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Ask HN: What happened when Amazon moved into your business?

• jedberg 9y ago
  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 9y ago
    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 9y ago
      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 9y ago
        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 9y ago
          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 9y ago
            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.
          • paulcole 9y ago
            > My answer to that would be they offered more value than the trusted brand So much value that things went wrong and now you're explaining yourself.
        • singingfish 9y ago
          I figure the correct way is that you build for "the cloud" aka someone else's computer. This means that don't use their proprietary offerings to do so unless absolutely necessary.
          • scarface74 9y ago
            If you don't use their proprietary offerings, you lose most of the benefit of going to the cloud over being on prem. If all you're doing is hosting a bunch of VMs on the cloud, what's the point? Yes, be mindful as a developer I do take a few common sense steps... 1. ElastiCache uses the Memcached protocol so you're really not tying yourself to anything. 2. Lambda - think the "ports and adapters" pattern. Treat your Lambda function as a controller and keep all of your business logic separate. 3. Logging - all of our logging that goes to CloudWatch goes through Serilog. We can switch out the sink easily enough to anything. 4. Simple Queueing System - don't have calls to SQS all over your code, have it in one central module (in our case a Nuget package). 5. Autoscaling - have a shutdown method and wrap the calls that check when your instance is being shut down as events. 6. AWS KMS - We use Hashicorp's Vault and use AWS as a "backend". 7. Cognito - authentication. It's just Middleware for .Net Core that creates a principal before every request. It would be quite easy to add another piece of middleware.
      • scarface74 9y ago
        And if that unknown small company goes out of business, then what? I've been on both sides of that equation - the vendor and the client. When I was working for the vendor, the only way that we were able to secure our biggest deal was to put our entire software stack in escrow -both the proprietary development platform and the system we built for them on top of it. * As the client, part of the contract was that they had to put their code in escrow. In both cases, the client was large enough to negotiate those terms. What if you aren't large enough to force those terms? * That worked out well for me. When the company I worked for went belly up, the client that enforced those terms hired me to complete their system since they had the right to the source code and I was the only person on the planet that was available that knew how both the C based development platform and their implementation worked well enough to complete it.
    • lev99 9y ago
      I don't think it's just that. I have complete freedom to use any cloud solution in my organization, but I almost always choose AWS. Mostly it's a seal of basic quality. I know it had documentation, I know it has uptime, and I know it has packages for any environment I want to use it in. I've had mixed experiences with less established SaaS, and mixed experiences means more dev time on average.
      • akinjide 9y ago
        If the unknown company is offering everything you just listed, will the unknown company be considered?
        • PeterisP 9y ago
          An unknown company by definition is unable to offer what they just listed, namely, that they know and trust that all of that really is there at the quality they expect. It may claim these things and might actually have them, but any company or sysadmin must spend significant time, effort and thus cost to investigate and verify if that really is true, at least until they have established a solid reputation and aren't an unknown company anymore. And there should be some reason to spend this cost in reviewing and considering them if more established options are available; if other factors are equal, then the more widely used service is better for various reasons, so if they aren't promising some nontrivial improvement over AWS, why bother?
        • filleduchaos 9y ago
          If the company does offer all that, how are they still unknown?
        • lev99 9y ago
          No. The things I listed are reasons I am hesitant to work with a company I am unfamiliar with. To be considered you have to have everything listed, and be clearly better than AWS. Better shouldn't be defined as cheaper, but by a higher quality product. It's hard to define that without knowing exactly what service you provide.
        • 9y ago
• avar 9y ago
  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-hotel-booking-site-amazon-destinations/ https://techcrunch.com/2015/10/14/amazon-shuts-down-its-hote...
  • akinjide 9y ago
    Pretty sure they did a lot of market research before calling shutting down, most companies make decisions that's align with their goal/aim.
    • rapfaria 9y ago
      But what about the research before creating Amazon Destinations?
    • onychomys 9y ago
      Plenty of famous ones also don't, as evidenced by google's umpteen different messaging apps.
    • EpicEng 9y ago
      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.
  • Sholmesy 9y ago
    Similar situation with Amazon Tickets, they threw money at it, then abruptly stopped. I imagine they do this a lot in a lot of industries to see what sticks.
    • StudentStuff 9y ago
• aspir 9y ago
  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 9y ago
    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 9y ago
      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-api-definitions-for-66-of-the-amazon-web-services/ http://apievangelist.com/2017/01/05/what-i-learned-crafting-...
• wgerard 9y ago
  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 9y ago
    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.
• orliesaurus 9y ago
  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 9y ago
    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
• neom 9y ago
  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. :)
• gk1 9y ago
  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!
  • tech_man7 9y ago
    Have you checked out Golem? It's people/data centers selling their spare CPU cycles. https://golem.network/ https://golem.network/ Maybe they might be able to use your services. They'll be looking for software devs who will integrate their software onto their Golem platform.
    • dc_gregory 9y ago
      By "they" you mean "I" right? It's all you post about :/
• drspacemonkey 9y ago
  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.
• tlb 9y ago
  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-whole-foods-deal-future-of-instacart-grocery-delivery/#758d3a076d5a https://www.forbes.com/sites/bizcarson/2017/11/08/amazon-who...
• biasforaction 9y ago
  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 9y ago
    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.
• shakkhar 9y ago
  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 9y ago
    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.
    • user5994461 9y ago
      And the worst of both world. Work for a company that spent tens of millions on their own datacenters only to get neither half of the services nor half the quality.
    • eropple 9y ago
      It's all about who your TAM is. A good TAM will have your back from the jump. A bad one...not so much.
      • deleted 9y ago
        [deleted]
      • moreless 9y ago
        TAM == Total Addressable Market
• matte_black 9y ago
  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 9y ago
    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 9y ago
      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 9y ago
        > 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 9y ago
          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.
• paladin314159 9y ago
  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.
• technotarek 9y ago
  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
  • deleted 9y ago
    [deleted]
  • imhoguy 9y ago
    AMZN in IKEA space, that would be an interesting battle.
• jdennaho 9y ago
  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.
• tyingq 9y ago
  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.
• throwawaycl 9y ago
  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 9y ago
    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.
• rboyd 9y ago
  Does Amazon use tenant metrics in order to set product strategy (decide which AWS customers to attack)?
• exolymph 9y ago
  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.
• amznsurvivor 9y ago
  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 9y ago
    I think you'd enjoy the book, "Small Gaints"
    • amznsurvivor 9y ago
      You are right, I think I would. Ordered it just now – not on Amazon ;)
      • movedx 9y ago
        Haha! Good call. I actually almost sent you an Amazon link to it but thought that too ironic ;-)
• movedx 9y ago
  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/
• jasonkester 9y ago
  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 9y ago
    im getting NET::ERR_CERT_AUTHORITY_INVALID NET::ERR_CERT_AUTHORITY_INVALID Subject: www.s3stat.com
• buremba 9y ago
  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.
• ecesena 9y ago
  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.