Cloud computing has just begun to take off in the business world. The biggest player in the cloud computing marketplace is one you might not expect: Amazon. Under its Web Services division (AWS), Amazon has streamlined cloud computing and made it an affordable and sensible option for companies ranging from tiny Internetstart-ups to established companies like FedEx.

AWS provides subscribing companies with flexible computing power and data storage, as well as data management, messaging, payment, and other services that can be used together or individually as the business requires. Anyone with an Internet connection and a little bit of money can harness the same computing systems that Amazon itself uses to run its now $48 billion a year retail business.

To make the process of harnessing the cloud simpler, Amazon added an automated service called Cloud Formation that helps customers get the right amount of computing resources. Customers provide the amount of server space, bandwidth, storage, and any other services they require, and AWS can automatically allocate those resources.

Since its launch in March 2006, AWS has continued to grow in popularity, with $1 billion in business in 2011 and hundreds of thousands of customers across the globe. In fact, Amazon believes that AWS will someday become more valuable than its vaunted retail operation. Amazon’s sales pitch is that you don’t pay a monthly or yearly fee to use their computing resources—instead, you pay for exactly what you use. For many businesses, this is an appealing proposition because it allows Amazon to handle all of the maintenance and upkeep of IT infrastructures, leaving businesses to spend more time on higher value work.......................

1. What business benefits do cloud computing services provide? What problems do they solve?
2. What are the disadvantages of cloud computing?
3. How do the concepts of capacity planning, scalability, and TCO apply to this case? Apply these concepts both to Amazon and to subscribers of its services.
4. What kinds of businesses are most likely to benefit from using cloud computing? Why?