According to Amazon - Amazon Web Services (AWS) delivers reliable, scalable, and cost-effective computing resources on which to host your applications. You can use the following AWS components alone or combined to host your application(s): Amazon Elastic Compute Cloud (Amazon EC2), Amazon Simple Storage Service (Amazon S3), Amazon Relational Database Service (Amazon RDS), Amazon CloudFront which provides a high performance, globally distributed content delivery system, and more.
Application providers who are building SaaS-based (Software as a Service) applications quickly learn that owning and operating the infrastructure on which these solutions are hosted can be expensive and complex, especially when customer demand is uncertain. With the Software-as-a-Service (SaaS) model, businesses can consume applications that are hosted online, enabling them to lower their costs by paying only for what they use, enjoy seamless and painless upgrades in functionality, and integrate easily with their existing data and systems.