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Web giants lure developers

As more software goes online, Web services providers race to get more applications on their hosted computing platforms.

A correction was made to this story. Read below for details.

While most people go to and see a slick e-commerce site, entrepreneur Dave Cotter sees a treasure trove of data--and a way to make money.

Cotter left enterprise software company BEA Systems two years ago to explore the idea of building a new company on the shoulders of programmable Web sites.

Along with Greg Harrison, he co-founded Mpire, which allows people to buy and sell goods online by tapping into the sales channels of sites such as,, Craigslist and others. It also analyzes data on buying patterns to uncover the optimal purchase price.

As more software applications go online, a race is on among Web service providers to lure software developers at companies like Mpire. An active "ecosystem," or network, of partners creating linked services improves a hosting company's health, as third-party products drive traffic--and revenue--to the hosting site.

"In the enterprise world, you had Microsoft's developer program competing with those from BEA, IBM or Oracle," said Cotter, who is chief marketing officer at Mpire. "What we are starting to see is the major Internet service providers, or platforms, going after hot start-ups to get them to develop things that highlight their platform."

Amazon Web Services, a subsidiary of the online retail giant, last week started a beta program for a service that lets developers tap into the processing power at Amazon's data centers.

Called Elastic Compute Cloud (EC2), it works with Amazon's Simple Storage Service (S3) and other services, such as messaging, search and e-commerce. Each is offered through application programming interfaces (APIs)--a set of instructions for accessing services programmatically.

The utility computing-like EC2 service places Amazon in competition with the likes of hardware vendors IBM, Hewlett-Packard and Sun Microsystems, which each offer pay-as-you-go hosted processing.

Amazon's expanding developer program--which now has 180,000 registered members--is also vying for programmers who have traditionally served on-premise software providers.

But rather than hooking programmers into a specific operating system or database, Amazon and other Web heavyweights make their computing infrastructure the "platform" to run third-party hosted applications.

Taking a cue from Microsoft, established Web companies like Google, Yahoo and eBay have developer programs that mimic successful Microsoft programs or open-source projects. Programmers can get documentation, free tools, code samples, and the like.

"Any platform that competes with developer attention is in some way competition. Developer mind-share is precious because there are only so many developers out there," said Greg Isaacs, head of the eBay Developers Program, who said the company continues to expose more of its core Web site to outsiders. "The beauty of it is that we've become an operating system for ecommerce."

eBay tries to lure developers monetarily by sharing revenue with online vendors that sell through their commerce sites. And then, of course, there's the "coolness factor" of getting to play with cutting-edge technology, said Isaacs.

Let a thousand flowers bloom
For newer, "Web 2.0" companies, providing APIs to allow third parties to "mash up" data from multiple sources is becoming commonplace.

Amazon, however, is offering more than just programmatic access to its product catalog. The e-commerce giant boasts one of the most battle-tested computing infrastructures on the Internet, which it is opening up to outsiders.

"A fundamental premise behind what we are trying to do at Amazon Web Services is provide external developers all the benefits of scale that Amazon enjoys as a large Web site and large consumer and producer of Web infrastructure," said Adam Selipsky, vice president of product management and developer relations at Amazon Web Services.

Rather than contract with a hosting company, buy hardware and hire staff, a customer could tap Amazon for computing power, storage and other general-purpose computing services.

Selipsky argued that outsiders can tap into the performance, reliability and security that the engineers of created over the years, which includes a total technology investment of more than $1.5 billion.


Correction: The beta program for developers recently started by Amazon Web Services was misidentified in the original version of this story. It is Elastic Compute Cloud.
Photo-sharing Web site, for example, has tapped into Amazon's storage service, which allowed the company to accommodate more visitor volume while maintaining a small staff of 15 employees.

Amazon Web Services chose to price its Elastic Compute Cloud service aggressively--starting at 10 cents an hour per every server instance--in an attempt to "level the playing field" and reach a large number of people, Selipsky said.

"If you have a great idea and willingness to work hard?the kid in a dorm room has as good a shot as a large corporation at making that idea a reality," he said.

Just like a large number of available applications makes an operating system more attractive, having a large "ecosystem" of hosted add-on services can attract customers, argue advocates.

It's well understood by anyone making a platform play that the way you win is to have people write applications that further embed you into the fabric of the Internet.
--Dave Cotter, chief marketing officer, Mpire has made its AppExchange development infrastructure integral to its business of offering hosted customer relationship management applications.

The philosophy is to "let a thousand flowers bloom" around, said CEO Marc Benioff at a recent event, where he announced the acquisition of a start-up that used AppExchange to build a tie between and Google AdWords.

"It's well understood by anyone making a platform play that the way you win is to have people write applications that further embed you into the fabric of the Internet," said Mpire's Cotter.

He added that Web services were at first largely used within corporations, but now services like are targeting consumers with Web services technology.

How Web services platforms stack up
Large Web services platform providers appear to have slightly different motivations in reaching out to developers.

eBay, for example, is offering outsiders fine-grained access to its content, such as catalog items, and deeper integration with its online shopping cart to speed up transactions that go through the main eBay site.

Amazon's Web services, by contrast, are not all explicitly tied to its retail e-commerce operation. The reason the company originally published APIs was to drive business to its e-commerce site through affiliates. But over time it began to view developers as distinct customers, said Selipsky.

For example, it brought out its Elastic Compute Cloud service in response to customer request, he added. Amazon Web Services operates as a profit-seeking subsidiary of

Yahoo and Google, meanwhile, operate primarily consumer-facing Web sites; opening up their Web tools to outsiders helps enhance their consumer-oriented services with add-on gadgets and drives traffic.

Microsoft, which has a powerful development tool franchise, is turning toward online service development, although with a different twist than strictly software-as-a-service providers.

The strategy, still under development, focuses on the combination of on-premise software augmented by Live online services, said chief software architect Ray Ozzie at Microsoft's TechEd conference in June.

Although they are each vying for developers, established Web services platform providers tend to build links between to each other's services because they can be used in combination, noted eBay's Isaacs.

Programmers themselves have more flexibility in terms of language and products. For on-premise software development, people typically make a choice, such as C, Microsoft's .Net, Java, or scripting languages.

"There's much more 'coopetition,' or fluidness, as a developer takes advantage of eBay as well as Amazon, Yahoo and Google. Before it used to be, 'I'm a Microsoft developer. Period,'" said Cotter. "Now I'm an Internet developer and can look at a different set of tools and protocols."

For Amazon, its technical development focuses on exposing more of its back-end, data center capabilities. Although better known for its e-commerce business, pushing further into utility computing is integral to engaging developers, said's Selipsky.

"My experience is, the way we gained the most attention and achieved explosive growth is when we released or updated really cool, innovative services," he said.