Is Amazon in Danger of Monopolising the Cloud and Everything Else?

Tech Trends E-commerce

Monopolies can be dangerous. Without competitors, innovation stalls and the monopoly holder effectively controls the market, leading to economic stagnation for everyone but the company shareholders.

Amazon, perhaps the most visible modern digital monopoly, began life as a company started in Jeff Bezos’ garage in the early ‘90s, and has ballooned over 25 years into the largest internet company by revenue and the most valuable brand in the world - above Apple, Google and even Disney.

Bezos insists that Amazon is a company built from the ground up to focus on customer needs and that’s still the primary focus above all else. As part of this endless mission, however, it’s only natural that Amazon would want to expand their reach beyond the retail market.

Amazon Web Services (AWS)

Not content with just monopolising the online retail game, Amazon began branching out into the public cloud space all the way back in 2002, when the concept of ‘the cloud’ was still little more than an encouraging concept. As with its parent company, the origins were humble, with the early platform consisting of only a few disparate tools and services.

By 2006, however, Amazon Web Services had already evolved into the comprehensive, ever-evolving cloud computing platform we know today - providing IaaS, PaaS and SaaS offerings to businesses, individuals and (eventually) even governments across the world.

Fast forward to 2019 and AWS controls around 32% of the global cloud market and is utilised by companies as vast and as data-intensive as Spotify, Netflix, Uber and Adobe. Even the US government is signed up!

Indeed, it would appear as if AWS has already begun acting as a monopoly power, to the extent that it might well be big enough to trigger its own antitrust action. And that’s even after you separate AWS from the rest of the Amazon brand, which has itself been accused of selling below cost to build a global monopoly.

Open Source Theft

The open source community has been openly sceptical of AWS from the start and recent movements made by the cloud company have only leant fuel to the fires of discord. The Amsterdam-based Elastic company leads the charge and has every reason to be unhappy.

Their open source Elasticsearch tool has been a significant success story, and is responsible for the vast majority of company revenue. However, in March of this year, AWS VP of cloud architecture strategy Adrian Cockcroft announced the release of their very own Elasticsearch. The action was supposedly taken as a reaction to Elastic changing the rules regarding how its code could be shared - a move made in no small part to prevent AWS from essentially rendering them redundant.

With the availability of the AWS version of Elasticsearch, which will be better integrated into the AWS suite and presumably more fully-featured, why would anyone choose to continue paying a subscription fee to the older, slower service? Out of loyalty, perhaps? But we all know that loyalty counts for nothing in the tech world.

The problem here is in the loose definition of “open-source,” which originally meant it could be freely and openly shared and modified by anyone. Cockcroft argued that Elastic was not playing fair and that “customers must be able to trust that open source projects stay open,” which is a fair argument indeed.

However, Cockcroft is neglecting to take into account that Amazon’s move could feel less like an endorsement of the open source ideals of innovation through sharing and more like a corporate takeover. You can’t be both the underdog and the top dog and you can’t mix commercial priorities with principles, no matter how well-intentioned you might be.

It’s not hard to argue with Elastic for looking over their shoulders, and they are far from the only open source company making changes to ward off the hungry giant. The open source community at large has already leapt to Elastic’s defence too. Steven O’Grady, co-founder of the software industry analyst firm RedMonk, cited the situation as an example of the “existential threat” that a handful of cloud computing giants could pose to the open source community.

Of course, AWS has a history when it comes to startup cannibalisation. In 2015, it announced its data visualisation tool QuickSight, at the same time that partner company Tableau, which provides similar features, announced that it was integrating deeper into AWS. In 2017, meanwhile, Amazon announced it’s “Connect” customer-service software - a product that both competed and partnered with the AWS-operating startup Talkdesk.

So, Elastic is just the latest in a long line of spurned lovers. But you don’t get to the top by playing nice and it could be argued that AWS might have built its name on the work of others, but without them, that work would never have been possible in the first place.

The Solution?

For startups that wish to utilise the power, flexibility and convenience of HPC cloud computing without turning to AWS (or Azure, or Google, for that matter), there are alternatives.

Whilst it might be comforting to throw your chips (or in this case your data) in with an established brand with name recognition and all of the flexibility and security that offers, you’ll only ever get a service that’s as good as everyone else. Why not strive for something better?

AWS represents the jack-of-all-trades of cloud computing - you might get a little bit of everything and a lot of it will undoubtedly be great, but none of it is likely to be truly spectacular either. If the open source community is to be believed, they are also not shy when it comes to taking the best ideas and assimilating them into their own ecosystem.

Amazon has been in the business of devouring its own professional users for years now (just ask its third-party merchants) and it would appear they are now making the same move with AWS. This is particularly true in cases such as Elasticsearch, where a startup’s technology complements the existing AWS suite.

According to a CB Insights report “Amazon is far more than just an everything store, it's a leader in consumer-facing AI and enterprise cloud services and its insatiable appetite for new markets mean competitors must always be on guard against its next moves.”

Smaller public and private data centres might not provide the same wealth of services that AWS offers, but they are more likely to treat you as an individual instead of a number and won’t have the means or the incentive to copy your business model.

Amazon are, ultimately, simply trying to create the best platform they can. And it is an incredibly powerful and flexible platform. But if you truly value your individuality, then you might want to consider giving the little guy a chance.

Written by Benjamin Hiorns

See Benjamin Hiorns's blog

Based in the UK, Benjamin Hiorns is a technology writer with a broad interest including data centers, high performance computing and the evolution of AI. He is also an accomplished musician, producer and songwriter. You can follow him at @HiornsBenjamin

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