Check out the marketing language for RightScale:

http://www.rightscale.com/

Their "Key Features": (1) Auto-Scaling, (2) Monitoring & Alerting, (3) Load Balancing. Ouch.

But you're right -- the opportunity to provide unique value is in harnessing EC2 for specific purposes and applications.

Yeah, our marketing web site has gotten old, and it'll change within a couple of days. We haven't been selling auto-scaling and assorted features for a while. As Amazon is moving up the stack so are we. We're integrating a lot of the various features and really provide a platform for all the config management, automation, access control, etc. Plus pre-configured stacks that you can fully customize. If you actually try to use Amazon's monitoring and auto-scaling you'll find you have a lot of wheels to reinvent...

RightScale can provide services that span service providers. Currently, AWS is the principal cloud service provider but likely later this year there will be others (i.e Slice Host, FlexiScale, GoGrid, Sun). Services spanning service providers may include migrations, load balancing and redundancy.

It appears to me that RightScale is positioning itself to be a market for cloud computing services. It will be interesting to see if they pull it off.

Also, from the description of the monitoring service (i.e. no agent required) it is likely the monitoring data is collected at the host not the guest OS. So there is probably no process monitoring it follows that application profiling and similar services will not be possible with the data.

Amazon keeps adding really great features to AWS, but the technology that makes companies like Heroku interesting is being able to use them without caring how any of it works.

I Agree. But what's so special about this? Any startup must think about the defendability of its idea. Completing very obvious gaps in the Amazon-offering is surely hardly defendable.

IMHO, their strategy might have been "if we build what's missing in AMZN's portfolio, we might get acquired". Granted, not the best strategy, but this strategy has worked for some in the past.

You hit the nail on the head, except for the copying part. Amazon was already 1 - 2 years ahead of it's competition. This announcement extends that distance and puts a lot of pressure on the third-party commercial tools. There's still value to be had (like cross-vendor support) but that could wane as people realize many of the features they want are implemented in EC2 "out of the box".

Amazon is building an entirely new ecosystem and we'll start seeing news kinds of tools (commercial and open source) built in and around it.

Amazon shouldn't need to warn people of general good business practices. Anytime someone builds a business around a single entity in this case Amazon WS, they are prone for obsolescence when the entity includes "their" functionality into the core offering.

There are many cloud providers now. Startup should be diversifying their offerings to work with all cloud providers this will give their business the best chance for success.

A lot of those startups are offering a much easier starting point, though. They put a pretty face on what Amazon has provided. Building a scalable website infrastructure isn't as easy as a few clicks, even with these new features. There are lot of people who don't want to think about it and just start using EC2, knowing whatever's going on in the background is providing them adequate reliability.