How the World Got Wired · The Cloud

What It Changed

I want to tell you what AWS did to the rest of the technology industry, because the effect is hard to overstate.

Before AWS, if you wanted to start a technology company, the first thing you had to do — before you wrote a single line of useful software, before you had a single customer — was to buy or rent a lot of expensive equipment. You had to buy servers. You had to buy network gear. You had to buy storage devices. You had to find a place to put all of it, set it up, keep it cool, hire people to babysit it. The cost of getting started was in the hundreds of thousands of dollars, sometimes the millions. You had to convince investors to give you that money before anyone had any idea whether your company was a good idea.

After AWS, the cost of getting started fell, roughly, by a factor of a thousand.

A teenager in his bedroom could, in 2007 or 2008, open a free Amazon account, type in a credit card number, and have, within twenty minutes, a fully functional server running his code, accessible from anywhere in the world. If the project did well, he could rent more computers, instantly. If it did badly, he could shut everything down, and pay only for what he had used, which might be ten dollars.

A whole generation of small startups became possible that had not been possible before. Many of the companies you know — Airbnb, Uber, Lyft, Pinterest, Instagram, Snapchat, Slack, Stripe, Dropbox, and hundreds of others — were built, in their early years, almost entirely on AWS. They could not have existed in their actual form without it. The economics didn’t work without renting their infrastructure.

This is the third great gift of the modern internet, after Cerf and Kahn’s protocols and Berners-Lee’s web. The cost of starting a technology company collapsed almost to zero, because Amazon was willing to rent you whatever you needed. Whether this was a gift in quite the same way as the open protocols, or whether it was a clever business move that captured most of the value of an industry, is the kind of question you can argue about at dinner with your future friends. The truth is, as usual, a bit of both.

All 24 chapters of How the World Got Wired · Library · All courses