Diving deep into Amazon Web Services

From storage to payment, Amazon is dangling an array of low-cost services – but will customers bite?

Entering E-Commerce Service

Amazon's E-Commerce Service provides facilities that turn you (or, rather, your Web site) into a reseller for Amazon's merchandise. Others will turn Amazon into a reseller for your merchandise. Still others let you employ the same payment authentication and collection system that Amazon uses. In short, the Amazon E-Commerce Service enables an organization to tap into the e-business facilities that Amazon uses 24/7 to operate its own affairs.

Amazon Flexible Payment Service (FPS): Amazon's FPS lets users tap into the company's existing payments collection infrastructure (for a fee, of course). The idea of FPS is particularly attractive when you read that it will "take on the complexity of managing security and fraud protection" so that you don't have to.

Two aspects of FPS are especially interesting. First, it supports micropayments, those that involve cents -- or even fractional cents. This is useful when business activities involve piles and piles of transactions, each having little monetary value, but the sum of which has measurable value. Imagine selling bubblegum for 10 cents. That doesn't seem like much -- unless you're selling, say, 100,000 pieces a month. Amazon FPS lets you aggregate micropayments into a single transaction, thus eliminating the problem of transaction costs swamping whatever profits the transactions involve.

FPS's other interesting aspect is its support for "middleman" operations. That is, you can facilitate a transaction in which you participate neither as a sender (buyer) or recipient (seller). You can, however, take a cut of the action.

There are two ways to employ FPS in your Web application: using an Amazon-supplied "widget" (of which there are two), or hard-coding an interface. The two available widgets are Pay Now and Marketplace (both designed to be easily added to a Web site's UI).

Amazon has automated the creation of Pay Now widgets. Connect to the online Pay Now Widgets Implementation Guide, and it walks you through the process of building a widget by prompting for various parameters (for example, the destination URL after the payment has been placed), then generates the HTML that you cut and paste into your Web site's code. The Marketplace widget lets you act as a third party between buyer and seller. In essence, it turns you into an instant reseller. You can use a MarketPlace Widget to let sellers do business on your Web site and pay you for the privilege.

The hard-coded approach is more difficult, but more flexible, as it enables any application that can communicate with a Web service to tap into FPS. You have to express the parameters and processes for payment transactions in a specialized mini-language called Gatekeeper. Once you've done that, you install those instructions into the Amazon FPS, which returns a token that is essentially a handle to the Gatekeeper code. Future transactions that employ that token are shepherded by your Gatekeeper program. Details for this process can be found in the online Amazon FPS Technical Documentation.

Amazon DevPay: Suppose you've written an amazing application that runs in Amazon EC2. You're convinced that people would be willing to pay you to use your application. Enter the Amazon DevPay Service.

Amazon DevPay is built on the same payment management infrastructure as Amazon FPS. But DevPay -- as its name attests -- is designed specifically to let developers charge for the use of their EC2- or S3-based applications.

Interaction with DevPay takes place via tokens (unique identifiers). One token identifies your application; the other identifies a specific user allowed to employ your application. The first, the product token, is generated by Amazon when you register your product with DevPay. That token, combined with a user's activation key (created when the user signs up with AWS), is implemented during product installation to generate credentials that include the second token, the user token. Your product embeds these tokens in service calls it makes to AWS, and in that way, DevPay tracks your application's usage by a given customer.

When you register your application with DevPay, you establish how your application is priced. Users can be billed on a metered (pay for what they use) basis, they can be charged monthly, or they can pay a one-time up-front fee. Of course, you have to be careful how you structure your billing. While your clients pay you for the use of your application, you must pay Amazon for the use of its services. So, at the very least, you have to make sure that your customers pay you more than you pay Amazon. Unfortunately, Amazon does not provide a sandbox for testing your application's integration with DevPay, so you have to do your testing with real money. Fortunately, the cost of Amazon services is low enough that this is not a substantial problem.

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