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Summary:

Amazon Web Services has launched an app store that promises users one-click deployment of their favorite software programs and applications. While it’s a great move by AWS and likely good news for customers, the aptly named AWS Marketplace isn’t necessarily good news for everyone.

aws market

Amazon Web Services has launched an app store that promises users one-click deployment of their favorite software programs and applications. While it’s a great move by AWS and likely good news for customers, the aptly named AWS Marketplace isn’t necessarily good news for the myriad startups that host their PaaS and SaaS offerings atop AWS.

From Amazon’s perspective it’s easy to see why the marketplace idea was so appealing. Letting users launch fully configured versions of popular products in a single click is a compelling feature, especially for complex software that isn’t easily deployed in the cloud (or at all). For its software-vendor partners, AWS Marketplace represents an opportunity to do SaaS without having to build a SaaS business or infrastructure. Presently, the AWS Marketplace claims as options a variety of commercial and open source products, including 10gen, CA, Canonical, Couchbase, Check Point Software, Drupal, IBM,  MediaWiki, Microsoft, SAP, WordPress and Zend.

But the AWS Marketplace might be a double-edged sword for software vendors and, especially, companies offering services built atop AWS. Companies such as Acquia, BitNami and OpenLogic, for example, already exist and offer this preconfigured app experience using AWS for the infrastructure, and they’re part of the marketplace. Maybe they see the AWS Marketplace as just more exposure. That AWS handles the billing and other administrative work doesn’t hurt either.

Elsewhere, though, RightScale offers its own library of preconfigured software bundles and there are numerous database-as-a-service and other application- or stack-specific offerings available. RightScale’s efforts appear directly affected, while for the others it’s get on board with the AWS Marketplace or risk being buried. Their services might be more thorough — providing more than just infrastructure — and the specialization level might be higher, but competition is competition. Maybe they don’t want to play by AWS’s rules in hosting services in the marketplace.

I spoke recently with one cloud service provider that has moved off of AWS for just this reason. It sees AWS impeding on its space already, and poised to do so even more.

Of course, AWS has done this type of thing before and faced the same criticism, and hasn’t been affected too negatively. Whether it was a management interface or monitoring or a relational database service, someone in the AWS ecosystem is always hurt by AWS’s moves up the stack from its initial IaaS offering. Yet, AWS is still the cloud champion, and its broad swatch of features is part of the reason. And with the marketplace, there’s always the argument that AWS is only helping the little guy.

At this point, though, AWS is the 800-pound gorilla in the cloud space, and it can’t make a move without stepping on some toes and taking some criticism. If you want to hear more about where cloud computing is headed — and where AWS and its ecosystem might be headed next — attend our Structure Conference in June. Amazon CTO Werner Vogels will be speaking, as will dozens of other thought leaders working on the next big things.

  1. For AWS partners looking to sell in the Marketplace, I’d have thought the following is likely to be quite a concern;
    “For software delivered to customers as Amazon Machine Images (AMIs) and sold directly via the AWS Marketplace, AWS Marketplace collects software charges from the software buyer on behalf of the software vendor; 80% of the funds collected are dispersed to the software vendor and AWS Marketplace charges a service fee of 20%.”
    20% is quite a leap from the the precursor offering from AWS, DevPay, for which the charges from AWS were more like 3 or 4%. It’s certainly a hell of a premium for the priviledge of selling in AWS

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  2. Hi there, I am the BitNami CTO. Thanks for the write up. We do not feel threatened by this new Amazon offering, and we are quite happy to be one of their launch partners and be able to reach an even wider audience. Having said that, when you decide to build your business on top of a platform, be it Amazon, Facebook or iOS you need to always keep in mind the platform vendor. You raise pretty good points about how this is going to affect other companies, specially those building PaaS offerings. In general, the closest to ‘infrastructure’ that your offering looks like, the bigger the chances that you will find yourself competing with Amazon. When that happens, many vendors argue that is fantastic as it ‘validates the market’. Yeah, right, the same way Microsoft releasing Office validated the market for WordPerfect. That is basically why we decided to focus on the application layer, as it allows bigger maneuver room to benefit from Amazon’s growth without necessarily getting into its path and becoming roadkill.

    Forget PaaS. The next battlefield in cloud is going to be apps and the
    AWS marketplace is just the first cannon shot being fired :)

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