Companies running on AWS accuse Amazon of copying

By Graeme Burton
11 Mar 2013 View Comments
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More companies are complaining of unfair competition from Amazon Web Services (AWS), suggesting that Amazon has created AWS-based services similar to their own, pricing them aggressively in a bid to win market share.

The claims come less than a year after retail giant Marks & Spencer revealed to Computing that it is migrating its online platform from Amazon Webstore, another part of Amazon's third-party services, for fear that it may give a retailing rival too great an insight into its own web-based operations.

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M&S had gone live on the service in 2007, but expects to complete its migration by 2014. Amazon Webstore is a service provided by Amazon, whereby customers can run their online stores on the code base of Amazon.com 

The new concerns have been driven by companies such as Newvem, which claims that Amazon offered a free cloud capacity-management service, called AWS Trusted Advisor, just two weeks after Newvem had gone live with a free version of its service.

Newvem CEO Zev Laderman has accused Amazon of copying the work that its partners have done on AWS, taking their ideas, implementing them and offering them at a low price.

Amazon's AWS technology partners pay the company an annual fee of between $1,000 and $2,000 for the privilege of hosting their web services on AWS, while Amazon also lists their offering in its directory.

But Newvem is not the only company that has spoken out. Other companies to speak out include Zencoder, which produces a video-transcoding service, and Rightscale, which also offers capacity management tools.

For example, while Zencoder has been available for a number of years, Amazon launched the competitive Amazon Elastic Transcoder service at the end of January at a price of $0.015 per minute for standard definition video, undercutting ZenCoder's $0.02 per minute price, while also offering 20 minutes free per month.

While many web services companies that host on the Amazon cloud half-expect competition from Amazon itself, Laderman suggested that Amazon representatives had sought information about the company's products before the competing Amazon products were launched.

AWS has rapidly become the 900lb gorilla of web services since it was started in 2006. The infrastructure-as-a-service from Amazon, which offers both storage and rentable computing power, has encouraged a plethora of start-ups that can use Amazon's infrastructure to offer a range of services over the internet on either a per-minute or per-usage basis.

However, with AWS offering more and more web services over its own infrastructure, many third-party providers feel they are being burned by the competition from the infrastructure owner.

M&S's decision to cease using Amazon Webstore was, likewise, driven by a recognition that Amazon is a competitor to the UK-based retail chain, and the fear that its traffic running on Amazon's infrastructure could potentially be used by Amazon to gain a competitive advantage.

"Amazon is a competitor," M&S CIO Darrell Stein told Computing. "So when all the technology you're basing your business on is owned by the competition, you're not in a very sound position strategically."

Amazon, though, claims that it cannot see any traffic or customer data on either Amazon Webstore or AWS. 

Furthermore, as a bricks-and-mortar, as well as online, retailer M&S needed to bring together all the retail data it was generating in one place, rather than using separate infrastructures for the two different types of sale.

"We have store data generated from PoS [point of sale] and online data generated by Amazon's systems," said Stein. "We need to bring that data together to compare and analyse it, and that will become much easier with our own platform. It's hard to manage at the moment, because we have two different systems across two different firms."

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