There are many conflicting stories about the origin of AWS, but the whole "our infra is underutilized except during Christmas, let's rent it out!" is one that I never hear repeated by anyone with any claim to knowing what was actually happening. I think it's an "Omidyar Pez Dispenser"-tier story: fully bullshit.
It kind of doesn't even withstand a moment's scrutiny. What was Amazon going to do during Christmas? Like, if they lease all this spare capacity during non-peak, what happens to those customers during peak? There are spot instances now, but the first two AWS products, S3 and EC2, didn't come with some sort of, "Except during peak" contract. So Amazon needs exactly as much hardware to meet demand during Peak as it did before, and now it's got a bunch of customer workloads it also needs to serve during peak. I don't see how this would've solved any problems.
Most stories about the origin of AWS have a few things in common:
(1) There was limited support for the idea of AWS at senior executive levels
(2) The early AWS products were not used by for any significant Retail workloads within Amazon for quite a long time (as in, several years)
(3) As recently as a few years ago, there were major organizational pushes to move legacy Retail workloads onto AWS
(4) As recently as last year, there were still so many teams on Oracle that everyone with an Oracle dependency was required to have an OKR to get off it. I include this because IIRC this is public-- after Oracle was making hay with the "Amazon sells Dynamo/RDS but runs on Oracle" campaign, Amazon publicly released information about their Oracle Annihilation roadmap. So it supports the theory that it's taken Amazon quite a long time to shift certain Retail workloads to AWS, even in cases where an AWS product that's suited to the workload has existed for quite a long time.
I've never worked for Amazon, so I don't know, and it's impossible for all the stories I've heard from ex-Amazon people to all be true, but I think there's a pretty good argument against the "we should put this spare off-peak capacity to use" AWS origin myth.
I could totally imagine them being at capacity and buying more servers for Christmas in October then after Christmas renting the excess out all year (Jan thru dec). Then in October buy more server again, rinse repeat. Sell 2019s Christmas burst servers starting in 2020... How does that not pass the sniff test?
Obviously they wouldn’t pull the rug from folks and spot didn’t exist, but that doesn't mean it didn’t happen that way.
It kind of doesn't even withstand a moment's scrutiny. What was Amazon going to do during Christmas? Like, if they lease all this spare capacity during non-peak, what happens to those customers during peak? There are spot instances now, but the first two AWS products, S3 and EC2, didn't come with some sort of, "Except during peak" contract. So Amazon needs exactly as much hardware to meet demand during Peak as it did before, and now it's got a bunch of customer workloads it also needs to serve during peak. I don't see how this would've solved any problems.
Most stories about the origin of AWS have a few things in common: (1) There was limited support for the idea of AWS at senior executive levels (2) The early AWS products were not used by for any significant Retail workloads within Amazon for quite a long time (as in, several years) (3) As recently as a few years ago, there were major organizational pushes to move legacy Retail workloads onto AWS (4) As recently as last year, there were still so many teams on Oracle that everyone with an Oracle dependency was required to have an OKR to get off it. I include this because IIRC this is public-- after Oracle was making hay with the "Amazon sells Dynamo/RDS but runs on Oracle" campaign, Amazon publicly released information about their Oracle Annihilation roadmap. So it supports the theory that it's taken Amazon quite a long time to shift certain Retail workloads to AWS, even in cases where an AWS product that's suited to the workload has existed for quite a long time.
I've never worked for Amazon, so I don't know, and it's impossible for all the stories I've heard from ex-Amazon people to all be true, but I think there's a pretty good argument against the "we should put this spare off-peak capacity to use" AWS origin myth.