Amazon Learns New Business Tricks

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Cloud computing is getting more powerful every day. The latest baby step on the road to liberation from expensive hardware comes from Amazon (Nasdaq: AMZN  ) and Oracle (Nasdaq: ORCL  ) : Your enterprise-class business is now free to install Oracle database licenses in Amazon's Elastic Computing Cloud (EC2).

If that doesn't sound like a big deal, you need to crawl out from that large pet rock you live under. Onward!

Oracle is the database vendor of choice for most large businesses (and many smaller ones), with a claim to 49% of the entire database market. And Amazon Web Services is the first cloud computing platform to support it. This means that applications built around the advanced, full-featured, high-performance Oracle database products can now think seriously about moving onto Amazon's cloud.

Oracle provides pre-built EC2/Oracle server images, and the service supports database backups onto its S3 storage service. Existing Oracle customers are free to move their software licenses -- for databases, middleware, programming tools, and more -- to the EC2 environment at no extra cost, easing the transition process.

The virtual machine images are built on Oracle Enterprise Linux, sidestepping rival operating system vendors like Red Hat (NYSE: RHT  ) and Sun Microsystems (Nasdaq: JAVA  ) . And no, you can't run Microsoft (Nasdaq: MSFT  ) Windows directly on the EC2 cloud -- you need a virtualization layer like VMware (NYSE: VMW  ) Server or Sun's VirtualBox in between the cloud image and Windows. But that somewhat convoluted solution works just fine.

So there's still room for improvement, like easy-to-use Windows server images or official support for more business-oriented software packages. I don't see any technical reason why these features shouldn't be possible -- EC2 runs on the Citrix Systems (Nasdaq: CTXS  ) Xen virtual server platform, which already knows how to do Windows, for example, and Amazon must have engineers and salespeople behind the scenes talking to every major software vendor as we speak.

Cloud computing is the future for small and medium businesses, and there are temptations for the big boys as well. Amazon is smart to grab an early lead in this emerging space, and the computing services segment will soon give serious revenue support to the e-retail core business.

Further Foolishness:

Microsoft is a Motley Fool Inside Value selection. VMware is a Motley Fool Rule Breakers pick. is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund holds no position in any of the companies discussed here, but he is a registered EC2 developer. You can check out Anders' holdings if you like, and Foolish disclosure loves big Swedish geeks.

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