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On Friday, a massive outage occured at Amazon Web Services that generated a wave of negativity and criticism in the blogosphere. Not long ago, Rackspace, one of the world's largest hosting companies, experienced a outage that resulted in a similar reaction. When the backbone collapses, so do our favorite services. This makes us mad. It makes us say things like: well, maybe we shouldn't be using the cloud. Or things like: why can't we get 99% uptime? Or: isn't this what an SLA is for?

"People don’t read anymore," said Steve Jobs last month. Try telling that to users of his company's iPhone and iPod Touch devices, many of whom seem to be using the device as an eBook reader. Our network blog last100 theorized that what Jobs' really meant was, who needs the Amazon Kindle when you've got an iPhone that does a lot more? "Will a developer write an app to read books on the iPhone or Touch?" asked last100's Daniel Langendorf. Actually, a few developers already have, and at least one is doing very well.

Web retailer Amazon announced their fourth quarter earnings today and included some interesting figures on the state of their distributed computing products. Namely, web services bandwidth now accounts for more bandwidth than all of Amazon's global web sites combined. To put this in perspective, comScore ranked Amazon the 7th most visited site in the US in December. The retail giant was 6th in the UK, 9th in Canada, 11th in Germany, 11th in Japan, and 20th in France. In other words -- Amazon is big, which means AWS-powered sites must be really big (collectively, at least).

Amazon is entering the second leg of their Amazon Breakthrough Novel Award, and they're calling on Amazon customers to help them decide which unpublished author scores the grand prize that includes a Penguin Publishing book deal and $25,000 advance. Starting with a pool of nearly 5,000 entries, Amazon this week announced their pool of semifinalist entries and are calling on readers to help whittle those down by reviewing excerpts from the novels.

Amazon Web Services, a fascinating division of the company offering a collection of commodity computing services, data storage and more - all sold in the cloud - is about to conclude their Start-up Challenge contest. The contest will award one start-up that uses Amazon Web Services a $50k cash prize, $50k worth of AWS credit and "an investment offer from Amazon." Seven startups remain and the voting (including your vote, if you'd like) ends Thursday December 6th.

Because video is generally the best medium for demonstrating anything, Amazon has made nice videos about all the finalists' companies. We've got all 7 videos embedded here below the fold. Since we were apparently unavailable to be poked in the eye with a sharp stick, the next best thing Amazon could do to us was offer embedded videos all stuck on autoplay. You'll have to pause them yourself and then watch them one at a time. (If I'm wrong, please tell me otherwise - I added autoplay=false to these silly iframe embeds - but we're still rolling!) The cognitive power to watch 7 videos concurrently is currently not available from AWS. That said, which of the following real-live startups do you think ought to win the prize?

Billboard magazine has done some fine sleuthing and turned up a number of developments in the works that may push the digital download world over the edge towards DRM-free MP3s. Walmart is reportedly pressuring the major record labels to allow it to sell their music online in MP3 format and now sources are telling Billboard that Amazon and Pepsi will team up to give away 1 billion MP3s for free in 2008, starting with a Superbowl kick off in February.

Amazon launched its DRM free MP3 music download service in September. We said it rocked then and I at least stand by that opinion today. Estimates at the time were that AmazonMP3 had about 2 million songs available - that number could increase substantially as labels feel the pressure of news like today's.

Unfortunately, of course there's a gimmick in the 1 billion song promotion - you'll have to buy 5 Pepsi products to get 5 codes for each MP3. According to a great summary of the news at PaidContent, a similar Pepsi promotion for iTunes that aimed to give away 100 million songs in 2004 only saw 5 million people participate. These are different days, though, and DRM + excessive soda consumption = free music is far less compelling than a straight path from soda to tunes, I suppose. If they were serious about it they could just as easily offer one song for one soda - but the economics wouldn't work out. Rumor has it that Amazon wants to pay the labels only 40 cents for each song they give away, as opposed to the current industry standard of 70 cents.

Whatever. The point is, by Superbowl time, thanks to online outlets like Amazon and Walmart, consumer expectation of a DRM-free experience in music may be a whole lot more mainstream than it is today.

I used to write a blog about ebooks - some of you may remember eBook Culture (alas I let the domain name slip and so it was gobbled up by a squatter). Anyway, as a lover of both books and the Web, the vision of an Internet-connected eBook Reader has been one of my obsessions over the years. And now it looks like Amazon has, finally, taken the always-nascent eBook industry to the next level. This week, wrote Steve Levy in a rapturous article in Newsweek, Amazon will release the Kindle - an e-reader that uses E Ink and will have Internet connectivity. The latter point is what will differentiate the Kindle from its chief competitor currently, the Sony eReader that was launched in 2006.

Kindle image via Engadget

Levy wrote in Newsweek that the Kindle " will change the way readers read, writers write and publishers publish." He unleashes other doozies of hyperbole too: "the iPod of reading" and "the first 'always-on' book".

The Kindle will cost USD399, which is $100 more than the Sony eReader. But the wireless Internet connectivity easily makes the increased price worth it. The wireless is via a system called Whispernet - which according to Newsweek is based on the EVDO broadband service offered by cell-phone carriers, allowing it to work anywhere and not just Wi-Fi hotspots. Here's Levy's description of what the device looks and feels like:

"It weighs but 10.3 ounces, and unlike a laptop computer it does not run hot or make intrusive beeps. A reading device must be sharp and durable, Bezos says, and with the use of E Ink, a breakthrough technology of several years ago that mimes the clarity of a printed book, the Kindle's six-inch screen posts readable pages. The battery has to last for a while, he adds, since there's nothing sadder than a book you can't read because of electile dysfunction. (The Kindle gets as many as 30 hours of reading on a charge, and recharges in two hours.)"

The Kindle will be able to hold 200 books, with new releases being offered for just $9.99. Also, apparently blogs will be part of the service - at a cost of either 99 cents or $1.99 a month per blog. Matthew Ingram was appalled that he'd have to pay. I'm awaiting details on this, because it sounds like premium content deals have been made with the likes of paidcontent.org. Either that or Amazon will try to make money from bundling feeds. It may be attractive to mainstream people who haven't gotten into RSS Readers yet, we'll have to wait and see. Like Matthew, I wouldn't pay unless there is a 'premium' offering (in which case I would certainly consider paying).

Update: Since the publication of this post, Amazon's PR people have contacted me a number of times to request that we remove this coverage based on a draft press release they sent us last week. I said I would not remove the post or all references to Open Social (their Plan B) but that I would post a clarifying statement if they wanted to send me one. The following is what they sent.

"Since the publication of this post, an Amazon spokesperson contacted me to clarify that no announcement was made in regards to support for Open Social. The Amazon spokesperson went on to say that Social network developers have been using the Amazon Associates Web Service to merchandise Amazon products (and earn Associates commissions) for some time. She indicated that Amazon would continue to provide developers with tools that allow them to choose the platform that makes the most sense for them regardless of the Social networking site they are building on. She pointed out that Social network developers continue to use Amazon’s infrastructure web services, Amazon S3 and Amazon EC2, to create and scale applications on popular Social networking sites."

And now, the original post in question...

Amazon is announcing tonight the addition of some of the hottest items in its catalog to its widely popular affiliate program, its support for OpenSocial and a new level of support for RSS.

Digital Assets Now For Sale

Specifically, the thousands of full-length movie downloads offered by the year-old Amazon Unbox and the millions of DRM-free MP3 songs in the new Amazon MP3 service will be purchasable through affiliate links anywhere on the web. There's a whole lot that you can buy and sell through affiliate links to Amazon, but until now digital assets like movies and DRM-free MP3s were not among them.

Unbox affiliate sales have been available for weeks and MP3s for a month. Affiliate program participants are receiving 20% commission on movies and up to 20% on MP3s during the initial introductory period.

Though there is already a thriving trade in physical goods using Amazon affiliate links, these digital assets are likely to be much hotter selling items.

We're hearing of more and more startups using Amazon S3 (Simple Storage Service) for their storage needs; and this stat will please both them and their users. Webmetrics reported today that Amazon S3 maintained more than 99.99 percent uptime for the month of October, exceeding the performance requirement of its recently introduced SLA. Webmetrics monitored the response times and availability for the REST- and SOAP-based APIs for Amazon S3 during October, using its GlobalWatch Monitoring platform. Performance results for each API were as follows:

S3 has more than five billion objects currently under management; including for 37Signals, webmail.us, YouOS, ElephantDrive, adaptiveblue, and more. Indeed just this week PollDaddy, the poll app we use at R/WW, reported they'd switched to S3. Polldaddy told us that "the system [S3] is very stable and all polls will now be served off Amazon S3 so there should never be any lag."

Starting October 1st, Amazon introduced a new SLA for S3 guaranteeing users 99.9 percent service uptime. If uptime is less than 99 percent, customers can apply for a service credit of 25 percent of their total S3 charges for the month. If the uptime is 99 percent but less than 99.9 percent, customers can apply for a service credit of 10 percent of their monthly charges.

Once again we're seeing the benefits of Amazon's HaaS (Hardware as a Service) strategy. As Emre Sokullu said in his article, Amazon is leveraging its deep scalability know-how and expertise. It's making web publishing even easier and cheaper - and reliable. This is a real game changer on the Web, especially in this new age of utility computing.

We all know the term 'Software as a Service (SaaS). The term SaaS was coined in a conference in 2005 and then popularized by Salesforce with its "No Software" motto. Today Google is one of the strongest backers of this approach, with such products as Gmail, Google Reader and Google Docs. And ever since Bill Gates' famous Internet services memo in November 2005, Microsoft has been promoting the concept too.

But today we can coin have a new, similar term: HaaS, for 'Hardware as a Service'. [Update: As several commenters have pointed out, in fact we didn't coin the term HaaS. It seems that Nick Carr was the first, in March 2006.] Hardware has always been available as a service through dedicated hosting providers, but it was never so well abstracted until Amazon introduced S3 and EC2. With dedicated hosting, you still had to deal with dirty hardware issues like scalability; but Amazon makes it a totally painless experience. In other words, the relationship between EC2-S3 and dedicated/virtual hosting is similar to the one between SaaS and ASP (Application Service Providers) - EC2-S3 is an evolved version of dedicated or virtual hosting services.