Want to rent server space from online retailing leader Amazon.com? You'll soon be able to, as the company has announced that it will offer virtual server computing power directly over the Internet. Amazon is not the first company to do this. Selling managed computing over the Internet has been a business model for some time, catering to small companies that don't yet want to invest in server farms or computing equipment, but that need to crunch data of all kinds.

Amazon, however, looks to be the first large-scale Internet-based retailer that will offer a service like this. Amazon's computing infrastructure is quite large and it makes sense for the company to try and pad its bottom line by selling off excess computing cycles to partners without affecting its core online retail business.

If you're an AMZN investor, be cheering this news. This is a rather unique way for Amazon to make more profits on an area where otherwise there would be lost opportunity costs.

With Amazon now hosting server storage and now computing applications directly over the Internet, is the world's largest online-only retailer transforming itself from a retailer into a managed-hosting company for all-things-Internet? It sure looks like it -- from search, to instant messaging, to compute cycles, to storage -- Amazon is in it all.

Now, if it can transform part of its business model into that arena, like it is already doing, then Amazon may be moving into more of IBM's territory. Never thought I would see the day.

Amazon.com: The next IBM? originally appeared on BloggingStocks on Fri, 25 Aug 2006 17:04:00 EST. Please see our terms for use of feeds.