My Own Pirate Radio

I’ve been thinking lately about how to scale up software services on the web in a cheap and incremental way. Every web startup faces this problem. In the bad old days (1993?) your only choice was to go buy a bunch of machines and build out your own server farm. The next wave was the ability to lease resources within a web hoster’s web farm, likely starting with shared machines and then stepping up to dedicated servers. The third wave is what I call “computing as a utility”. Microsoft, Google and Amazon are all working on this, and so far Amazon seems to have the most interesting capabilities: web services that let you outsource computing and storage in a very incremental way: Mechanical Turk (human task outsourcing), S3 (storage), Elastic Compute Cloud, aka EC2 (computing), and several others related to payment and commerce.

Computing utilities are a significant innovation. They provide a way to incrementally tap into computing power, network capability, storage, and all the expertise and staffing it takes to build out and manage a heavy duty server farm with worldwide reach.  From a financial standpoint you are shifting from big chunks of up-front capital expenses (and commensurate fund-raising) to smaller chunks of pay-as-you-go operational expense. From a staffing standpoint you are leasing expert help on operations, which is great, because you can then focus more of your staff and energy on building a great customer experience.

In theory, you can bootstrap a startup much more cheaply this way. It’s the moral equivalent of tapping into the electricity grid versus buying and wiring up your own generator or building a power source from scratch.

I’m really eager to see services like this mature, and curious to see how they get wired into developer tools and business models.

More reading:

(1) There are several slide shows now that tell the stories of various startup companies experiences with S3 and EC2. These are quick reads: http://www.slideshare.net/group/the-startup-project-aws and http://www.slideshare.net/group/webapps-scalability.

(2) In CNet last week Elinor Mills described her efforts to make money via Mechanical Turk. It sounds like it’s still hard to make significant cash there. 

(3) About a year ago I mused about the Mechanical Turk and things people can do better than computers.