Prime Leverage: How Amazon Wields Power in the Technology World(nytimes.com)
nytimes.com
Prime Leverage: How Amazon Wields Power in the Technology World
https://www.nytimes.com/2019/12/15/technology/amazon-aws-cloud-competition.html
10 comments
There is no possibility to ramp up a new technology from slow to fast. You must go fast and huge out of the gate, or else AWS will drop in after 6 months and take most of your addressable market before you've even got off the ground. You're too slow when Amazon will put a team of 40 against your 5 person startup. And unlike Google/Hooli, they have a good chance of not screwing it up.
Almost every one of the vendors at the AWS reinvent expo this year that have an "advantage" in AI, data insights, etc, will be competing with an AWS service by next year. Snowflake, Datadog, Splunk, etc. All the innovation in the room gets sucked up by the big company and offered at scale. The best you can hope for is to have a better UX and a brand that people will demand.
The ones who will need to worry less are the ones who already have contracts with enterprise businesses. Relationship rather than technology companies.
Almost every one of the vendors at the AWS reinvent expo this year that have an "advantage" in AI, data insights, etc, will be competing with an AWS service by next year. Snowflake, Datadog, Splunk, etc. All the innovation in the room gets sucked up by the big company and offered at scale. The best you can hope for is to have a better UX and a brand that people will demand.
The ones who will need to worry less are the ones who already have contracts with enterprise businesses. Relationship rather than technology companies.
> You're too slow when Amazon will put a team of 40 against your 5 person startup.
That part is not true.
Amazon/AWS bootstraps new products much as a startup would - with teams of 5-10 max.
I acknowledge the difference in runway availability and radically different risk of failure.
But the actual dev teams are small.
That part is not true.
Amazon/AWS bootstraps new products much as a startup would - with teams of 5-10 max.
I acknowledge the difference in runway availability and radically different risk of failure.
But the actual dev teams are small.
Amazon's approach to open source software seems fairly simple to me:
if non-restrictive license
sell it to customers
else
fork the project, rebrand it, and sell it to customers
I understand the difficulty of trying to simplify very nuanced issues for a general audience, but The Times did a particularly poor job here.
Open-source software isn’t hard to explain: free software created in the open by many contributors with licenses on how it can be used.
From there: Amazon targets open source projects widely used with licenses that allow it to offer management of the software deployment as a service. This directly competes with some start-up models that rely on an open source license to draw in users, then offering them auxiliary services.
Open-source software isn’t hard to explain: free software created in the open by many contributors with licenses on how it can be used.
From there: Amazon targets open source projects widely used with licenses that allow it to offer management of the software deployment as a service. This directly competes with some start-up models that rely on an open source license to draw in users, then offering them auxiliary services.
It sounds like these companies need to license their product so another company cannot enhance or modify the software and resell it. I don’t know the legal framework well enough to know how difficult that is, but it sounds like that’s what companies have started doing.
On a side note - the NYT has a piece on any one of the tech companies about every single day. No doubt these companies do questionable things, but I question the Times motives and biases when they’re focused so much on one industry or a handful of companies. I spent almost two decades working in oil and gas before shifting my career to software in 2012. I don’t recall a time when the the Times was hyper focused on my industry then. Not that it excuses FB or Amazons behavior, but I do believe the Times has a personal interest in seeing these companies fail, as they compete with the Times.
On a side note - the NYT has a piece on any one of the tech companies about every single day. No doubt these companies do questionable things, but I question the Times motives and biases when they’re focused so much on one industry or a handful of companies. I spent almost two decades working in oil and gas before shifting my career to software in 2012. I don’t recall a time when the the Times was hyper focused on my industry then. Not that it excuses FB or Amazons behavior, but I do believe the Times has a personal interest in seeing these companies fail, as they compete with the Times.
Using "copy" as the description of what Amazon did in the opening paragraph sets the tone of what they are trying to do here. Open Source is not even mentioned until most people have stopped reading.
Economist here, wondering how to measure the net gain or harm. If more useful open-source ideas used to be generated by companies hoping to profit from ancillary services like product support, and now those innovators have retreated because they expect Amazon to poach their ideas, then that's harm.
But quantifying the generation of useful ideas is hard. Moreover that harm has to be weighed against the benefit Amazon brings to the users of AWS.
But quantifying the generation of useful ideas is hard. Moreover that harm has to be weighed against the benefit Amazon brings to the users of AWS.
This is ridiculous; so Amazon aren't supposed to use open source software or offer services that compete with startups?!
It's suspect when papers side with accusers and adopt their rhetoric wholesale, this kind of advocacy delegitimizes all their other reports IMO.
It's suspect when papers side with accusers and adopt their rhetoric wholesale, this kind of advocacy delegitimizes all their other reports IMO.
Software startups should be worried about AWS (and "Big Cloud" in general), especially those in the AI/ML, serverless, stream processing, containerization, IoT, data warehousing, and batch processing space. Those are the fastest growing cloud services and AWS knows it.
I wrote about this at length and suggest ways to punch back: https://www.gkogan.co/blog/big-cloud/
One retort I've seen from AWS defenders is: If AWS is so bad for startups, name one startup that was killed by AWS?![0]
Two problems with this argument:
1. Most startups die in a whisper, not a bang. They fail before ever making a name for themselves in the market. And I happen to know that this journalist had no issues finding startups that failed or struggled, but did have issues getting them to speak on the record. Because who wants to be the loser in the story?
(And yes, I do know several companies that were doomed because of the challenges mentioned in my essay.)
2. The startups that do come to mind easily--the same ones the AWS supporters show as proof that there's a level playing field--only do so because they managed to reach significant market- and mind-share before AWS swooped in. By now they're large enough to be able to chug along a while longer despite the intense (and arguably unfair) competition. Their survival, however, is far from certain.
[0] Example: https://www.lastweekinaws.com/blog/amazon-isnt-killing-your-...