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Amazon Web Services: Doing for software what Gutenberg did for books?

Since its launch in 2012, the AWS Marketplace – the App Store to allow companies to easily download and run software on their AWS infrastructure – has been something of a closed book to companies outside the US. Any European (or further afield) company wishing to put its software and services on Amazon was required to have a US-based subsidiary.

“A larger British software company like Sophos has a massive operation in the US, so they've already registered they have a business entity in the US,” explains David McCann, VP of AWS Marketplace. “But a British company or a German software company that isn't in the US, I’ve had no way of keeping clean with the US government.

“We've been blocked until now on ‘how do I allow a German software company that doesn't operate in America to actually be on my marketplace?’”

This month, however, things changed. The company announced that it is opening Marketplace to Independent Software Vendors within Europe. European ISVs of any size will be able to choose which regions their software and services are available, giving them a potentially global reach and access to AWS’ one million customers.

“We've done all the engineering work to figure all those tax rules out, and it’s all done behind the scenes, so the software company doesn't have to do anything,” says McCann. “So they go on my portal now and they say ‘I want to register my German software company, I want to sell this product in Europe, and handle it for me’. And behind the scenes, we do all the registration.”

At launch the company is listing 14 European software companies that previously couldn’t have been featured on Marketplace, including German analytics provider Exasol, UK IT visualisation  startup Hyperglance, and File Sync and Share provider Pydio. Those 14, however, are just the start. “Now we're out talking to 500 European software companies.”

And McCann isn’t shy in emphasising the impact AWS is having on the European startup landscape. “One of the great things we're giving is an economic boost to Europe, because now that I can handle sellers from Europe I can instantly make their software available worldwide.

“There's a little British startup in Manchester called Matillion, a 17 man venture-backed startup, and the only way they sell its software is through Marketplace. If you ask the CEO, 90% of his customers are from the US.

“He's growing his business out of Manchester, and hiring more engineers in Manchester, all because it's running in our US region and landing big US customers. I’ve basically given export capabilities to a little company and they haven't got a single salesperson in the US.

“When I went to Germany last year, I gave the metaphor of the Gutenberg Printing Press. If you think about it, until about 1460, people used to write books and they were all priests and it was on parchment, and then Gutenberg comes along and prints books, and all of a sudden books explode. In a way Marketplace is doing for software what Gutenberg did for books.

“I'm really a publishing house, I publish software, and there are 20 million software developers in the world, and those software developers in the world can go to my library. This morning I had 2800 titles, and I'm adding about 20 new books a week.”

 

AWS coming to the UK

With regards to the UK leaving the European Union, McCann is nonplussed. “Whether or not Brexit happens, we made that decision [to build a UK data centre] a long time ago,” he says. “We do it because our customers want it, customer need is the biggest thing that drives Amazon. And Britain’s the fifth largest economy in the world, we have to be here.”

At this year’s AWS Summit, much of the talk was focused on how things were “Business as Usual” for all of Amazon’s operations in the UK, and specifically that the company’s plans to open a UK data centre were very much still on.

“We're going to move a region here, and that really matters, because every government is beginning to legislate about where data has to sit,” says McCann. “It gives the British customers complete control of data.

“British customers would love a region in the country for speed. Then they want it for data protection. And then for legislation and compliance reasons. All sorts of reasons. We do it because the customers want it, the biggest thing that drives Amazon is we always look at what the customer need is.”

 

No competition

When we spoke to Mark Russinovich, CTO of Microsoft Azure, he claimed that Azure is now on par with AWS. This month, Gartner’s latest Magic Quadrant says AWS not only has a more complete offering, but its cloud is ten times larger than the next 14 competitors combined.

But can AWS keep its lead? It might have the feature and price advantage for now, but how long can that last?

“One of the reasons I love being in software is, we're never done,” McCann retorts. “I’ve got a list of things today that could probably keep my team busy until 2025. I can't get them out the door quick enough. And I'm landing new customers every day. Every day they become a customer, they send me another idea.

“We don't pay any attention to Azure. All I care about is: What do British Gas want? What do Tesco want? If a customer wants something, and we can write it in code, we're going to build it. We are very much a culture of innovation. We're going to be innovating forever.”

McCann predicts the explosion of the Internet of Things – especially around the car, home, buildings, and especially the body – is a massive opportunities for software developers, which in turn means an opportunity for AWS and a whole host of new features.

“And in terms of price, we are always going to be reducing prices. The whole Jeff Bezos philosophy of Amazon is ‘give the customer the best experience at the lowest possible cost’, so we're constantly trying to innovate, to make things more affordable. And that philosophy hasn't changed for 20 years.”

 

Time to split?

However you cut it, the growth AWS has seen is phenomenal. The Amazon subsidiary likes to boast that it’s the fastest company to ever reach $10 billion in revenue, and Deutsche Bank recently claimed by next year AWS would carry a valuation of $160 billion – almost equal to its parent company. Surely there comes a point when the two have to split?

“Amazon is one company. AWS is a strong brand and a strong business of the Amazon company, but we are one company with a very strong culture, and there's nothing publicly we've said that we would want to change that.

“Now, what matters is that all parts of Amazon follow our principles. We focus on our customer, we innovate, and if we innovate and give a great customer experience, then we just continue to grow and succeed.”

 

Also Read:

Post-Brexit: Business as usual for Amazon in UK

InfoShot: If AWS was a separate company

Microsoft is done playing catch-up with AWS

AWS’s Vogels seeks IT pain relief as he builds the Everything Platform

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Dan Swinhoe

Dan is a journalist at CSO Online. Previously he was Senior Staff Writer at IDG Connect.

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