Microsoft using Amazon for Storage

Amazon has hit a home run with their Simple Storage Service (Amazon S3). Amazon S3 enables companies and developers to store and retrieve any amounts of data from the web inexpensively. Amazon announced today that companies are storing 800 million data objects using S3, including Microsoft Corporation. The fact that a company with the resources Microsoft has at its disposal is using S3 for storage underscores the economic advantages S3 offers:

"We needed a storage and delivery solution that made it simple, fast, and dependable for students in hundreds of countries around the world to download our software at any time," said Joe Wilson, Director of Academic Initiatives in the Developer Marketing division at Microsoft Corp. Microsoft wanted to scale the program up without any upfront or increased ongoing expenses, which is why it chose Amazon S3. Microsoft expanded the program while managing to cut storage costs by more than 90 percent since switching to Amazon S3. "In addition to being easy for our users, Amazon S3 allows us to deploy and scale up in a very cost-efficient manner," said Wilson.

Amazon has invested over a billion dollars in their technlology platform, and is now leveraging the scalability of that platform to extend their business model beyond e-tailing. Although Amazon doesn't break-out the financials of their Web Services Group, over time these efforts should be a much needed boost to their slim operating margins.