Amazon's S3 Finds Market in Storage

Posted on July 17, 2006

Amazon.com is finding customers for its Simple Storage Service, which is known simply as Amazon S3. The service is targeted a web businesses looking for a storage solution. Om Malik writes that S3 is finding customers and says SmugMug, a photo sharing service, has saved a lot of money using S3.

S3 is proving to be particularly attractive to community-based media companies - homegrown photos, video, even music. Altexa, Elephant Drive, Jungle Disk, MediaSilo, Ookles, Plum and SmugMug are some of the start-ups that are currently using Amazon's S3. Online photo sharing company SmugMug CEO Don MacAskill seems to be one happy customer, with a good reason!
He was facing a hefty tab for storage - Smug Mug is adding about ten terabytes worth of photos every month and claims he saved almost $500,000 in storage expenses. His monthly tab just in storage is around the $1500. An Apple 7TB XServe RAID costs about $13,000. Of course there are cheaper options, but still it is a lot of savings.
S3's early success makes you think that if the on-demand infrastructure can be delivered at an affordable price, the cost of setting up an online business is going to decline even further, perhaps prompting a whole cycle of new entrepreneurial activity. Amazon's Alexa platform plays into this trend quite well since it allows developers to process and analyze data on Amazon, store it (on S3), and serve it back out to the world. (Amazon, after all is the harbinger of Web 2.0 trends.)

Amazon.com S3's storage prices are $0.15 per GB-Month of storage used and $0.20 per GB of data transferred as of this writing. It sounds like Amazon.com may have found another way to generate revenues.

Update 7-18-06

Of course, it doesn't take long to get a new competitor on the Internet. SocalTech.com reports on a new competitor for Amazon A3 called Streamload.