Traditional IT capacity planning, by the very nature of the logistics of acquiring hardware, installation, configuration and networking, has to take a forward looking view. Complex estimates of the utilisation of resources are made in order to handle the peaks you anticipate. Shown here in red is the level of resources a business needs to install in order to handle the peak needs of a service. Demand on that service might vary by the time of day, week, month or year, or be driven by exceptional demand driven by promotions or seasonal events.
There are many patterns of usage that make capacity planning a complex science. From on and off usage patterns, where capacity is only needed at fixed times and not at others, fast growth where an online service becomes so successful that step changes in traditional capacity need to be added, variable peaks - where you just don't know what demand will be when and best guess applies, to predictable peaks such as during commute times as customers use mobile devices to access your service.
Each of these examples is typified by wasted IT resources. Where you planned correctly, the IT resources will be over provisioned so that services are not impacted and customers lost during high demand. In the worst cases, that capacity will not be enough, and customer dissatisfaction will result. Most businesses have a mix differing patterns at play, and much time and resource is dedicated to planning and management to ensure services are always available. And when a new online service is really successful, you often can't ship in new capacity fast enough. Some say that's a nice problem to have, but those that have lived through it will tell you otherwise!
You control how and when your service scales, so you can closely match increasing load in small increments, scale up fast when needed, and cool off and reduce the resources being used at any time of day. Even the most variable and complex demand patterns can be matched with the right amount of capacity - all automatically handled by AWS.
Back in 2008, they launched a Facebook application that lets people tell their friends when they've uploaded a video that includes that friend. When people saw the music videos their friends created when the application shared it with them, they wanted to go out and create their own videos. Shortly after launching their social networking modification, they were featured on Techcrunch. As you can imagine, this brought them a lot of unexpected traffic. In the course of 3 days, they went from running on 40 instances to 5,000 instances. Because they were using Amazon Web Services, they were able to handle all of this incoming traffic without having to do a thing. AWS managed it all for them.