Amazon May Be Making $220 Million per Year with EC2

Cloud computing may not be a particularly well defined concept but for some, its end results are as clear as they get: cold hard cash. Infrastructure as a service (IaaS) may be a relatively new concept but for Amazon, it is already paying off quite well, raking in an estimated $220 million annually. The size of its operation also puts in a very rarefied club of a handful of companies with more than 50,000 servers.

Randy Bias of CloudScaling is citing several inside sources for his information and based on those sources and other data available, he has come up with some very interesting numbers about Amazon's EC2 IaaS operation. Bias estimates that the company has around 40,000 servers dedicated to EC2, with a fair degree of certainty. Amazon has another set of servers, its S3 cloud storage service and, of course, yet another set to run its main retail business, itself a rather large undertaking.

There are also some details on the hardware Amazon uses, running costs and utilization. Interestingly, Amazon doesn't oversubscribe cores, which in a way defeats the purpose of having a cloud infrastructure in the first place. The company apparently uses mostly 2U dual-socket servers for a total of 8 cores but also has some older hardware with only 4 cores per system and the utilization rate for EC2 is about 70 percent to 75 percent. Bias reckons that the hardware itself sets Amazon back around $2,000 to $2,500 and that the company uses a RAID 0 configuration with maybe 8 500 SATA drives per unit.

Finally, the analyst uses several sources of information and makes some educated guesses to arrive at the figure that would interest most businesses in the segment, how much Amazon is actually generating from running the cloud service. From the data gathered, he believes that the company is making around $18 million per month adding up to at least $220 million per year, though the figure may actually be greater than that.