Don MacAskill, founder and director of the web-based photo
service SmugMug , is preparing a presentation about
Amazon Simple Storage Service . This person, perhaps more than anyone else, knows all the advantages and disadvantages of the S3 distributed hosting platform, because he is one of the largest customers there. Amazon itself constantly
cites SmugMug as an example of the kind of Internet startups for which it has created an infrastructure platform.
Each user of SmugMug photo service gets unlimited disk space for storing photos, so the company pays for S3 services for a lump sum. Don Macaskill has published a number of texts on his blog, which tells in detail about the functionality of Amazon S3 and business benefits.
Amazon S3: The Holy GrailAmazon + two guys + $ 0 = next youtube')
Amazon S3: show me the moneyAmazon S3: downtime, braking and problemsThe online photo service SmugMug switched to S3 hosting in July 2006. By this time, the startup had already begun to make a profit, but it was still looking for ways to reduce costs. Disk storage has grown to 64 million photos, and the volume of user data has grown rapidly: you had to spend $ 40K a month to buy
Apple Xserve RAID disk arrays (they are now used everywhere, and eBay and Oracle use Xserve RAID) and servers (the most cheap). Using the S3 seemed to be the ideal option to save.
S3 distributed hosting involves storing data in different data centers from different companies. All this complex infrastructure is coordinated in the S3 system, and for the client it looks like a standard hosting, unless it is unusually cheap.

By the time of the transition to S3, SmugMug already had its own low-cost storage infrastructure on standard servers, but the S3 platform was still cheaper. Instead of paying for the purchase and rental of servers (plus the salary of technical staff, payment of Internet service provider and other expenses), they began to pay $ 0.15 / gigabyte per month. The savings are so great that BusinessWeek magazine in November 2006 wrote a great article about S3 and even put on the cover this “gift for Internet startups” (in the photo on the right).
Connecting to the S3 platform was surprisingly easy. Don Macaskill started writing the interface on Monday - and on Friday everything worked fine. He also connected the
SmugMug APIs to Amazon’s programmatic interfaces. Uploading data from Amazon servers was almost as fast as uploading from own servers, so the average visitor could not notice any difference.
Own traffic from their servers at the same time decreases tenfold, as can be seen in the diagram (this is a diagram from another startup, but the order of magnitudes is the same).

The founder of the startup SmugMug, however, bitterly admits that now his business may have new competitors. For example, a startup that offers users unlimited data hosting (photos, video, etc.) no longer needs large investments, it is not necessary to rent data centers and buy servers (even the Sun Fire X4500, the
best server for Web 2.0 , will not be needed) ). According to preliminary calculations, thanks to the transition to the S3 platform, SmugMug saves about $ 50K per month.
Calculations for the seven months from July to November 2006 showed that the company would spend $ 418K only on the purchase of new equipment, and another $ 5K on hosting. Instead, the company used the services of S3, paying only $ 84K for seven months, that is, the net saving was $ 339K. This is not counting the taxes that the company would pay if it itself bought the servers. Additional profits come from the sale of old servers and hard drives that are no longer needed (the amount of data on their servers has decreased by 20 times).
However, there are problems. The S3 infrastructure periodically crashes. From April 2006 to February 2007, this happened four times. The switch was disconnected twice, so the system was unavailable for 15–30 minutes (the main site Amazon.com also “fell”), once the S3 servers could not cope with the sharply increased SmugMug site traffic, and once again problems arose due to incorrect software settings on SmugMug servers.