Amazon is maintaining its lead as a cloud computing platform despite the likes of Microsoft, IBM and Rackspace trying to play catch up and with Citigroup estimating cloud computing services could generate about $650 million in sales for Amazon this year.

Just this week Amazon has opened new data centre in Singapore to give customers in Asia, India, and Australia speedier access to its Amazon Web Services business. That business lets companies buy from Amazon, on an hourly basis, computing power that’s delivered over the Internet. The Singapore data centre will target Asian customers and Western companies that have many users in the region.

Rumour has it that in the coming weeks, Amazon plans to introduce simplified management software for more of its 16 cloud computing products to attract business of all sizes to use its platform by establishing a booming business selling cloud computing services including processing, disk storage, and database software to what it says are hundreds of thousands of users, at hourly fees based on how much computing power they consume.

Back in February Goldman Sachs reported that 77% of companies it surveyed using cloud computing development tools were using Amazon’s Elastic Compute Cloud service. About 17% were using software from Google and Salesforce.com and 10% chose Microsoft’s Windows Azure.

Yesterday Business Week reported: “Businesses are rethinking how they manage computing. Given the falling costs of transferring data over the Internet and companies’ realization that managing complicated hardware and software building blocks is often a losing proposition, many are willing to outsource some of the job. In fact, some venture capital firms have made it almost a precondition of investing in startups that they use Amazon’s cloud software, says Citigroup.

“The cloud can lead to sizable savings. InstaColl, a Bangalore-based company that sells online productivity software, was able to save more than 60% on the cost of running the computing, storage, and networking behind its applications by using Amazon Web Services instead of having its own hardware.”

The beauty of Amazon’s web service is that it is a breeze to use, even for a small company just wanting to use it as a back up service. Get an Amazon account, buy in a third party interface such as Cloudberry (reviewed here), set the whole back office function up to run how you want it and that’s it. On top of that the charges for web storage on Amazon is unbelievably cheap.