If there is going to be an incrementing of Web 2.0, Amazon.com may be the company clicking the counter that flips it to the next number. Their release of the EC2 limited beta, called Amazon Elastic Compute Cloud, provides a virtual computing environment and bills only for what capacity is used.

The virtual machine image created by developers can be controlled through web service APIs. As needed, more instances of the image can be commissioned to run simultaneously, numbering hundreds or even thousands. They can be configured to scale up and down in number automatically, based on needs.

Amazon said on its site the EC2 service has been designed to work with S3, which gives developers storage and computing in a combined package. An EC2 instance provides the equivalent of a system with a 1.7Ghz Xeon CPU, 1.75GB of RAM, 160GB of local disk, and 250Mb/s of network bandwidth, according to their documentation.

These instances, dubbed Amazon Machine Images, can be created from scratch from among a number of building block AMIs like web, application, and database servers. Several globally available AMIs that have been preconfigured can be chosen for use to serve a given purpose, without needing to build a custom AMI.

Once created, the developer would upload the instance to the S3 service, and register the AMI. Amazon then assigns it a unique identifier to it. Users can run, monitor, and terminate instances by using the identifier along with the EC2 web service APIs to do so.

Together, S3 and EC2 have a cost structure that could benefit the next cash-poor but idea-rich entrepreneurs who want to build an online service without incurring the massive debt many take on in the form of credit card loans, second mortgages, and other money-raising ideas.

Moreover co-founder David Galbraith blogged that this represented the grid computing idea that has been bandied around by Oracle for some time. He also wryly noted, “If it were Google that had launched this, I imagine there would have been more fuss.”:

Who knows? Maybe the next Amazon.com or the next Google will come from Amazon’s web services.

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David Utter is a staff writer for WebProNews covering technology and business.