Cloud

Amazon just gave the middle finger to Dropbox, Parse, and a bunch of other companies

It used to be that Microsoft could always undercut a startup by copying its services and then selling them. Now, increasingly, leading cloud provider Amazon Web Services is the one to watch out for.

Today, Amazon rolled out products that compete with services from startups that use Amazon’s cloud infrastructure: the Zocalo file-sharing service and new mobile-focused application services. Dropbox and Parse rely at least partly on Amazon to deliver their versions of those respective services.

Amazon has done this sort of encroaching on startups’ existing services in the past. Last year it introduced the Simple Notification Service for mobile push notifications, while customer Urban Airship had similar features. But now Amazon has outdone itself, barreling into two new markets in one day.

“I think it’s reached a high point,” Sravish Sridhar, the founder and chief executive of mobile-backend-as-a-service (MBaaS) provider Kinvey, said in an interview with VentureBeat. “Amazon’s entry into MBaaS as well as the document sharing and collaboration market has shown that, you know, it’s reached a high point where they’ve competed now with a variety of platform vendors, and the next set of big platforms should be worried about it.”

Today’s moves could make startups think twice about whether they want to build on Amazon’s cloud infrastructure as competitors like Google come up quickly. They might turn to Google, IBM, or other public clouds instead.

But it might be early for the impact to be fully clear. For now, companies with mobile backend and file-sharing capabilities don’t seem to be scared out of their skeletons.

While Kinvey’s own website runs on Amazon infrastructure, and while Kinvey enables developers to build and run mobile applications using highly abstracted Amazon computing power, Kinvey focuses on enterprise business. And it supports other public clouds and enables private-cloud deployments, Sridhar said.

“I’m less worried, but if I was completely beholden to AWS, then that’s a different matter,” he said.

KidoZen, another mobile app platform, can also work on Amazon as well as other cloud infrastructure. And it can integrate with enterprise favorites like Microsoft SharePoint software, Oracle databases, and Siebel customer-relationship management software.

“I don’t necessarily have fear at this point,” KidoZen cofounder and chief executive Jesus Rodriguez told VentureBeat. “I think if you’re building on an infrastructure like Amazon and you’re not accounting for that risk, it seems like you’re somewhat naive.”

What’s more, KidoZen provides tools that Amazon doesn’t (yet). It has data-virtualization and data-management capabilities, among other features.

Both Rodriguez and Sridhar pointed to Facebook-owned Parse as the company in a squeeze. It runs atop AWS.

Parse is “remaining on AWS for the time being,” a spokeswoman wrote in an email to VentureBeat. That option, of course, leaves open the possibility of a future migration to Facebook’s own extensive infrastructure, just as Instagram has moved from Amazon to Facebook, but the position at Parse is basically the same as it was a year ago. The statement doesn’t suggest urgency.

Dropbox, for its part, would not comment for this article.

So far, then, the competitive threat could be real in the future, but it’s not quite having real effects at this point.

Look to Amazon cloud customer Netflix, which streams video just as Amazon does.

“Amazon already competes with Netflix, and so far Netflix is not publicly stated that they are going anywhere else,” cloud analyst Larry Carvalho wrote in an email to VentureBeat. “As long as there is a large enough pie to go around and Amazon maintains the lead in cloud services, this may be acceptable to their large customers like Dropbox. Coopetition already exists in existing technology companies like IBM, HP, Microsoft and Oracle — it’s just expanding into the cloud space.”

And anyway, as Amazon sees hot trends and enters more and more markets, it could get stretched thinner and thinner. The result could be a long list of products that can’t keep up with existing competitors.

“I think the AWS team is going to make some shoddy products if they don’t focus over time,” Suhail Doshi, cofounder and chief executive of mobile-analytics company Mixpanel, told VentureBeat in an instant message. “It’ll be a death by a thousand cuts. They only have so many engineers and they can only do so many projects. Every company has to prioritize.”

More information:

Since early 2006, Amazon Web Services (AWS) has provided companies of all sizes with an infrastructure web services platform in the cloud. With AWS you can requisition compute power, storage, and other services–gaining access to a su... read more »

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25 comments
Ajit Rao
Ajit Rao

AWS is the ultimate data bank that Amazon can leverage to enter new spaces. This is one company to watch out for.

Karlyn Neel
Karlyn Neel

That's what Amazon does. It studies its customer's businesses & the undermines them #lame #canttrustem

Arkadiusz Zylka
Arkadiusz Zylka

Oh, I so wait for when they try their bullying in Europe and realize that the legal framework doesn't allow for organizations like Amazon to act in the way they do. :) In short: good luck, Bezos. You will need it.

Bogdan Cirlig
Bogdan Cirlig

Amazon will compete with anyone it make sense to compete, regardless if that company runs on EC2 or other clouds. I don't see that Amazon targets specifically to compete with their customers on AWS or so.

Joshua Darlington
Joshua Darlington

Amazon has been a me too company since day one. Imagine if using amazon cloud was the same as a non compete agreement?

Dave Tropeano
Dave Tropeano

This is much ado about nothing... Amazon is a major cloud infrastructure provider and it is not reasonable to think that they are going to stop adding vertical services to their IaasS... Whether they buy partners using AWS already or they build their own, they have to grow.

Jeff Judge
Jeff Judge

It's not surprising, these services fit perfectly in their product roadmap re: services to support mobile developers as they turn focus to their mobile platform offering. These startups can provide a differentiated product and accelerate market share - the pie is large enough.

Eduardo Giansante
Eduardo Giansante

Wow, dirty move from Amazon on that. As said by others, Dropbox still offers a great UI, is integrated to tons of other apps and most importantly: 300 million end users are there already - wouldn't make much sense to move it all entirely to Amazon or any other service.

Joel Reyna
Joel Reyna

Offering a "copycat" service is not competition.

Gin
Gin

Meh. I stopped using Dropbox when they hired a war criminal.

Antão Almada
Antão Almada

What does hosting have to do with copying ideas? I don't believe Amazon copied the code from their customers. Anyone can copy a service, independently of where they are hosted, as long as they are not patented. 

Simple ideas can be easily copied. Wait just a few more days for dozens of YO clones....


Jason McMahon
Jason McMahon

Has Amazon turned off or inhibited Dropbox or Parse in any way? No. What difference would it make if they were hosting on Amazon or Google? They would still have a potential new competitor in Amazon. Amazon uses the exact same infrastructure for their services, that is available to their AWS clients. Dropbox and Parse should be able to innovate at a faster pace, given that they are focused offerings. This article implies an issue or conflict, that doesn't actually exist.

Travis Bailey
Travis Bailey

I will never use Amazon again, for the same reasons I never shop at Wal Mart.

James Gardner
James Gardner

It would seem that Dropbox, Parse and a bunch of other companies just learned an old lesson about not building your home on rented land. If it can be taken away from you, don't be surprised when it happens. (That said, it's a foolish strategic move by Amazon. Who will ever trust them again as a service provider. Are you watching Google, Facebook, and Twitter?)

Lafayette Howell
Lafayette Howell

Competition is great, and thus the challenge. With enterprise customers could hurt Dropbox, Box et al because Amazon can easily thrown in for close to free. Data intensive industries where large size files are shared is natural fit. @uberconsultant

Lafayette Howell
Lafayette Howell

More fundamentally, Dropbox got strategically jousted. Challenge for Dropbox is to now stay ahead with design and, UX with a focus on total experience, because they cant win on price. Now figure out how to integrate with Evernote.

Bruno Rabelo
Bruno Rabelo

Rafael, olha aí cara a putaria da Amazon! rsrs

Joe Reis
Joe Reis

Amazon - welcome to 2010.

Jeff Nelson
Jeff Nelson

Amazon walks a dangerous line with its ecosystem, but it has since adding EC2 to S3 where many of its customers were in hosting. What my mind races with is the inside information AWS has for usage, architecture, market segmentation, cross-product synergies, etc. Data analytics of their enormous cloud creates business cases for product development. They should sell admission to that data science marvel.

Al Tyu
Al Tyu

Can we really call Parse a startup given they were acquired by Facebook?