Will Amazon Become The King of Web Hosting Too?

Amazon’s (s AMZN) web services (AWS) are on track to being a half-a-billion dollar business. They’re home to some of the hottest startups on the planet. Even older startups use their infrastructure. And despite all the false rumors, pharmaceutical giant Eli Lilly is a customer (s lly). Ironically, the company which put the “cloud” in cloud computing has found a fast growth opportunity in a decidedly old fashioned business — web hosting.

While the company’s web services continue to gain traction with folks looking for on-demand compute resources, AWS has seen an uptick in folks using it for steady-state applications (a euphemism for web hosting), according to Adam Selipsky, Amazon Web Services’ vice president of product management and developer relations, who stopped by at our offices to discuss various Amazon Web Services initiatives.

Newsweek and the PBS network are using AWS for hosting their web sites. In addition, large e-consulting firms such as Digitaria and Razorfish are adding a few thousand sites a year to Amazon, Selipsky said. ?From movie sites to hosting apps for large brands, Amazon suddenly (and perhaps unintentionally) finds itself competing with thousands of web hosts. As more and more media companies integrate Internet and mobile applications into their overall product mix, they’re likely to spend more on their infrastructure needs.

Just as Dell (s dell) and their ilk benefitted from close ties with old-fashioned consultancies and sold a lot of hardware to their clients, Amazon can now find itself benefiting from the growth in demand for the services of these new e-consultants. ?These e-consulting firms are pretty influential, especially when it comes to attracting corporate clients. For instance, Digitaria client Hasbro (s has) is hosting the website of its Monopoly game on AWS. It cost the company nearly half of what it would have cost on a traditional hosting set-up. (More details here.)

The looming presence of AWS in this market should worry current players such as RackSpace (s RAK) and The Planet (which is said to be in the process of merging with SoftLayer, another hosting company).

Related Research from GigaOM Pro (subscription required): The Evolution of the Private Cloud