Yesterday Amazon announced Amazon SimpleDB, an on-demand database service similar to their EC2 and S3 services. With this final piece of the puzzle, Amazon has put an end to the need to own server infrastructure.
Now, don’t get me wrong, Dell, HP and IBM are hardly about to go out of business. But until now one of the biggest barriers to entry in some types of enterprise software was the capital cost of servers (which was already at a historic low). With this on-demand database service, any web-based product you can think of can be deployed without spending a cent on infrastructure. Regardless of what kind of software you sell, today your competitive differentiation just got a little bit smaller.