Firms have become Amazon's tributaries

Puget Sound Business Journal (Seattle) - February 16, 2007
by Eric Engleman
Staff Writer

Every month, iConclude, a Bellevue technology startup company, goes to a Web site called Amazon Mechanical Turk and puts out a request for a software fix. Within days, the company gets answers from developers all over the world, as far away as Russia, India and China.

IConclude checks the responses and builds the fixes into its Web-based software product, which troubleshoots corporate IT problems. The company typically pays a bargain-basement price of $1 to $15 for each developer's work.

That makes iConclude one of a handful of young, Internet-based companies in the Puget Sound area that are dabbling in new Web services launched by Amazon.com Inc. The Seattle online retailer is seeking to leverage its huge technology investments by selling Web infrastructure, data storage and computing capacity to other businesses.

"A lot of people think of Amazon as a big retailer," said company spokesman Andrew Herdener. "Amazon fundamentally at its core is a big technology company."

Amazon, he said, has spent 11 years and more than $2 billion building the technology and content behind its retail Web site -- expertise that it's now opening to the outside world.

Many of the early adopters of Amazon's Web services are startups like iConclude. The Bellevue company, which is backed by local venture capital firm Madrona Venture Group and other investors, was one of the first companies to start working with Amazon Mechanical Turk.

Mechanical Turk takes its name from a chess-playing contraption invented by a Hungarian nobleman in the late 18th century. It's essentially an online marketplace where businesses with software needs can connect with freelance software developers looking to make extra cash.

Amazon collects 10 percent of the fee paid to developers for completed work.

IConclude uses Mechanical Turk on a monthly basis, but is moving toward using it weekly if not daily, said company CEO Sunny Gupta. Gupta recently hired a new employee to manage the software developers, or "Turkers," discovered through Mechanical Turk.

"Companies like us can leverage this very, very quickly," said Gupta.

Along with Mechanical Turk, Amazon has rolled out other services that tap its deep reserves of computing power. The company now offers data storage through its Simple Storage Service.