Original URL: https://www.theregister.com/2013/03/08/amazon_copies_partner_products/
Amazon accused of knocking off AWS customers' products
Partners: Cloud kingpin playing the copycat game
Posted in SaaS, 8th March 2013 19:25 GMT
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."
Some AWS partners get a raw deal
Amazon has a duty to make money for its shareholders, so its expansion into other areas is not surprising. But from The Reg's point of view, some of Amazon's technology partners are getting a raw deal.
For one thing, partners do not receive notifications of Amazon's plans to create knock-offs of their own products, The Reg has learned.
In addition, even after producing a knock-off, Amazon representatives pump their partners for information about how they can improve the product, we've been told.
"After sharing with them twice what we do and seeing what we showed them show up totally copied by them, I think this time I will respectfully pass on the pleasure," Newvem's Laderman told us via email after he had received another request for information from Amazon following the launch of Trusted Advisor.
When Amazon started offering rentable compute and storage services in 2006, it was clear that Bezos had big plans for the division. But as it has come to dominate the basic infrastructure-as-a-service market, the company has sought to expand its platform with new services.
This had led to a Cambrian explosion in the number of companies that either sit directly on AWS – Heroku, for example – or that produce services made possible by AWS technologies – such as Zencoder.
This growth has provided Amazon with the twin benefits of locking customers into its platform by encouraging them to code applications for some of AWS's less-commoditized technologies, and of giving Bezos & Co. a verdant third-party ecosystem to pick through for inspiration for future AWS services.
"Amazon wants to get you and any other cloud vendor to couple to their infrastructure," Concurrent's Wensel tells us.
Just how high up the stack Amazon will go remains to be seen, but right now its partners are nervous, and some of them feel that they are paying for the privilege of having their products inspire new AWS services.
"The official AWS line is that they don't want be any higher up the stack than they already are. But this line has moved in the past, and it may move in the future," Zencoder's Dahl says. "Anyone building API utilities needs to take this into account."
When The Register contacted Amazon for a statement, a spokeswoman for the Seattle cloud giant wrote:
We want to give our customers a lot of options for how they deploy and build their applications, from both AWS services and our growing partner ecosystem. ... Customers should be able to choose the right solution for them based on their business and technical requirements. We're constantly building new AWS services and adding new features that make it easier for businesses to use our services. At the same time, we continue to invest in growing our partner eco-system, so ultimately customers have choice and flexibility in how they build and deploy their applications on AWS.
If you read between the lines of the statement, it sounds like Amazon will keep building, and partners will need to keep running up the stack away from the wave of commoditization flowing forth from Amazon. ®