On Friday, the e-tailer announced that it had begun testing a Web service called SimpleDB that allows any customer, anywhere, to rent database processing power rather than purchase software from Oracle (Nasdaq: ORCL ) , IBM (NYSE: IBM ) , or Sybase (NYSE: SY ) .
Talk about Rule Breaking.
But it's actually more than that. If enacted as planned, Simple DB would join existing Web services dubbed "Elastic Computing Cloud" and "Simple Storage Service," which, together, provide facilities for processing transactions and storing data. Mix in a database, and you've got everything a fledgling e-commerce operation could need.
You know what that means. Amazon -- like Salesforce.com (NYSE: CRM ) , SuccessFactors (Nasdaq: SFSF ) , RightNow Technologies (Nasdaq: RNOW ) , and soon-to-be-public NetSuite -- is expanding its SaaS offering. Only instead of renting out software for customer service or other business functions, Amazon is renting out infrastructure -- e-office space in an already vast and still growing digital world.
How much money will come of this? That's a tough question. But I wonder whether it's the wrong one to ask. We all know that Amazon is an e-tailer first. We also know it has logistics and revenue-sharing partnerships with other e-tailers. From the most recent 10-Q: "We expanded our fulfillment capacity during the nine months ended September 30, 2007, and throughout 2006 through gains in efficiencies as well as increases in leased warehouse space. This expansion is designed to accommodate greater selection and in-stock inventory levels and meet anticipated shipment volumes from sales of our own products as well as sales by third parties for which we provide the fulfillment." [Emphasis added.]
Shouldn't more e-tailers result in more revenue and, thereby, more profits? Seems so to me. And, apparently, to Amazon.
Welcome to the SaaS party.
A river runs through today's related Foolishness:
- Will Hulu have Amazon looking over its shoulder?
- Here are five things you can learn from Amazon today.
- Would you prefer that the e-tailer bill you later? No problem.