The Rise of Utility Computing?

Many years ago, companies like IBM and Sun promised us that the age of utility computing was here, and that we would soon be purchasing computing time in the same manner as we currently purchase electricity, gas, telephone and water. However, people laughed at the idea, and it faded into the backs of peoples' minds.

Codesta recently helped to create a brand new startup company called Jamloop (found at http://www.jamloop.com) which aggregates and geolocates new and used musical instruments. JamLoop came to Codesta and asked us to help make their idea reality. Based upon their requirements we decided to go with a JBoss-based web application with Spring and Hibernate underpinnings, which is (I believe) a pretty common choice and is not revolutionary. When deciding on how to bring this site to production however, we tried something different. We researched Amazon's EC2 (Elastic Compute Cloud), and we found it to be a good fit for both us and for our client. For 10 cents an hour ($2.40 a day) we could have a server available to us to do anything we wanted. We elected to go this route, and it has paid off handsomely for both us and the customer.

From our perspective, the key advantages that EC2 provide are:

• JamLoop didn't need to purchase expensive hosting space or hire any IT people, or take a risk with a cheap hosting site - Amazon is a big enough name that we felt we could trust them
• JamLoop can adapt to changing traffic patterns - if they suddenly get more popular or see a traffic spike, they can instantiate new EC2 instances on demand and still be paying just $0.10/hour/server
• If JamLoop has a normal traffic load which 20 servers can handle, and a peak that 100 servers can handle, they don't need to always have 100 servers - they can scale up and down when needed
• Since this site operates as an aggregator, it needs to import external data - JamLoop can spawn up some instances which do harvesting, keep them around for as long as needed, and shut them down when the task is complete.
• The cost is really low - $2.40 per day of server time works out to about $72/month per server, which seems like a good price especially given that there are no contracts and it's a pay-as-you-go model
• JamLoop can run any operating system or software that they want since these are their boxes - they aren't constrained to what a provider will set up for them e.g. Apache and PHP
• Using the EC2 API was really easy - they have an excellent tutorial and a well-built set of tools

One of my coworkers, Oliver Chan, will be posting about what we did with EC2 from a technical perspective very soon - however, the business ramifications I found too interesting to pass by. I think that we're entering the realm of utility computing which was described and dismissed in the past, and I think it makes the barrier to entry for new companies much lower. If I decide tomorrow that I have a great idea and I want to create a new website/company around it, I don't need to think about production problems - I can just use EC2, and pay less per month for a dedicated server than I pay for electricity at home. Amazon is my ops team, and my costs are predictable and clear.