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Amazon accused of knocking off AWS customers' products

Partners: Cloud kingpin playing the copycat game

Internet Security Threat Report 2014

Exclusive The torrential growth of Amazon Web Services' cloud is coming at the expense of the web giant's customers, some of its partners contend – and they're not happy about the tactics being used by the company.

For several months, Amazon has been encroaching onto the turf of other companies, typically by producing knockoffs of existing third-party services and undercutting those services on prices. But some partners have had enough and are speaking out.

"What Amazon does with every partner is they like what they see and they copy," chief executive of Newvem Zev Laderman, told The Register. "The Amazon partner program is a one-way street."

Laderman spoke with us after Amazon launched a free offer of cloud capacity-management product AWS Trusted Advisor, just two weeks after Newvem had initiated a free version of its own similar technology.

"We're now in the rank of companies that are getting totally copied by Amazon," Laderman said.

Newvem is one of Amazon's 600 or so technology partners – companies that pay the cloud giant an annual fee of between $1,000 and $2,000 for a listing on its partner site, pre-briefings on upcoming AWS features, technical support, and a gaggle of other benefits.

Other companies which appear to be be affected in the same way include video transcoder Zencoder and capacity manager Rightscale.

Rightscale, a company that produces a range of cloud management tools, was recently singed by the launch of Amazon's OpsWork tech.

After that launch, Rightscale published a blog post in which the cloud management company said:

While still in beta, OpsWorks is an interesting service and we'd like to share our thoughts on what it means for customers – beyond the fact that it's a clear validation of the need for a more comprehensive management solution.

To translate: Amazon has launched a product very much like ours, but it is untested so it could break on you, and it can't do quite as many things.

"Rightscale was always in the headlights," Chris Wensel, the CTO of data analysis platform and Amazon partner Concurrent told The Reg. "What they did was great, but they didn't have the same control and couldn't make the same decisions. If you want to partner [with Amazon] and you're doing things and you're a feature on something inside of Amazon, you could probably get hit by the Amazon bus."

Zencoder is another company that says it was hit by Bezos's low-margin bus.

The video-transcoding company's technology has been running on top of Amazon for a years, but at the end of January Amazon launched Amazon Elastic Transcoder at $0.015 per minute for standard definition video, versus ZenCoder's $0.02. Amazon also threw in 20 free minutes per month.

"We went into Zencoder knowing that Amazon may compete with us in the future," Zencoder cofounder Jon Dahl told The Reg. "When we got started, Amazon had been slowly creeping up the value chain for a while. But we felt like we knew how Amazon would approach our space, and we made sure we were strong in areas where AWS is weak, like support, design, flexibility, and feature-completeness. When they launched Elastic Transcoder, it was exactly what we expected."

Internet Security Threat Report 2014

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