
When Will AWS Move Up the Stack to Real Applications? - rokhayakebe
https://www.nextplatform.com/2017/02/03/will-aws-move-stack-real-applications/
======
crabasa
As a shareholder, hopefully never. Building infrastructure and platforms has
three wonderful benefits:

* Good customers, where good is defined as smart and willing to spend money. Going up the stack means dealing making sacrifices on both of those dimensions.

* Less complex products that stay relevant longer. Amazon builds legos and leaves the task of putting them together to others. The assembly can create value, but also adds complexity that becomes difficult to manage over time. S3 was launched in 2006 (!) and I'd bet will outlast high-order products like Box and Dropbox.

* Scale. Building apps means targeting smaller sets of customers. At Amazon's size, it's not clear what kind of application software would be a better use of their resources than simply continuing to solve platform problems.

~~~
iamacynic
i don't think i agree. i think they're moving up the chain to plug weaknesses
in their model.

1\. good customers - infrastructure customers are not good customers. they are
fickle and extremely price sensitive, which is tough to do on a super capital
intensive business like hosting, even on amazon cloud's insanely high cost.

2\. less complex products - i don't understand how there is there anything
about amazon's cloud that says "less complex" to you. have you ever used it?
it is automating thousands upon thousands of things you have to do by hand,
and it breaks sometimes.

3\. scale - every single application anyone has had success with is a sitting
duck.

i think amazon is the real new microsoft, with all of the anti-trust
implications that insinuates. google only delivers information, amazon
delivers nearly everything in the physical world (including hosting, the
ultimate "physical good" that nobody thinks is.).

good thing jeff bezos owns the washington post.

~~~
user5994461
> they are fickle and extremely price sensitive

Not at all. Most customers couldn't care less about money.

There are numerous people who are price sensitive, the amateurs who are
running a test app and complaining that digital ocean is cheaper, then move to
the weirdest hoster they could find because that's only $2 a month. These are
NOT AWS customers.

~~~
iamacynic
> _Not at all. Most customers couldn 't care less about money._

you're out of your mind.

customers at the high end care MORE about money, not less. the company
spending $1 million/month on AWS is desperately looking for ways out.
DESPERATELY. their entire business is being held hostage by amazon. jeff bezos
has them by the balls and is squeezing harder and harder by the day. they have
hired consultants to do the analysis, they have hired operations VPs to get
them out, but they are failing. they are failing, and shoveling even more
money to AWS every week, or their business goes dark.

they are doing this because one side of their business (doing stuff) is
outpacing their intelligence on the other side (paying for infrastructure to
do stuff). this is the genius of amazon. this is why they are successful.
amazon can arbitrage this opportunity better than anyone else currently.

how do i know? i compete with amazon and talk to customers on a weekly basis.
they are _desperate_. they woke up one day and are are now sending their
entire profit margin to jeff bezos. every single CFO is thinking about it. how
panicked are they?

you could cut their bill in half and they still wouldn't do it. they're
scared, like a deer in the headlights. they don't know what to do. what if
they make a wrong decision? ohhhhh my goddddddddd but... let's do nothing and
keep our jobs. that's the reality. meanwhile, s3 can go down for half a day,
and amazon doesn't even really have to acknowledge it. becuase what are the
customers going to do? MOVE? LOL! you might as well ask them to build a time
machine.

that is real. people live in that reality. sometimes against their will.
people care about costs, and try hard, and all of those nice things, but they
will soon be losers because jeff bezos is just BETTER at business than they
are. jeff bezos is literally being paid by the people he is about to put out
of business at the application level, and they're happy to pay him to do it.
it's amazing. it truly is.

here's the problem: more people know how to click a button on
console.aws.amazon.com than to migrate and operate an entire site. people
simply do not have the skills. they just don't. they don't know how the
internet actually works, but they're operating a business on the internet.
they're dumb. amazon capitalized on that, good for them.

maybe the era where needing to actually knowing how the internet works is
over. i don't know.

~~~
013a
I agree. This is definitely the impression I've gotten from people I've talked
to.

In an ideal world, how would they solve this? Is it to move back to self-
hosted infrastructure? Isn't that the same problem; they're just hostage to
their own employees and capex instead of Amazon?

~~~
user5994461
In the real world, you sell a product that is profitable enough to cover the
costs.

Do you think a company that sells t-shirt for less than the fabric cost will
live long? Nope.

Do you think a company can get equivalent service to AWS for much less money?
Nope.

Well, actually, yes, there is google cloud that's half the price.
[https://thehftguy.com/2016/11/18/google-cloud-
is-50-cheaper-...](https://thehftguy.com/2016/11/18/google-cloud-
is-50-cheaper-than-aws/)

------
nebabyte
The amount of denial in this thread is hilarious.

Any level at which profit is made, you can assume Amazon will reach. They
already have several large offerings at the application level, and there's no
reason for them not to build or acquire further applications.

You didn't think that "growth potential" of theirs' was going to stay in the
corner selling books, did you?

~~~
adventured
I agree. They've already done it over and over and over again with AWS. The
article is casting a premise that has never been the case: AWS has always been
in the real application business. Practically every expansion of AWS has
involved adding real applications. Even Prime storage is a 'real application,'
that sits on top of AWS, that competes in part with Dropbox and others.

All tech platforms devour the surrounding territory if they can. The last 40
years of tech history is littered with the corpses of formerly successful
niche products/companies/services that were wiped out by expansive platforms.

Just go down the list of AWS services:

CDN = real application

Database products = several real applications (just ask Oracle, who is spooked
by AWS)

DNS service = real application

Analytics = several real applications

Chime, Workdocs, WorkMail = real applications

Messaging = several real applications

And on it goes.

So what, they won't get into CRM? Of course they will. Amazon will use AWS to
push into high margin enterprise software, specifically designed to target
Oracle, Salesforce, et al. Because why not, the margins are there to be
attacked. Anything that AWS gets near is a target in the next decade.

------
hackerews
I think - somewhat controversially - that business/productivity apps will make
or break AWS. Assuming Google Cloud and Microsoft Azure can reach AWS feature
parity and prices, most everyone will likely move their infra to where their
apps are.

Two (of many) reasons:

1) Biz/productivity apps are _better_ when they connect directly to your
infrastructure (eg query and viz features between Google Sheets + BigQuery,
etc), and

2) Infrastructure is _better_ when already integrated into your biz apps (eg
Google Analytics auto push to BigQuery, etc).

More here:
[https://twitter.com/pavtalk/status/822539127568658436](https://twitter.com/pavtalk/status/822539127568658436)

~~~
jessaustin
That integration doesn't seem that hard... the reason we don't see more of it
may just be that it's not that valuable? You're never going to move all your
BigQuery data to a Google Sheet. You might very well move some transformation
of it, but that would be nearly as easy to do across IaaS vendors as within
one...

------
michaelbuckbee
I think Amazon QuickSight is probably a good example of the types of "real"
applications they'll be launching more of in the future.

Services slightly further up the stack that reinforce the value of their
infrastructure services. For example, I could see them launching a competitor
to ESP/Marketing automation services (reinforcing AWS SES).

~~~
reilly3000
Quicksight fell short for us in a number of ways. We ended up using Looker
with their app hosted on our AWS account. Amazon wins either way. That being
said, after this and equally disappointing WorkDocs it will be a while before
I look at their products as a first choice.

------
qeternity
Why would they want to? Levi Strauss didn't get rich prospecting. Let Amazon
sell the jeans and pick axes (both digitally and physically in their case) to
the modern day prospectors.

~~~
arkitaip
Because that's where 10x growth might be. For every company that uses directly
uses AWS, there are countless companies that don't get or need AWS directly
but really need a CMS, CRM, VOIP, groupware, Helpdesk, Callcenter, etc. If
anyone can build on top of Amazon's platform, it's Amazon.

~~~
qeternity
Sure, just as it was for the 49ers. Your keyword there is "might". But there's
a huge failure rate. It's the same statistics that VCs face. Amazon is in a
place to sell premium products to nearly 100% of the market, at really low
risk.

~~~
nebabyte
If Amazon had governed its growth by deciding just to stay at where it "is",
it'd still just be an online bookseller. And you'd be asking "why should they
move into digital services? They're in a unique position to sell books online
with low risk."

Amazon has the potential to distupt nearly any service it wants to. The "risk"
analysis and assessment is something they can handle - besides, the "riskier"
applications they can just bide their time on and see how/whether they pan out
for competition.

Anything Amazon can undercut by having a wider service available on its
platform, is just another bag of money they'd be leaving sitting on the table.
And Amazon doesn't leave money on the table.

~~~
qeternity
AWS was already low risk, since they started with idle platform capacity that
they needed to have for holiday shopping bursts. You're proving my point. They
go for very asymmetric return profiles. Selling books online is exactly the
same. Using expensive retail space to sell goods that have few good
substitutes between them is a really dumb proposition. The market for books
was well established, so that wasn't risky.

Don't get me wrong, it's brilliant thinking and opportunity seeking. But it is
not moonshot behavior.

~~~
maxwell
"Real applications" (someone named off CMS, CRM, VoIP, groupware, helpdesk,
and callcenter software above) hardly seem like moonshots.

~~~
tgjsrkghruksd
Right, it's not like Amazon doesn't have big spend on all of these things for
itself.

------
PaulHoule
Everybody wants what they don't have.

I was at an AWS Summit in NYC a few years ago and got the vibe that AMZN
wanted to attract an executive audience but that they got more of a technical
audience. I think for the kind of companies that are in NYC, technical people
are the real champions of AWS and they are in a position to decide to use new
AWS services.

Business-oriented talks were easy to get into, I avoided the "big data" kinds
of technical talks because the line would be too long.

The audience really didn't care when they announced Zocalo; the audience was
people looking for new services like the ones AWS already offers, not for new
applications or new versions of old applications.

Salesforce.com really owned the CRM system (application) and then got users to
write applications for their platform, then later got into IAAS. Amazon.com
has tried to go the other direction, but so far they haven't offered anything
all that special.

------
adrianratnapala
Isn't amazon.com a real application?

It seems to be working quite well for them. I'm not sure why they want to
write applications for other people.

~~~
nebabyte
Because if one works well, why stop there?

Amazon isn't some tech startup with only a few hackers to focus on supporting
their core product. They can easily maintain support for their core offerings
while building out/up.

As to why: why _not?_ In this day and age, why let anyone have a slice of
something you have the recources and reach to do far better and cheaper than
them?

~~~
brianmurphy
One reason: Focus.

Anybody who has tried to launch a SAAS app knows that launching the software
is not enough. The sales and support infrastructure has to be there as well.

I'm not saying they can't do it. They certainly have the money to throw at the
problem. The question is if they really want to.

~~~
reilly3000
They are practically offering support-as-a-service now. It's a clear segment
of their core business they are leveraging by creating services around it.
They are giving it the same focus and support as they do logistics, an area
where they are also an indisputable leader.

------
jarcoal
Haven't they already started with Chime?

[https://chime.aws/](https://chime.aws/)

EDIT: Looks like this article was written Feb 3rd, and Chime was announced 10
days later.

~~~
cherioo
And before that, they had WorkDoc and WorkMail. I think the line can be hard
to draw: is RDS application? What about RedShift? Quicksight? Echo?

~~~
simplehuman
WorkMail is DoA. Horrible product.

------
vinceguidry
Amazon.com isn't an application?

Less flippantly, why would Amazon want to expend more resources to make less
money? They can comfortably keep pushing _down_ the stack for a good long
time, swallowing up more and more *aaS segments until they're well bigger than
both Google and Apple.

That's what the world needs from Amazon. Not Yet Another Productivity Suite.
In the meantime they can do like Google, and disrupt segments where entrenched
business interests are getting in their way.

------
guimarin
I'm guessing they won't move very far up the stack for the time being. It
seems to me that once a process is able to be software-itized at least two
things happen. One it comes under that old adage that any computing
program/application can be done for half the resources/time every 18 months.
The second is that producer surplus (profit) that emerges from an information
asymmetry becomes consumer surplus when that asymmetry is able to be defined
in software. All supply side economies of scale seem to be disappearing and
what we're left with are companies that have a monopoly on some raw input or a
demand side economy of scale (network effect).

------
milesrout
Yeah they could build a shopping platform on top of it or something.

~~~
jeffbarr
I'll get on that right away. Great idea!

------
stonewhite
AWS created its partner network exactly for this.

They just supply their technology and consulting partners with building blocks
so they can do the tailoring.

The author apparently didn't do proper due diligence before typing down this
article.

~~~
michaelt
Amazon retail has a reputation for allowing marketplace sellers onto their
site then cloning things that sell well [1].

If they'll do it for their marketplace sellers, why shouldn't they do it with
their technology partners?

[1] [https://www.bloomberg.com/news/articles/2016-04-20/got-a-
hot...](https://www.bloomberg.com/news/articles/2016-04-20/got-a-hot-seller-
on-amazon-prepare-for-e-tailer-to-make-one-too)

~~~
user5994461
Buying a pair of shoes from another reseller doesn't make a difference.

It doesn't work for technologies. Changing systems is a huge cost and effort.

------
pjungwir
I have wondered this too. Oracle sells their database, but they also sell
ERP/CRM/other TLA applications built on top of it. Amazon could do the same
thing. And I think every batch of new AWS announcements they creep a little
further up and up. Their IoT platform seems like an almost-there example. It
is targeting just one vertical (sort of---it depends on how big IoT becomes I
guess), and it ties together other lower-level offerings. When I look at their
IoT product I think "I can combine those services myself." But of course that
is what programmers always think. :-)

~~~
jensvdh
Doesn't Amazon already "sell" DynamoDB?

~~~
BinaryIdiot
Yes but parent's point was they could _also_ sell something that works on top
of DynamoDB. For example a Salesforce clone (not saying that's a good example
just an example). Oracle sells their own DB as well as software that runs on
top of the very same database.

------
whack
> _" It would be interesting to see Amazon actually start producing algorithms
> and application software on behalf of customers, moving itself even further
> up the stack and deeper into IT departments."_

Sounds more like consulting than Amazon's current business model. Is
consulting really all that great a business, as compared to what Amazon is
currently doing? Writing personalised software offers extremely low
customers:engineering-effort ratios, as compared to infrastructure level
services which are more one-size-fits-all. I'm sure Amazon will make AWS more
and more high level, in an effort to attract customers who want high level
solutions as opposed to low level solutions. But I can't imagine Amazon going
full throttle into the consulting business.

~~~
PaulHoule
I think it is competition for "software product delivered as a service
providers", such as Salesforce.com, Basecamp, etc.

------
iainmerrick
This is a really weirdly-written post! I think it needs some serious editing
before it's worth reading. This sentence jumped out at me:

"This is natural enough for all IT suppliers, which triple their revenues when
they start going up the hockey stick curve, than then they double revenues for
a while, then it cools down to maybe 80 percent growth and then 50 percent
growth and then 25 percent growth and then the rate of change gradually slows
until it matches the overall rate of spending in the IT sector overall."

All the stuff between "triple their revenue" and "gradually slows" is
redundant waffle.

------
lj3
Do video games count? Because this company[0] has been offering cloud gaming
for a while now. If I'm not mistaken, some others here on HN have also tried
the same technique with video editing software with some success.

[0]: [https://parsec.tv/](https://parsec.tv/)

