What's Great for Amazon May be Bad for Both Partners and Customers

Amazon Web Services (AWS) began in 2006 as a straightforward Infrastructure-as-a-Service offering, delivering the most basic computing and storage options. AWS customers had the flexibility to move their workloads from AWS into their own data centers or even into other clouds as needed.

Amazon partners made a lot of money creating third-party solutions for the infrastructure. Now, as Amazon starts to offer more proprietary solutions like its just-released OpsWorks, many worry that the company is undermining its own partners.

AWS launched the free service OpsWorks thanks to technology acquired from its purchase of Peritor. The advantage for AWS users is that they can manage their applications and configure them without resorting to multiple custom solutions.

The problem is that RightScale, one of Amazon’s Advanced Technology Partners, was already providing similar services. Puppet, AppHarbor and Progress Software are other AWS partners who could suffer because of OpsWorks.

As Jack Clark wrote in The Register, “Developers now have a choice between doing it all through Amazon, or adding in another vendor's tech – and therefore another layer of complication – to their particular cloud recipe.”

Also, if you’re an Amazon customer, then you could be giving up choices because transitioning data out becomes more expensive than putting it in.

Take a look at DynamoDB, which is AWS’s NoSQL database service. Companies start their cloud transition with AWS and start to develop applications using DynamoDB. The problem is that DynamoDB only runs in Amazon’s cloud. Customers using DynamoDB are now locked into AWS. They can’t switch cloud providers.

Moving into management services only makes sense if you’re AWS, particularly when you’re focused on wooing enterprise customers. At the same time, without healthy competition, AWS can significantly raise prices and drop services levels without fear of reprisal.

Last April, Amazon CTO Werner Vogels said, “If we are not delivering the right quality of services, you should be able to walk away. You, the consumer of these services, should be in full control. That is core to our philosophy.”

Driving partners out of business and locking in customers doesn’t seem consistent with that philosophy, but that may not matter if it’s good for revenue.