AWS Storage Gateway allows customers to simplify operations and reduce storage costs by using AWS cloud services. It provides three configurations - Gateway-Cached Volumes for disk backups, Gateway-Stored Volumes for disaster recovery and data mirroring, and Gateway-Virtual Tape Library for long term backups and archiving. Customers pay based on usage and see benefits of agility, durability, security and reduced on-premises infrastructure needs. Setup is easy involving downloading software, provisioning a host, and activating the gateway in an AWS region.