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Lessons from the Front: How Amazon is using Web services

An insider's look at the Amazon Web services project to discover what the top executives in charge have learned from it.

The Web Services Advisor
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How Amazon is using Web services
Web services remain largely an inside-the-firewall phenomenon, used primarily for in-house corporate objectives such as application integration. A big exception to the trend is Amazon, which has initiated a public Web services program that lets Web site owners and developers include Amazon features and information on their sites, and make money while doing so. It's one of the first big public roll-outs of Web services, and so in a two-part column, we're going to take an insider's look at the Amazon project. In this first column, we examine the business drivers behind the effort, see how it was rolled out, and find out what the top executives in charge of the project have learned from it. In the next column we'll look at the nitty-gritty details of how you go about using Amazon's Web services.

Follow the money
Amazon's Web services effort has its roots in its popular associates program, in which Web sites get a cut of any sale that they send back to Amazon—as much as 15 percent of the transaction. Customers are routed back to the Amazon from associate sites using static links. Each associate uses an individual ID embedded in the links that tracks traffic and sales. The program has become one of the reasons behind Amazon's success: there are now 700,000 associates in the program, although not all of them are active.

But while the program was a success, associates wanted more from it. They were asking for "more flexibility and ways to merchandize products and put Amazon's features on their own Web sites," according to Colin Bryar, Director of the Associates and Web Services program. And there was no way to do that by using static links.

To solve the problem, Amazon turned to Web services, after first trying to offer those features using an ad server. Using a remote ad server couldn't deliver what associates needed, and so Web services was the natural next step.

"We give associates raw data through XML directly," Bryar says, "and they can take that data and use it any way they want." The features are available via either straight XML over HTTP, or else using SOAP. (We'll cover the details of how Amazon's Web services work in the next column. For more information about the program, go to www.amazon.com/webservices.)

Using XML and Web services, associates can now use a wide variety of features from Amazon's site, including dynamically generating content using Amazon's database, and so allowing for a wide variety of ways for searching and displaying data, and adding items directly to Amazon shopping carts. Product information is retrieved from Amazon servers via Web services, and can be formatted however associates would like on their own Web sites. Associates can use XML "heavy" or XML "lite" documents when creating their Web services. The "heavy" documents give access to everything displayed on Amazon's product page, including customer reviews, images of the item to be purchased and more, while the "lite" document gives only a stripped-down number of features.

From beta to final and beyond
Beta of the program rolled out in April, and Sarah Spillman, Senior Product Manager, says that only minor bugs were uncovered. Developers' main complaint was that the initial services weren't robust enough, for example, not being able to expose enough categories of products on their sites, and so when Amazon packaged up the final version for release in July, those extra features were added. Spillman and Bryar haven't yet assessed an ROI on the project, because it's only been available for a few months, and they say there is no way to properly gauge it by hard numbers yet. However, they believe that Amazon has already reaped benefits from the program. So far, developers have used Amazon Web services more as a testing ground than for building real-world applications, but money is already flowing in from associates using it, because the XML-based links are already bringing in revenue. More important, though, is that Amazon now has a proof of concept that the program works. And perhaps most important of all is that Amazon has created a community of developers that have coalesced around the service, and a cottage industry of sorts has been created—and so there is a chance that developer creativity will unleash even more unique services, add to a greater "buzz" around Amazon and its products, ultimately bolstering Amazon's bottom line.

Amazon's Web services are in their earliest days, and so far, only developers have made use of them—the vast majority of associates haven't used them because they don't have programming expertise. However, Spillman says that ultimately, the goal is to have all associates—including those with no programming skills—to be able to use Amazon Web services. Amazon has taken the first step towards allowing that with the use of an XSLT (Extensible Style Language Transformation) server. Associates with little technical expertise can use the server and style sheets to incorporate Amazon content on their site. The associate first passes the style sheet through the server, and the server then delivers back the code necessary for embedding the Web service onto the site. Amazon will build a library of style sheets that associates can use, so that ultimately associates will be able to mix and match them and develop sophisticated Web services without event knowing what XML or SOAP is.

Lessons from the front
So what has Amazon learned to date from its deployment experience? "You have to first figure out how Web services can be an extension of the value you provide to customers, and then use Web services to extend those benefits," Spillman says. "With us, it was easy to do, because it was a logical extension of the product development we've been doing for associates…We looked at the Google API (for Web services) but they're having a hard time monetizing it. With us, there's a clear monetary value, because associates want to merchandise and enhance their own site. So the affinity already exists" for developing Amazon-based Web services, and Amazon merely had to tap into it.

Bryar adds that "What helped is that we didn't have to create everything from scratch, we were able to tap into a lot of internal services that we already provide. So we didn't have to worry about developing new services and scaling them. The focus was on taking the best of Amazon and exposing it to outside Web sites."

Spillman sums up the problem faced by almost every company developing Web services: "Web services is a cool concept, but the true business guys aren't running it yet. The real question is, how do you take the cool technology and put a business value on it?" Amazon has taken a solid start in their attempt to do it. But only time will tell whether the company has been able accomplish it—and true gauge will be if it catches on in a big way with the non-developer associates, not only associates willing to be on the bleeding edge, and if increased revenue flows in as a result.

>> Part 2 of 2

About the Author

Preston Gralla, a well-known technology expert, is the author of more than 20 books, including "How the Internet Works," which has been translated into 14 languages and sold several hundred thousand copies worldwide. He is an expert on Web services and the author of a major research and white paper for the Software and Information Industry Association on the topic. Gralla was the founding managing editor of PC Week, a founding editor and then editor and editorial director of PC/Computing, and an executive editor for ZDNet and CNet. He has written about technology for more than 15 years for many major magazines and newspapers, including PC Magazine, Computerworld, CIO Magazine, eWeek and its forerunner PC Week, PC/Computing, the Los Angeles Times, USA Today, and the Dallas Morning News among others. As a well-known technology guru, he appears frequently on TV and radio shows and networks, including CNN, MSNBC, ABC World News Now, the CBS Early Show, PBS's All Things Considered and others. He has won a number of awards for his writing, including from the Computer Press Association for the Best Feature in a Computer Publication. He can be reached at preston@gralla.com.

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