Amazon Web Services is widely used by websites to host their back-end processing, databases, and for file storage. Prices are quite low plus it saves the websites from having to do complicated hosting. This is called cloud computing, everything lives on the Net and can be accessed from anywhere.
Google just jumped into this big time with their announcement yesterday of App Engine, a service somewhat similar to S3.
Conspicuous by their absence is Microsoft, who has no real cloud capability. Not only that, but Google already has Google Docs, which is the start of a Microsoft Office-like suite in the cloud. Is it a threat to Microsoft now? Not yet. But in a few years, absolutely.
Silicon Valley Insider explains why cloud computing is a disruptive technology that poses major problems for Microsoft, since, if you do things entirely on the Net, then you don’t need Windows software or Microsoft Office.