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Think Big. Move Fast.

Amazon announced Thursday that its Elastic Block Store (EBS) feature is now available to all of its EC2 Web service customers. This is a big deal. The move rounds out Amazon’s offering and provides a full storage suite that is delivered as a service.

S3 and EC2 previously combined to be Amazon’s storage and compute services but lacked many of the critical elements needed to push enterprise class applications to the cloud. The previous holes didn’t matter much for non mission critical applications or batch jobs, but they were prohibitive for enterprise customers who need flexibility in the software stack and guaranteed service levels. With EBS, Amazon is sending a strong message and hosting providers should take notice – the Ecommerce giant is planning to be a significant player in the fight to offer cloud services to enterprise customers.

According to Amazon CTO, Werner Vogels, adding the Elastic Block Store offers customers “persistent, high-performance, high-availability block-level storage which you can attach to a running instance of EC2.” Vogels goes into further detail about the components of Amazon’s offering in his blog.

EBS volumes, which range from 1GB to 1TB, can be mounted as a file system or as raw storage. What this means is that customers can now deploy applications that work with any number of relational databases or file systems, not just the software stack specified by the cloud vendor (an example would be SimpleDB in Amazon’s case). This is critical to enterprise class customers because they are not going to lock themselves into a niche technology just to work with a certain service provider, while startups have been more willing to deal with this constraint because the cloud offered such a cost effective way to get an app up and running.

The EBS upgrade is a major move towards offering enterprise developers the flexible and reliable infrastructure they absolutely must have combined with the cheap and easy access to cloud resources they love. There are still plenty of questions about true reliability and performance that need to be answered before we see a massive migration, but this is a major step forward in providing the necessary building blocks.

Amazon was always going to be a tough competitor to beat on cost, but by adding flexibility and reliability to its story the implication for hosting providers is they will have to find another way to differentiate. My prediction is that we’ll see hosting providers attempting to move up the stack and looking to offer application management and monitoring solutions on top of their infrastructure as a way of separating themselves from Amazon. That’s good news for startups in that space like Singularity (a Lightspeed portfolio company), WeoCeo and Rightscale.