Stuck in Amazon's web tentacles yet? You will be soon

Market dominance means AWS is hard to avoid, and even harder to quit

Comment Cloud portability desperately wants to be a thing, but there’s a far greater force pushing against it. It’s called Amazon Web Services (AWS), and chances are you’re already stuck.

Oh, sure, you can cling to containers as a way out, as Bloomberg’s Olga Kharif recently wrote.

But containers won’t help you. Not when you’ve given yourself so willingly to AWS platform-as-a-service (PaaS) and other offerings, as detailed by Mark Campbell on the Unitrends blog.

By introducing a torrential downpour of services, AWS is effectively ratcheting up the switching costs associated with a jump to rival clouds like Microsoft Azure. It’s clever, and it’s working.

All your PaaS belong to us

We tend to think of Amazon Web Services as an Infrastructure-as-a-Service (IaaS) vendor, and it is. AWS dominates the industry with EC2 (compute), S3 (storage), and more cloud infrastructure services.

In part, this is because Amazon continuously drops the cost of already market-leading offerings, as Campbell states:

When Amazon introduced AWS, it made headlines for continually decreasing its pricing.

Its IaaS prices were low – and it seemed like every few months they were going lower.

This, coupled with an on-going shortage of IT administrators that made cloud economics operationally much more attractive, resulted in many of the one million customers AWS has today.

As Battery Ventures (and former Netflix cloud chief) Adrian Cockcroft highlights, AWS has maintained this price lead even as Google and Microsoft sought to undercut its pricing.

But, really, AWS’ dominance was never about mere infrastructure. Or price.

If we look at the dizzying array of services AWS has introduced just in 2015, it’s clear that we’re not just talking about IaaS, and that AWS seems to be able to invest heavily in innovation even as prices drop.

Cloud luminary Randy Bias nails this point: “The real economies of scale that are relevant here are the tremendous investments in R&D that have led to technological innovations that directly impact the cost structures of Amazon Web Services.”

In other words, AWS uses its dominance not necessarily to drive fatter profit margins for itself by buying cheaper hardware, etc, but rather to innovate new PaaS and other products that further cement its hegemony. Campbell explains:

What AWS is doing is attempting to build a sustainable competitive advantage through an aggressively expanding set of services built upon its infrastructure that are linked inherently into their pricing model.

There will always be some set of services – whether simple storage or container-based compute – that will serve non-optimized applications regardless of the cloud platform.

The real advantage will be the innovation that occurs at the platform level – and how well AWS is able to continue to recruit native development for those services in exchange for helping its users build their own economic moats.

Did you catch that? AWS services reinforce each other. Vendors can talk about moving apps from cloud to cloud by packaging them in containers, but that (IaaS) cloud portability founders on the rocks of (PaaS) lock-in. It’s only going to get better (or worse). But AWS isn’t content with IaaS. Or PaaS. The company started with IaaS, and complements it with PaaS, but the company has been expanding beyond these relatively basic services for some time.

As Amazon CTO Werner Vogels insists, AWS is in: “The business of pain management for enterprises,” and there’s no shortage of pain to manage:

This is a business that will be as big as our retail businesses if not bigger ... It took us six years, or until 2012, to get to one trillion objects stored.

Then it took us one more year to get to two trillion. So that’s an indication of the speed of growth. To my eyes, that it only took a year to get to two trillion, it looks like the onset of a hockey stick.

That “pain management” continues to show up as cloud services we’d normally associate with IaaS or PaaS, but it has also branched out into things like Device Farm (a way to simulate a horde of disparate devices for testing mobile applications), WorkDocs (document collaboration), WorkMail (an email and calendaring solution meant to challenge Microsoft Exchange) and a host of others (analytics, data warehousing, machine learning, push messaging, and more).

Years ago, Redmonk analyst Stephen O’Grady declared: “Convenience trumps just about everything” when it comes to technology adoption.

It certainly explains the steady drumbeat of AWS market dominance. Amazon is, quite simply, making itself hard to avoid, and even harder to quit. ®

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