
Ask HN: What happened when Amazon moved into your business? - boldslogan
Without going too much into my own product. I have recently found out after watching the AWS conference that I am now directly competing against an Amazon product... I am looking for stories of how your company reacted and maybe the successes or failures...
======
aspir
I work for an competitor to an AWS product. We've grown rapidly over the past
~7 years in a generally competitive (lots of startups, some really old tough
incumbent companies). Without revealing too much on our end, here's some
lessons learned:

* AWS is bad at customer service, even for their large or premium customers. If you position yourself, and _seriously_ invest in making your company's culture rooted in exceptional customer service, that's a foothold.

* Don't compete on price. This is hard for most tech startups, as pricing is a very difficult thing to do properly, but resist the urge to drop price to compete. You'll never have the scale, the supply chain masterminds, or the financial modeling to compete with AWS on price, so position yourself as a premium or luxury offering and don't be afraid to price accordingly. If you do the first step properly (a deeply rooted culture of service) you'll be able to justify the price.

* AWS has great uptime, but often the actual operating performance of their service isn't that great, especially when you push the products beyond the 80% use case. They know that for the majority of their customer base, best-in-class performance isn't actually business critical (despite how flashy it sounds). However, there is absolutely a market for people who truly need best in class performance, or product flexibility, or some other best-in-class trait (latency, interaction design, etc.). Find who these people are, and optimize for that ruthlessly. This focus, in combination with the culture of exceptional service and positioning your brand as a premium provider, puts you into a completely different market space than AWS.

~~~
philliphaydon
Really? I’ve had better customer experience with AWS than Azure or GCE... Even
their SDK devs are responsive, I raised a bug for the SDK for their queues and
went to bed, woke up and they had published a new SDK with the fix after 7
hours of raising the ticket...

There is a lot to dislike about AWS but from my experience customer server
isn’t one of them...

~~~
electricEmu
What was your experience like on Azure and GCE?

Azure had me on the phone within minutes of filing critical issues. Their
engineering department provided updates all night.

Amazon issue resolution could be summarized as "won't fix" or "someday/maybe".
Their API inconsistencies might be considered a poor developer experience [0].

It's great you like AWS. I do too for some use cases! I disagree their
customer service is "better" though.

[0] [http://apievangelist.com/2017/01/05/what-i-learned-
crafting-...](http://apievangelist.com/2017/01/05/what-i-learned-crafting-api-
definitions-for-66-of-the-amazon-web-services/)

~~~
ToFundorNot
We had an instance crash (first time), once we were bestowed the honor of
submitting a ticket after an hours of downtime (to which the clock only
started an hour after the instance went offline, we were able to solve the
issue ourselves, and closed the ticket an hour after submitting it... to which
a couple of days later we received a response asking about the issue.

~~~
philliphaydon
Ah I had that experience on Azure. With aws we have paid support so when we
have issues and raise critical tickets they respond in ~20m but azure. When
they were still doing sql server as a service I lost access to my database.
Support told me there was no problem. The azure insiders forum said others
were having issues. The support wouldn’t even acknowledge I couldn’t access
the database. 2 days later I finally got access again randomly. I never got a
response to why this happened. I’m just Glad this was a non production
application for some contract work but they ended up wanting to go aws over
the experience.

I Guess at the end of the day we all experience different levels of support
from all these providers.

~~~
mattmanser
I got some support from Azure a few months ago asking about DTU spikes, more
of a shot in the dark than hoping for a good answer, but got an extremely
good, knowledgeable woman go through it with me within a day. We only spend a
few thousand a year at the moment.

I may hate their admin interface, but their support was top notch in my
experience.

------
orliesaurus
I wasnt the owner of the business but I worked for an "email infrastructure"
company (think Sendgrid but not US based). When amazon launched its SES offer,
things started to get pretty grim.

\- Their infrastructure was better (stable)

\- Their price was much, much lower (pricing)

\- They are Amazon and they're global. (company image & trustworthiness)

Going to meetups and developer conferences people would always ask "why not
use SES haha it's a no brainer" Pricing yourself in between Mailchimp and SES
was a good fight and ultimately it did help convert a lot of "Mailchimp"
affectionados.

Luckily getting emails delivered in the inbox of your customers is a bit like
dark-magic - there are a lot of factors that a regular joe wouldn't consider,
and because email marketing is still one of the best channels with the highest
ROI ever - companies really care about setting up their email campaigns with
companies that know all of the tricks and rules to optimize campaigns and
ensure maximum open and ctr rates. Another thing: Data protection laws in US
and EU are different, the company had the advantage of having datacenters
exclusively for EU customers (where more rigid rules were applied) and then
all the others...

The business focused on creating frictionless experience with stellar customer
support (24/7) and also worked a lot on its dev-first marketing approach (im
talking about developer experience, plugins, wrappers, integrations etc). One
of the advantages of owning your own infrastructure and whole stack is that
you can build and configure your product to fit every client's need. Something
that Amazon has never managed to deliver out of the box - especially because
email is a tool used by developers and marketers at the same time. It's really
hard to make marketers happy!

The business is still around today, I learned a lot but I ultimately moved on
because like I told my friends "email isn't sexy" Email is painful, email is
great.

~~~
albertgoeswoof
This is a great example of excellent product strategy, these are all points
AWS are unlikely to compete on. Great to hear that they’re still in business

------
tlb
It's a different business, but Instacart recently had to deal with Amazon
offering home grocery delivery. According to [0] it's working out because
every other grocery chain realized they needed same-day home delivery in order
to not get killed by Amazon, and they mostly went with Instacart.

By analogy, your strategy could be to provide the service for every other
cloud provider. They watched the AWS conference too, and don't want to be left
behind on any features.

[0] [https://www.forbes.com/sites/bizcarson/2017/11/08/amazon-
who...](https://www.forbes.com/sites/bizcarson/2017/11/08/amazon-whole-foods-
deal-future-of-instacart-grocery-delivery/#758d3a076d5a)

------
jedberg
Every company I know of that this happened to, and I know of at least five
personally and others via 2nd hand, disappeared within six months.

One of them went on to start a new company and was acquired by Facebook for a
whole lot of money.

But overall the outlook isn't great, and here's why. Amazon is great at the
"80% solution". If you're already in AWS, and they have something that does
most of what you want, it's way easier to use that than try and integrate with
someone else.

So if what you're doing is only in AWS and isn't _significantly_ better than
what they offer, the news isn't good.

I'm sorry this happened to you. :(

~~~
scarface74
It's the old "No one ever got fired for buying IBM". Why would I choose a
slightly better product from an unknown company? If it was the wrong decision
it calls my competence into question. If I choose AWS and it was the wrong
solution, no one will bat an eye because they would have made the same choice.

~~~
akinjide
You'd have to weigh or SWOT your decision, using a better product from an
unknown company that might offer more or from a trusted company (AWS) that
offers less. Especially if, the unknown company is offering something the
trusted company isn't

~~~
blowski
The thing about "nobody ever gets fired for buying IBM" is that going with an
unknown alternative is a risk to you personally and most of the benefits go to
the company. When you over-spend on a well-known brand, the company suffers
the costs and they barely even notice. The only time they care is if something
goes wrong, and then they want to know why you chose an unknown brand.

~~~
akinjide
Say something went wrong, and the company is questioning why you went for an
unknown brand. My answer to that would be they offered more value than the
trusted brand, also I would have notified necessary stakeholders before making
that decision of using services provided by the unknown brand.

~~~
blowski
Or you could save yourself the risk and all the hassle, and just go with the
well-known brand. It's not necessarily what you _should_ do, but it is what
often happens.

------
avar
I work for Booking.com. Amazon entered the hotel reservation business in early
2015 with Amazon Destinations, and then inexplicably shut it down a few months
later[1].

At the time there was the expectation that they'd drop commissions to the
floor and compete on ultra-thin margins, and there's certainly a lot of room
for that in the travel industry.

But they didn't, and then just left within a few months. Weird.

1\. [https://techcrunch.com/2015/10/14/amazon-shuts-down-its-
hote...](https://techcrunch.com/2015/10/14/amazon-shuts-down-its-hotel-
booking-site-amazon-destinations/)

~~~
akinjide
Pretty sure they did a lot of market research before calling shutting down,
most companies make decisions that's align with their goal/aim.

~~~
EpicEng
So you're thought is that the market research they had three months prior to
shutting down was significantly different than what they had three months
later? I'm pretty sure you're not pretty sure of anything here.

------
throwawaycl
We have a personal experience to share. Posting from a throwaway account for
obvious reasons. We have a product in aws marketplace with decent traction. We
have also gone jointly with aws for some big opportunities in government
space. They have started thier own competing product in the same space and
started sabotaging our joint opportunities with large customers. AWS
marketplace is a big idea engine for them to identify profitable opportunities
and copy the products ruthlessly. Our stomach twiches as they copy every one
of our features including the UI.

It is unfair for startups but i guess that is business. I think dropbox moved
away from them for right reasons.

Think twice before listing your products in aws marketplace. You will be thier
next victim if you become profitable. AWS for startups is the biggest joke of
our time.

~~~
martin-adams
I've heard stories of this happening on the retail side. They monitor what
products third parties are selling well, then start selling it directly
themselves.

------
shakkhar
Don't despair. Despite common perception, most AWS products are half-baked and
clunky. (I don't have much experience with other Amazon products.) A while ago
when GCP appeared in the scene, the team I was in performed a series of tests
to evaluate it. In all our tests, GCP came out ahead of AWS. On top of that,
their documentation and UI was better and prices were lower. That's part of
how Google managed to get a foothold in the cloud services space.

AWS premium support doesn't help much when you are fighting fire because the
first line support staff is clueless. It will take you days to reach a person
who can actually help you.

IMHO, if you are offering a standalone product, you can always do better than
Amazon (AWS). Whether you can beat them depends on variables other than the
quality of your product.

~~~
qaq
I worked for a company that was in 50K/ month spend in AWS there is basically
0 service. Now I work for a company with serious monthly spend in millions we
pretty much can get access to competent eng. immediately.

~~~
eropple
It's all about who your TAM is. A good TAM will have your back from the jump.
A bad one...not so much.

~~~
moreless
TAM == Total Addressable Market

~~~
eropple
TAMs are technical account managers. You get them with the enterprise support
that you should be buying if your livelihood depends on AWS.

------
wgerard
Somewhat of a counterpoint, though with a huge caveat because I was just a
grunt:

I used to work at Etsy, and Amazon launched a competing product in 2015. Cue
the frenzy about Etsy's imminent doom. Hasn't happened yet.

Etsy's gone through troubles, obviously, but while I was there at least the
general feeling/consensus was that Shopify is by far a bigger threat than
Amazon. It's incredibly unclear, at best, whether Amazon has siphoned off any
appreciable part of Etsy's market.

Different products and spaces, obviously, but just a reminder that Amazon
doesn't get it right 100% of the time (see also: fire phone).

Also worth noting that SES hasn't put Mailgun/etc. out of business completely
(though that's a bit of a stretch of a comparison, I'll admit).

~~~
detaro
Etsy's biggest threat seems to be themselves really (which pushes people to
things like Shopify).

Also not surprised that Amazon hasn't made much of a dent for them: Amazon
site isn't all that good for actual browsing _and_ tries to diminish seller
identity.

------
drspacemonkey
I've never been hit by it personally, but I know two people from different
companies that found themselves in the same situation.

The first went through the stages of grief, and "acceptance" meant shutting
down. The second company had the option to pivot and focus on a specific
feature that AWS lacked, but the company decided against that plan. According
to my friend over there, management is still in denial over the severity of
the threat. He's looking for other work, and so are most of his co-workers.

Unfortunately, this is not good news. On the plus side, you're cognisant of
what you're facing, which means you can start looking for ways to pivot.
Failing that, you can decide to bail before things become critical.

I'm really sorry to hear you're in this situation. For what it's worth, you're
in good company.

------
matte_black
There’s really only one AWS product you wouldn’t want to compete with, and
that’s EC2 (and possibly S3). Mostly every other AWS product you can build a
better or more niche alternative at a higher price point and still get
business.

~~~
thsowers
I admittedly haven't looked into this as in depth as I would like to, but I
recall being surprised by Digital Ocean's "Droplets" (similar to Amazon EC2)
being far cheaper[0]

[0]:
[https://www.digitalocean.com/pricing/](https://www.digitalocean.com/pricing/)

~~~
eropple
DigitalOcean is not comparable to EC2 unless you are literally-literally only
using compute. The second you want a network that is private to you or any
sort of hosted solutions for stuff like SQL databases, DigitalOcean folds.

I use AWS despite the (moderate, and with reserved instances largely
nonexistent) premium on compute because of everything else that's right there.

~~~
3131s
> The second you want a network that is private to you or any sort of hosted
> solutions for stuff like SQL databases, DigitalOcean folds.

Can you explain what you mean by this?

~~~
eropple
EC2 has VPC, a software-defined networking solution with route tables,
subnetting, ACLs, the nice abstraction of security groups, and (importantly)
the ability to peer separate VPCs, across multiple accounts.

DigitalOcean does not have VPC; they've had a backplane of "private network
IPs" isolated merely to _all DigitalOcean customers_. This month they instead
_changed their underlying system behavior_ (WTF) to isolate their private IPs
to your account. So they also just broke that for their customers. On top of
that--can you firewall/segment off that private network to certain machines?
Nah. Can you talk to other customers' machines over this private network. Nah.
It's a bad, partial solution for limited use cases.

AWS also has a managed solution for MariaDB, MySQL, Oracle, Postgres, and MS
SQL. DigitalOcean has an emoji shrug.

------
technotarek
This question could be much wider in scope than AWS, so I'm surprised we don't
have a wider variety of responses that touch upon everyday B2C ... bookstores
(vs the original Amazon), shoe stores (vs zappos), home services (vs Amazon's
task rabbit like service) etc. (Yes, I know this is hackernews!)

For my contribution, we're working on something where we expect AMZN to go far
deeper into in the not so distant future: furniture. We're "safe" now because
AMZN doesn't let you touch, feel and smell their offerings. That clearly could
change if they continue to expand their physical retail footprint.

AMZN's impact on us: TBD. We think they may disappoint a lot of consumers. We
focus on vintage and artisan furniture to cater to those that will want more
variety and character.

[https://attic.city](https://attic.city)

~~~
imhoguy
AMZN in IKEA space, that would be an interesting battle.

------
paladin314159
AWS launched mobile analytics a few years back:
[https://aws.amazon.com/mobileanalytics/](https://aws.amazon.com/mobileanalytics/).
I've literally never heard of a customer even considering it, despite the fact
that their free tier could accommodate 99% of companies. If you're not selling
a commodity, don't be too worried unless AWS considers it a core part of their
strategy.

------
neom
I worked as a strategy guy in the same space as AWS. In my opinion, you don't.
You look at what they are doing in the market, and you decide how you fit in
around them, there is typically a pretty decent business there, AWS is a great
for wake building, developer first is key. :)

------
jasonkester
When Amazon launched their Cloudwatch reports, I saw a definite downward trend
in S3stat signups, and even lost several customers since their thing
duplicated most of my functionality at the time.

It took a couple years to recover. Mostly through improving my product, but
also from people realizing that Cloudwatch is kinda a pain to use and doesn't
give the best reports.

Better still, Amazon never iterates on things, so their product today is the
same one they introduced half a dozen years ago.

S3stat is doing better than ever today.

~~~
tuananh
im getting NET::ERR_CERT_AUTHORITY_INVALID

NET::ERR_CERT_AUTHORITY_INVALID Subject: www.s3stat.com

------
movedx
I think most readers here would enjoy the book, "Small Giants"[0]. I also like
the concept of, "1,000 True Fans"[1]. I'm aiming for both my self, personally.

[0]: [http://www.smallgiantsbook.com/](http://www.smallgiantsbook.com/) [1]:
[http://kk.org/thetechnium/1000-true-
fans/](http://kk.org/thetechnium/1000-true-fans/)

------
gk1
I consult or have consulted multiple tech startups that suddenly found
themselves competing against an AWS service like CloudWatch, Glue, Sagemaker,
and so on.

In every one of those cases, nothing bad happened. Here's why:

\- These AWS products are more like single-purpose utilities than complete
solutions. They cover just the basic use cases. If your competing product is
also single-purpose then yes, you should be worried. But if you're selling a
platform, suite, or an enterprise product (like the companies I work with),
then you're probably fine.

\- These products are meant to plug into a developer's workflow, like one
piece of a larger puzzle. That means requiring technical expertise. If your
product is used by both practitioners and managers then you're fine.

\- AWS tools are for AWS users. Does your product support Google Cloud and/or
Azure?

\- AWS products are provided "as is." Most users will have little to no input
into the product roadmap and have little hope for getting their feature
requests fulfilled. As a (presumably) smaller company, your agility and
ability to implement customer feedback is an advantage.

There's more to say on this but the tl;dr is don't worry. For every utility
product AWS offers, there are dozens of alternative solutions that are
thriving.

Edit to clarify my statement and to reconcile with the other stories where
companies _were_ pushed out of the market by AWS: If you're selling
_infrastructure_ such as email servers, data storage of any kind, etc, then
yes you should be worried if AWS moves in. Doesn't mean AWS will win by
default (see: Snowflake vs Redshift), but the amount of resources Amazon puts
behind those things is significantly greater than their add-on solutions. With
that said, even a company the size of Amazon can't grab an entire market
immediately; there's plenty of business to be won by both sides if you play
things right... That's what makes it fun!

~~~
user5994461
To support your argument, cloudwatch is not a product.

It's just a bunch of API to retrieve AWS metrics. It is integrated into third
party products that do amazing things with it and other sources.

------
tyingq
Direct to China sales increased, without clear guidance to consumers on the
resulting decrease in shipping times and actual support. I can't tell yet the
market effect. That is, if end buyers like the lower prices enough to offset
the lower level of support, refunds, tech support, etc.

Chinese sellers actively avoid personalized support, refunds and compensation.
But they sell at much lower initial pricing. It's hard to tell, for now, what
the buyers value.

------
buremba
We have a product in analytics space and our target customer audience was
companies that want to develop an analytics solution on top of AWS. We're not
actually a direct competitor to AWS but it turns out to be that way.

At first, we thought that it's a win-win-win situation for AWS, AWS customers
to use our product and us because I know a lot of AWS customers who try to
build in-house solution on AWS and then switched to either third-party
solution or another cloud provider since they couldn't design the right system
for high data volume on AWS. It's mainly because data engineers are one of the
most expensive engineers and there're not enough sophisticated data engineers
in the market. We provided (this was the promise) the right (scalable, cheap
enough and flexible) solution from day 1 so that they don't have to build a
data engineering team.

It didn't work because AWS advertises its products as dead-easy to maintain
and easy to start working with. Let's take Redshift as an example; it's easy
to create a Redshift cluster with 3 clicks but that doesn't make you
experienced in distributed systems. Often the companies start using Redshift
and as their data grows the price gets expensive exponentially. They hire data
engineers at that point and try to switch to another solution or try to make
it scalable but switching to a completely different architecture (our
solution) is also not easy at this point because of switching costs.
Essentially our product became a competitor of AWS from customer's perspective
even though we're complementary.

Even though we have customers and a profitable company I don't think that we
could find the product market fit with that product so now we're pivoting to
something else and the new target is more niche.

------
amznsurvivor
Amazon entered our business (B2B) not too long ago. Not yet in our country,
but we were watching closely. They tried to go very large from the very
beginning while we had started from zero 8 years ago and still are a small
company.

We are still here, doing well and growing. Amazon just recently announced the
shutdown of their service.

Steady yet healthy growth and happy customers won‘t let them kill you
overnight.

~~~
movedx
I think you'd enjoy the book, "Small Gaints"

~~~
amznsurvivor
You are right, I think I would. Ordered it just now – not on Amazon ;)

~~~
movedx
Haha! Good call. I actually almost sent you an Amazon link to it but thought
that too ironic ;-)

------
exolymph
I don't have a personal story, but I wrote an article about AWS competing with
its own customers a while back: [https://www.inc.com/sonya-mann/aws-startups-
conflict.html](https://www.inc.com/sonya-mann/aws-startups-conflict.html)

...and I've heard rumors off-the-record that I wish I could share right now.
It's a serious concern for anyone making devtools.

------
ecesena
You should check out RedisLabs and read about their story. I'm not affiliated,
but I always thought it was amazing how successful they are given that AWS has
redis ElastiCache.

------
jdennaho
If you stay on your toes and keep growing they will buy you. Then they will
slowly chip away at it until they can delete it and replace it. CreateSpace vs
KindleDirect being a prime example.

------
rboyd
Does Amazon use tenant metrics in order to set product strategy (decide which
AWS customers to attack)?

------
biasforaction
I have mixed feelings when reading these stories. I believe that a lot of
competition and innovation is needed in our industry and whenever I see a
service throw in the towel because of AWS, I cant help but feel that my future
is threatened.

From my perspective, it's the smaller companies that pose the biggest threat
to AWS/Amazon because they are able to satisfy their customer's needs far
better and faster.

~~~
tjr225
I remember in the first decade of this century and everyone was afraid of Wal
Mart killing small business (and in some ways it did)- but now look at Wal-
Mart...

I don't like Amazon on a philosophical basis- the same reason I don't like
Wal-Mart, and Amazon is just the Wal-Mart of everything. Hopefully someone
comes to their senses and breaks up companies who are able to use profits from
various subsidiaries to undercut competitors in others.

