approaching 16 years of age and therefore we'd have a fair idea of its trajectory and prospects
Said no 16 year old, ever.
Heading into Christmas 2005, could you have imagined that 16 years later a new player would have rewritten the rules of how business tech is delivered? Could you have conceived of the notion that this new contender would already have swatted aside attempts by Cisco and HP to mimic its approach, trampled IBM, and forced …
I think Amazon would argue elasticity and being able to ramp up (or down) a service on a whim in response to unpredicted changes in demand. Considering the lead times for buying new equipment or (worse) renting more data centre space or (far worse) building data centre space, what Amazon, Microsoft and friends offer is compelling for many businesses.
Regarding the core business, one analysis of Amazon's success concluded that the sheer scale of their infrastructure supporting the bookstore (along with the reviews and recommendations) meant that they had already accumulated much of the experience and infrastructure for AWS)
In short, Amazon ca. 2003 was a massive technology company that happened to also sell books.
For the same reason its bad for ordinary businesses to lock up capital in property or furniture. Its not their core competency, and its difficult to be sure how much you will need, for how long, and where. If you're starting a company, do you buy a building, or rent it? The latter of course, because then if it gets too small you can move somewhere bigger, and if income falls you can cut your losses. Cloud brings that same flexibility to computing resources.
As for their core business: in 2005, Amazon essentially invested in a startup. If it had not paid off, they'd have sold or shut it down. Also bear in mind that Amazon the retail giant and AWS the cloud giant are not the same company. They're owned by the same group sure - but Yodel and the Daily Telegraph are have common owners.
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