Today, Amazon Web Services is a mainstay in the cloud infrastructure services market, a business juggling $60 billion. But in 2008, it was still new, working to keep its head above water and handle the growing demand for its cloud servers. Actually, 15 years ago last week, the company launched Amazon EC2 in beta. From that point on, AWS offered startups unlimited compute power, which was a primary selling point at the time.
EC2 was one of the first real attempts to mass-sell elastic computing – that is, server resources that will be as big as you need and go away when you don’t. As Jeff Bezos said in his 2008 opening sales presentation for startups, “You want to be prepared to be struck by lightning, […] Because if you don’t do this then a really big regret will arise. If lightning strikes, and you weren’t prepared for it, it’s hard to live with it. At the same time you don’t want to prepare your physical infrastructure, either in the event that there is no power outage. Therefore, [AWS] Helps in that difficult situation.”
Initial testing of that value proposition came when one of their startup customers, Animoto, grew from 25,000 to 250,000 users in a 4-day period in 2008, shortly after Southwest launched the company’s Facebook app in the South.
At the time, Animoto was an app aimed at consumers that allowed users to upload photos and convert them into videos with a backing music track. While that product may seem in vogue today, it was cutting edge in those days, and it used a fair amount of computing resources to create each video. It was not only an early representation of Web 2.0 user-generated content, but also the fusion of mobile computing with the cloud that we take for granted today.
For Animoto, which launched in 2006, choosing AWS was a risky proposition, but the company found it more than a gamble to try to run its own infrastructure due to the demanding dynamic nature of its service. To spin up your own servers would involve huge capital expenditure. Brad Jefferson, the company’s co-founder and CEO, explained that Animoto initially went that route before turning its attention to AWS as it was building up before attracting initial funding.
“We started out building our own servers, thinking that we would have to prove the concept with something. And as we started doing that it gained more traction from a proof-of-concept perspective and some people got the product. We took a step back, and it’s easy to prepare for failure as it were, but what do we need to prepare for success,” Jefferson told me.
Going with AWS may seem like an easy decision as we know it today, but in 2007 the company was really putting its fate in the hands of a mostly unproven concept.
“It’s quite interesting to see how far AWS has gone and EC2 has come, but then it was really a gamble. I mean we were talking to an e-commerce company [about running our infrastructure]. And they’re trying to convince us that they’re going to have these servers and it’s going to be completely dynamic and so that was great [risky]. Now, it seems obvious, but it was a risk for a company like us to bet on them,” Jefferson told me.
Animoto not only had to trust that AWS could do what it claimed, but it also had to spend six months searching for its software to run on Amazon’s cloud. But as Jefferson crunched the numbers, the choice made sense. At the time, Animoto’s business model was free for 30 seconds of video, $5 for longer clips, or $30 for a year. As he tried to model the level of resources his company would need to make his model work, it became really difficult, so he and his co-founders decided to bet on AWS and hope That it would work when usage increased.
That test came to Southwest the following year when the company launched a Facebook app, which spurred demand, in turn pushing the limits of AWS’s capabilities at the time. A few weeks after the startup launched its new app, interest exploded and Amazon had to scramble to find suitable resources to keep Animoto running.
Dave Brown, Amazon’s VP of EC2 today and an engineer on the team in 2008, said that “everybody [Animoto] Video will start, use and end a separate EC2 instance. For the last month they were experimenting with between 50 and 100 examples [per day]. Their usage peaked at around 400 on Tuesday, 900 on Wednesday, and then 3,400 by Friday morning. Animoto was able to keep up with the growth in demand, and AWS was able to provide the resources needed to do so. Its use eventually peaked at 5000 instances before it settled back, proving in the process that elastic computing could indeed work.
However at the time, Jefferson said that his company was not relying solely on marketing EC2. It also had regular phone calls with AWS executives to ensure that their service would not be terminated under this increasing demand. “And the biggest thing was, can you get us more serverswooE needs more servers. To their credit, I don’t know how they did it – if they took away the processing power from their website or others – but they were able to get us where we needed to be. And then we were able to get through that spike and then things naturally calmed down,” he said.
The story of keeping Animoto online became the main selling point for the company, and Amazon was actually the first company other than friends and family to invest in the startup. With its last funding in 2011, it raised a total of $30 million. Today, the company is more of a B2B operation, allowing marketing departments to create videos with ease.
While Jefferson did not discuss specifics related to cost, he pointed out that the expense of trying to maintain servers that would be idle most of the time was not a reasonable approach for his company. Cloud computing turned out to be a role model, and Jefferson says his company is still an AWS customer today.
While the goal of cloud computing has always been to provide as much computing as you need on demand, this particular set of circumstances has put that assumption to the test in a big way.
The idea of having trouble generating 3,400 examples today sounds bizarre, especially when you consider that Amazon now processes 60 million examples every day, but it was a huge challenge at the time and helped startups show that Elastic. The idea of computing was much more than theory.