In the beginning, Jeff Bezos created Amazon.com and took the company to a successful Initial Public Offering (IPO) by 1997. Everyone knows Amazon.com, of course, and it has become a force of nature, dominating the online retail and diversifying into several other fields. However, in the early 2000s, after the Dotcom bubble burst, the company's future was not quite as certain as now. Even so, one of the many things that Amazon was doing right even then was architecting its internal computer systems in a truly robust and scalable way.
Amazon had a lot of users and a lot of traffic, and in order to service that traffic, the company really had to think deeply about how to build scalable, cost-effective compute capacity. Now you could argue rightly that other companies had to think about the same issues too. Google also had a lot of users and a lot of traffic, and it had to think really carefully about how to handle it. Even so, most observers agree that a couple of important differences existed between the two giants. For one, Google's business was (and is) fundamentally a far more profitable one, which means that Google could always afford to overinvest in compute, secure in the knowledge that its money printing press in the ad business would cover the costs. For another, Google's primary technical challenges came in processing and making sense of vast quantities of data (it was basically indexing the entire internet for Google Search). Amazon's primary technical challenges lay around making sure that the inherently spiky traffic of their hundreds of millions of users was serviced just right. The spiky nature of consumer traffic remains a huge consideration for any online retail firm. Just consider Alibaba, which did $25 billion in sales on Singles Day (11/11) in 2017.
Somewhere along the line, Amazon realized that it had created something really cool: a set of APIs and services, a platform in fact that external customers would be willing to pay for, and that would help Amazon monetize excess server capacity it had lying about. Let's not underestimate the magnitude of that achievement; plenty of companies have overinvested in servers and have extra capacity lying around, but virtually none of them have built a platform that other external customers are willing and able to use and to pay top dollar for.
So, in 2006, Amazon launched Elastic Compute Cloud (EC2), basically, cloud Virtual Machine (VM) instances, and Simple Storage Service (S3), basically, elastic object storage, which to this day are the bedrock of the AWS cloud offerings. Along the way, the other big firms with the money and technical know how to offer such services jumped in as well. Microsoft launched Azure in 2010, and Google had actually gotten into the act even earlier, in 2008, with the launch of App Engine.
Notice how Amazon's first product offerings were basically Infrastructure as a service (IaaS), whereas Google's initial offering was a Platform as a service (PaaS). That is a significant fact and with the benefit of hindsight, a significant mistake on Google's part. If you are a large organization, circa 2010, and contemplating moving to the cloud, you are unlikely to bet the house on moving to an untested cloud-specific platform such as App Engine. The path of least resistance for big early adopters is definitely the IaaS route. The first-mover advantage and the smart early focus on IaaS helped Amazon open up a huge lead in the cloud market, one which they still hold on to.
In recent years, however, a host of other cloud providers have crowded into the cloud space, notably Microsoft and, to a lesser extent, Google. That partially has to do with the economics of the cloud business; Amazon first broke out the financials of AWS separately in April 2015 and stunned the world with its size and profitability. Microsoft missed a few important big trends in computing, but after Satya Nadella replaced Steve Ballmer at the helm, he really made the cloud a company-wide priority in a way that mobile, search, and hardware never were. The results are obvious, and if you are a Microsoft shareholder, very gratifying. Microsoft is probably the momentum player in the cloud market right now; many smart observers have realized that Azure is challenging AWS despite the still-significant differences between their market shares.
