The more I learn about what Amazon Web Services (AWS) has done in the Cloud Computing arena, and the better I understand how Amazon’s efforts are dramatically leaving all competitors in the dust, the more impressed I am. Sometimes I can’t help but gush about how Amazon invented Infrastructure-as-a-Service (IaaS), and actually got it right.
You might conclude, therefore, that I’m a fan of Amazon, and you’d be right. Perhaps it’s all my years as an industry analyst covering emerging markets, but I love marketplace disruption. Gimme chaos over calm any day. But while such turmoil tends to be good for the disruptors (and their shareholders), it’s a very different story if you’re the one getting disrupted.
Ironically, given the breath of Amazon’s broader business, I can consider myself on the losing end of this equation as well. Case in point: how Amazon disrupted the used book marketplace. Before Amazon came along, if you wanted to shop for used books, you had to go to a used bookstore. And fundamentally, the reason used bookstores existed in the first place is that publishers refused to sell new books to any bookstore that also sold used books. As a result, the market contained (new) bookstores and used bookstores, but never the twain could meet.
Until Amazon, that is. Amazon is now such a dominant force in the book market that they basically told the publishers they were going to sell used books right alongside new ones, and if the publishers didn’t like it, they could take their business elsewhere. But of course, no publisher could afford to do so, so they — and the authors — just have to suck it up. As an author myself (check out The Agile Architecture Revolution), I don’t get a penny of royalties if you buy a used copy of my book from Amazon. I feel disrupted.
So, is Amazon good or evil? You be the judge. Clearly, disrupting markets is in a different category from, say, outsourcing manufacturing to Asian sweatshops, but tell that to the targets of such disruption. Excuse me while I go back to toiling over my keyboard for five cents per hour.