Wednesday, April 25, 2012

Amazon's Cloud Software Rental Business advances Open Source Apps

Late last week, Amazon Web Services (AWS) announced that it was diving into the software rental business in the cloud. Through the AWS Marketplace store, users can rent software from IBM, SAP, Microsoft and many other providers, and payments are made in the cloud. While the New York Times and many other media outlets that covered the news emphasized the proprietary software that AWS Marketplace is renting from commercial providers, there are also many open source applications for rent on the site. Renting freely available open source software is the latest shrewd move from Amazon.

As the New York Times noted: "The presence of I.B.M. in Amazon’s service indicates that some companies are already hedging their bets [regarding their support for open source cloud platforms]." Indeed, the AWS Marketplace has buy-in from a number of proprietary software players who are already backing OpenStack, Eucalyptus and other open source cloud platforms. But Amazon has smartly made available many open source applications for rent, where users don't have to wrestle with installation and can jump right into usage.
For example, for a cent or two an hour, users can leverage a LAMP stack, Ruby on Rails is priced similarly, and about five cents an hour gets you Ubuntu 11.10. Some may scoff at this scheme involving renting software that users can get for free, but Amazon is clearly betting on there being a market for people who will happily pay very small fees to avoid installation hassles and jump right into applications.

In a number of instances, the applications on AWS Marketplace themselves are available at no charge, and customers will just end up paying small fees for cloud storage and resources. Amazon didn't become the 800-pound gorilla in the cloud by accident, and the company's new software rental business will probably be a hit.

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