to rent out data storage

With its business already firmly entrenched in the e-commerce marketplace, online retailer Inc. is now looking to leverage its massive and capacity-rich IT infrastructure by renting out storage capacity to independent and corporate software developers.

In an announcement Tuesday, the Seattle-based company’s Web Services division unveiled Amazon S3, which will sell excess storage capacity on Amazon’s IT systems to outside developers for US$0.15 a gigabyte per month for storage, plus $0.20 per gigabyte for data transfer.

The new Web-based offering expands on Amazon’s Web Services division, which was created in July 2002 to encourage software developers to create and offer custom applications to sellers. The sellers then pay to use the applications, including specialized inventory and tracking software, to customize their online stores in a bid to boost sales. Amazon Web Services now has more than 150,000 registered developers.

Adam Selipsky, vice president of product management and developer relations at Amazon Web Services, said the move will provide inexpensive, high-quality and secure storage to developers who need extra capacity for their work but don’t want to spend money on expensive infrastructure. “While there are probably a lot of companies that are satisfied with their own storage [systems], others will find this compelling to have this technology at low cost,” Selipsky said.

Secure S3 storage capacity is available to any developer, from college students to entrepreneurs to enterprise developers, with no start-up fees or monthly maintenance fees.

Dave Barth, product manager for Amazon S3, said that by offering excess capacity on its own networks, can make it easier for developers to create projects. “It becomes a big distraction for a lot of companies” to build, expand and maintain their own storage systems, he said. “A lot of companies are finding that handling it themselves isn’t working.”

Amazon S3 allows developers to write, read and delete objects up to 5GB in size, with each object stored and retrieved via a unique developer-assigned key. Objects can be made private or public, and rights can be assigned to specific users. The service uses standards-based Rpresentational State Transfer and Simple Object Access Protocol interfaces designed to work with any Internet-development tool kit, according to Amazon.

One early user of the S3 service is the Stardust@Home space science project at the University of California, Berkeley, which needed to store some 60 million photographs of interstellar space dust collected by NASA’s Stardust space probe. The millions of photographs now must be reviewed by volunteers looking for visible “tracks” of particles collected by the probe so the images can be further studied by scientists.

Bryan Mendez, an astronomer at UC-Berkeley, said Amazon S3 is being used because short-term storage would have been too expensive for the school to purchase just for the experiment. “It would be more than we need for this one-time shot,” Mendez said. The photographs will be ready for inspection by volunteers next month, he said.

Analysts said the S3 service is an interesting way for Amazon to bring in new revenue from the small and midsize business (SMB) market, but they’re unsure how it will be seen by enterprise IT.

“It’s an SMB ploy” that won’t likely be alluring to large enterprises, said Chris Foster, a storage analyst at Technology Business Research Inc. in Hampton, N.H. “Even if I’m an SMB, I don’t know if I want to start storing stuff outside [my own network], particularly customer data.”

Instead, there are plenty of established vendors who already offer such services, he said. “I’d rather go to someone whose core competency is managing or storing data,” Foster said. “As an SMB, I just don’t think it’s a good precedent to be storing your data with Amazon.

From the vendor point of view, I don’t think they’re any threat” to established storage vendors such as IBM, Hewlett-Packard Co. or Sun Microsystems Inc., he said.

Ronald Schmelzer, a Web services analyst at Waltham, Mass.-based ZapThink LLC, said that Amazon is trying to get users to look at the company as a technology platform, rather than just as an e-commerce site. “It’s a stretch of the business plan,” Schmelzer said. “The question is, Does Amazon see this as a growth opportunity?”

The company has leveraged its IT infrastructure before, he said, by providing online infrastructure for companies such Minneapolis-based retailer Target Corp.

“It’s really up to developers to see if this is going to hold, if this is going to provide traction, if this is going to work,” Schmelzer said.

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