents per diluted share) for the second quarter. That was down from the year before by 58 percent.

But at the time, Amazon said profits were low due mainly to new hires
for its Web services division and also technology investments.

That brought the company’s cash count to $375 million, down 23
percent. Now it’s time to find out if 10 cents an hour can get any
of that cash back any time soon.

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