Amazon directly competes with Netflix and they get along fine.

https://aws.amazon.com/solutions/case-studies/netflix/

I thought Netflix has slowly been moving stuff to their own data centers as they grow and has distanced themselves from AWS on more critical stuff?

Netflix still uses AWS for much of their support systems (billing, discovery, etc. etc.) The core business of delivering video is not on AWS and has never been. That runs on their in-house CDN, OpenConnect.

> and has never been

I believe this is inaccurate, Netflix was streaming from AWS in their early years IIRC.

I have worked at Netflix.

The history is that mainly they used well-known CDNs for streaming, followed by their OpenConnect CDN network now. AWS has always been used for metadata.

https://openconnect.netflix.com/en/

I'm not aware of them streaming from AWS, though it's possible a development group there did a test or something temporarily.

This seems unlikely - Netflix just finished their migration to AWS in 2016 after 7 years and has been quite public about it, and always has a major presence at re:invent, etc.

https://media.netflix.com/en/company-blog/completing-the-net...

They've never used AWS for their CDN.

> distanced themselves from AWS on more critical stuff?

Can someone familiar with Netflix speak to this?

It makes sense that they'll continue to run stuff in AWS due to their existing footprint, but are they mandated to build new stuff outside the cloud? And if so, why?

IIRC it is the other way around. They had much larger data centers but migrate more and more to AWS because of the stereotypical "on-premise vs cloud in large company"-reasons.

It’s not the same thing with Netflix. If five movies from Netflix originals did well this year then what Amazon prime can do about it? It’s not a charger cable that they can right away stock and start selling it :-).

The catalog of successful movies is available publicly anyway :-)

IMDB is also owned by Amazon.

I think it's a stretch to say they directly compete. Amazon's Prime service covers a tiny fraction of their catalogue. And everything else is a per-move/show rental or purchase fee. I technically have both because prime video is just included with the membership, but there's no way I would ever pay Amazon more money for Prime Video vs. something like Netflix.

A stretch? If prime isn't a direct competitor, then no one is. Competitors can have different pricing structures and still be competitors.

So GM and Avis are competitors?

This is what Amazon does. See Amazon Basics? Sellers sell on Amazon, Amazon tracks what sells well, enters market with same cheaper product and puts you out of business.

You are doing a large part of the market research for your competitors by using cloud services and platforms. You just pray they are good actors and ethical.

> See Amazon Basics? Sellers sell on Amazon, Amazon tracks what sells well, enters market with same cheaper product and puts you out of business.

Or they contract with you to sell a private label version of your own product.

For example, Ergotron makes a very nice quality monitor arm:

https://smile.amazon.com/dp/B00358RIRC/

Amazon Basics has a monitor arm that looks just like the Ergotron, except it's all black instead of silver and black.

https://smile.amazon.com/dp/B00MIBN16O/

I have a couple of the Amazon arms. The reason they look the same is because they are made by Ergotron. It says so right on the box:

Ship From: Ergotron Inc - Private Brands - US

Sure, they partner with you and force you to sell the same thing for less money, with less brand recognition.

All under the implied threat that if you don't partner with them, they will go to a competitor and push that product before yours.

I used to sell something like over 50% of all the HP LTO cleaning tape that got bought in the US through our FBA setup with amazon. The 3rd month in a row we grossed more than 80K in sales, guess who started stocking and selling LTO cleaning tape 'shipped from sold by Amazon'. Thankfully my HP oem pricing had them beat by a mile when it came to cost and we still did pretty well until the market fell out for the product.

Their entire business model at this point seems to charge other business for the right to figure out what a good business for them to get into it.

All retailers, that can, do this though.

Safeway, Fred Meyer, Costco, you name it there is a Select or some other generic offering of their competitor’s goods.

Except many of those stores haven't fostered distrust in their market place with fake products. I found myself buying Amazon basics because I felt like I could trust them in ways I couldn't trust anything else on the site.

Are you saying you got counterfeit Amazon Basics products? I'm pretty sure Amazon Basics items are only stocked and sold by Amazon and not any of their "marketplace" fronts so I don't see how you would have got fakes.

Amazon Basics is just like the grocery store brands that have become popular. They're basically rebranded products by a different company at a cheaper price with some level of quality endorsed by the retailer (Amazon, Costco, Kroger/Publix grocery stores, etc)

He's saying Amazon allows fake selling of product on their store which erases user's trust in other sellers.

Then Amazon comes up with Amazon Basics brand through which you only get genuine products.

And guess what is reinforced in users mind? That Amazon Basics is only true source of legit stuff rest all businesses selling on Amazon are fraudsters.

Who profits from allowing fake on their store? Amazon.

Amazon's problem with fake products means trust in non-Amazon sellers is lessened which gives the Amazon Basic products an advantage.

Like if I was to go to a brick and mortar store and there was a 10% chance that the brand name cereal I bought could be counterfeit but a 0% chance if I bought the store brand.

Interestingly, I think we saw (seeing?) a version of the same playbook being used at AWS - see the debacle around the AWS managed Elasticsearch service.

I don't think is the same case. AWS playbook will to abstract any customer operational cost into manage service ELK, MongoDB, Kafka, Redis, etc

I am sure there are hundreds of companies that were asking AWS to offer a fully managed Kafka service. I asked for it many times to my account manager when they where pitching Kinesis.

I worked at an major insurance company that was evaluating AWS. As soon as Amazon announced they would be getting into the insurance industry[1] the project was immediately terminated.

[1] https://www.insurancebusinessmag.com/us/news/technology/meas...

This is exactly the scenario I was thinking of.

This has been an issue for a while now. I worked at a retail analytics company that was entirely AWS hosted in 2012, and either Target or Walgreens didn't want us to use AWS because they viewed Amazon as a competitor, and didn't want to feed the beast.

This is also an issue at my current company, and I think a significant driver of the "cloud agnostic" push.

What is the relevance of funding your competitor? Amazon is so huge that the AWS fees you pay them are a drop in the ocean, and will have negligible effect on the (relatively tiny) unit of Amazon that's competing with you.

More concerning would probably be the possibility that your AWS service would be suspended or otherwise purposefully disrupted.

That's not an argument. People say the same thing about voting or polution, it adds up. Also, AWS is not a smart part of Amazon, AFAIK most of their profit comes from it. They sell products for cheap, so they can push competitors out to keep growing and then they balance the loss with AWS profits.

>>> Then Amazon enters your business space in direct competition to you. Through your business with AWS you are now funding a large, fierce, and direct competitor.

>> What is the relevance of funding your competitor?

> That's not an argument.

Sure it is. It's a great argument. Do you somehow think Amazon is limiting itself to copying businesses on the AWS platform only? No: they'll copy any successful business anywhere.

Unless your business is Netflix, you, by yourself, are not contributing enough to their bottom line to boost their efforts to compete with you. And guess what: Netflix doesn't believe that the money they're paying AWS is enough to hurt their competitiveness with Prime Video. The 10 VMs your company is going to run aren't going to matter.

Voting is not a good way to pursue your own self interest, which is the typical context of business decisions (bounded of course by morality and the law). From a standpoint of classical rationality, it only makes sense to vote insofar as you are pursuing collective goals, but what is the collective goal with regard to Amazon?

You can certainly object to Amazon business practices and take a principled stand against doing AWS business with them, but that's something you would presumably do whether or not they were competing with you.

This is called 'market cannibalization', when considered from the opposite perspective where amazon is competing with their customers. It's definitely considered bad for business, for precisely the reason that customers will look for other suppliers.

Having talked to some people at trade shows and tech conferences, there is absolutely that feeling from major retailers. Some people would like to use AWS but they are banned since it would directly fund their competitor (Amazon).

This is already happening to SaaS startups: https://www.inc.com/sonya-mann/aws-startups-conflict.html

I doubt any one company's use of AWS makes a bit of difference in their ability to keep the lights on. You "funding" them in some round about way is irrelevant.

I guess you're missing the point. It is not the money that matters more here, it is the collective business intelligence that Amazon gets access to, for free - for example, if one FBA seller leaves Amazon, no big deal. Even if a thousand FBA sellers leave Amazon, it is still no big deal for Amazon, because they have something more important than any money they could've earned from those FBA sellers - data. They did zero work (market research, advertising etc), but they know precisely what is selling well and where. If they keep doing this for a while (which they have), then they are in many more verticals in a few short years.

It is like these FBA sellers are paying Amazon, then giving valuable data to them and helping Amazon put them out of business. It is just a shitty situation

Just dropping this in, Amazon is about to purchase Sizmek which is a major player in online advertising - the main competitor to G's Doubleclick advertiser solutions.

So they'll get even more data on the marketing side.

I think you're just changing "the point" as I replied to this direct quote:

>Through your business with AWS you are now funding a large, fierce, and direct competitor.

No one here is talking about FBA's or the Amazon marketplace; they're talking about using AWS and having Amazon infiltrate your product space down the road.

FBA or AWS, I think the same argument holds - AWS and Amazon in general are so big, that they wouldn't care if a few hundred (or even a few thousand) smaller clients leave them. The data they lose matters more than the money.

That said, you are funding a fierce competitor, even if your AWS bill is just 10 bucks a month...

It's not the same though. If you jump in and start selling merch in Amazon then you are entering _their_ space directly and using their platform to do so. As you said, you're not only handing them money; you're handing them all of your data.

Using AWS to build your back end before finding out that Amazon is now going to enter your market is hardly the same thing. Your handful of VMs make exactly zero difference. AWS or no, Amazon was going to eat your lunch.

I remember TOMS didn't want to host anything on AWS because they considered Amazon a direct competitor when they bought Zappos. That was well over a decade ago.

This was the subtext at Google’s Next conference. Basically 9 of the top 10 retailers are moving to GCP. The last one is Amazon.

Moving away from AWS would be a symbolic gesture in this case, and may make you even less competitive.

Your business is not going to make any difference in Amazon's financial situation, but if you're saving money by using AWS's services, why would you spend even more money by porting to Azure or GCP?

If you did this it was likely the result of a valid cost/benefit analysis, yes? Let’s assume so - and that your cloud journey wasn’t just done to send your CTO to speak at a conference.

So if the savings in time to market/cost/whatever truly justified moving to AWS, does it matter that Amazon comes to town?

In other words, consider: if you did the analysis and saw the potential benefit but decided not to move to AWS due to the risk of feeding the beast, what happens when Amazon still enters your product space? You’re still gonna have to fight them, but you just gave up months or years of cost savings or product features or whatever other positive you identified that could’ve improved your position in the market.

>Through your business with AWS you are now funding a large, fierce, and direct competitor.

other than making you feel bad, is there any practical downside to this?

This is more or less Microsoft Azure's pitch.

It probably works the other way around. Amazon is incentivized to not compete with their customers because they’re already collecting rent on them thru AWS. Why drive your competitor out of business if they already pay you yearly fees?

And more directly to your point, Amazon presumably evaluates each market they enter separately. They have a big enough war chest to run at a loss forever, but they won’t do so because it’s not good business