SmugMug CEO Don MacAskill describes how they use Amazon S3 in his newest blog post, Amazon S3 = The Holy Grail. In the post, Don reveals that SmugMug stores 500 million images which collectively occupy 300 terabytes of storage.
Don goes on to reveal how S3 allowed SmugMug to take their architecture to the next level of safety, security, economy, and speed. This sentence in particular caught my eye:
Perhaps even more importantly, our cash-flow situation is vastly improved. Instead of paying $25,000 for a handful of terabytes of redundant storage up-front, even before they’re used, we now pay $0.15/GB/month as we use it.
An entire business school case study should be written around that one sentence!
By providing infrastructure components on an as-needed, pay as you go basic, I believe that we are changing the economics of building large-scale web applications. Don notes that S3 is a playing-field leveler, lowering barriers to entry. Indeed, the chasm between concept and reality is now significantly narrower. Ventures that once required angel funding to get off the ground can now be built from the comfort of a dorm room or a kitchen table. As long as you have a business model that provides you with a return as soon as you have primed the pump, you can get started without making those up-front $25K investments on a regular basis.