One of the most notable events in the cloud world last week was that Rackspace tied the knot with Amazon Web Services (AWS) as a reseller of Amazon’s giant cloud services. Rackspace is by no means the first hosting provider to offer AWS services to its customers; it was preceded by other companies such as LogicWorks, DataPipe, and others.
Personally, I love Amazon’s innovations in online retail, and even in the cloud world. The things Amazon has put together with its magic retail formula of selection, price, and convenience are tremendous. I love Amazon Prime and a majority of the things I buy are purchased through Amazon. This is true for many people; Amazon has provided a good alternative for a lot of people that don’t have the time or patience to go to a traditional “big box” store. It’s simple, it’s easy, and you can find pretty much anything you want with just a few clicks. A few days later, your order is at your door.
This system is built on the economies of scale, with massive unseen delivery centers, massive distribution, and more. It is something that works fine for retail purposes and makes for an efficient customer experience. However, it’s a different story when it comes to hosting and the cloud. Amazon’s system and convenience comes at a price, and it doesn’t mesh with what customers will need in the long term from their IT infrastructure. The Amazon Cloud is the opposite of Amazon retail; it is the equivalent of the monolithic big box store that our society is starting to move away from in favor of a more customized experience.
This is only one of the reasons why Codero simply will not support AWS. This move simply doesn’t make sense on a number of levels, and the more you look at it, the less sense it makes for hosting providers in general.
At Codero, we hold true to our principles for the sake of ourselves and our customers. We will not support AWS. Here are some of the reasons why.
1. Winners and Losers
This partnership between a hosting provider focused on service helps Amazon far more than it does the hosting provider and, frankly, in the long term can only help Amazon. The Achilles’ heel of AWS is known throughout the industry: the support that (isn’t) provided to customers. Amazon just doesn’t want to offer it (yet). Support doesn’t fit with its culture and ethos, or in its massively leveraged piles of customers that are stacked on top of each other.
The losers in this arrangement are the hosting providers that choose to partner with AWS and, ultimately, its customers. There is no long-term benefit for hosters due to this growing de facto monopoly AWS has on IT infrastructure, and there will be short-term losses as well. The cloud is supposed to be about choice. As early pioneers, we all preached that. If the industry follows this track of supporting AWS, customers will continue to lose more and more choice and customization. These are choices that mean competitive prices, better technology options, and opportunities to find the match for what you need for your business. With AWS, it’s a one-size-fits-all proposition, and this arrangement is in direct contrast to Amazon’s original purpose: to present an alternative for customers. We feel enabling the AWS cloud by becoming a reseller to bridge the gap in AWS’s support offering can only help AWS in the long term.
Not to pick on one vendor, but let’s look at the most recent example of Rackspace. Rackspace said it hired hundreds of AWS “hosting experts” to prepare for this partnership. Here’s what Rackspace said in its press release:
That level of expertise places us in the top tier of managed service providers in the AWS ecosystem. We are also now part of the AWS Partner Network (APN) and we’ve completed the AWS Managed Service Provider audit, which is a third party audit meant to test for deep AWS knowledge in conjunction with the right capabilities to deliver cloud managed services.
This well crafted statement, begs one key question: When there is an AWS outage, such as what just happened with Dynamo DB, what will all these Rackspace experts actually do? There’s no way that Rackspace’s support staff will be better or more authoritative than what AWS has; after all, we’re talking about AWS’s environment here. Hosting providers and their customers are now at the mercy of AWS. Hosting providers that support AWS will now nothing but a middle man. If you’re not an expert on the platform you provide for your customers, you’re not a hosting company. If you want to be an AWS value added reseller, then be it. That’s fine, but that’s something that should be declared and known for all to see. The responsible thing to do is to not hide what you are.
3. Bad business decision for hosting providers
Amazon and AWS have exhibited a history of consuming the companies they “partner” with, and they routinely directly compete with their own clients. Amazon, quite simply, wants to own it all. It has sent the undeniable message to partners in the ecosystem and in the retail world that it will compete with them, kill them, and reap the spoils. What makes hosting companies like Rackspace, LogicWorks, or DataPipe any different?
Here’s a list of some of AWSs biggest customers that happen to find themselves in direct competition with Amazon, one day:
- Netflix competes with Amazon Prime Video.
- Spotify competes with Amazon Prime Music.
- Dropbox competes with Amazon’s Zocalo.
- BIgML competes with Amazon Machine Learning.
- io competes with Amazon Lambda.
- Samsung, LG, and other smartphone providers compete with Amazon’s Fire phone.
- Docker/Container companies Shippable, CircleCI, and Codeship compete with Amazon’s Code Pipeline
The list goes on.
Nobody knows what the ultimate AWS goal is here except for AWS, but history says it doesn’t look for companies that “partner” or build on AWS.
A simple look at its financials show that Amazon’s margin are razor thin, and they will even take a loss if they have to if it means more customers on the Amazon platform. The history is clear: “partner” or “build” on AWS and sooner or later you will fall victim to the AWS predator. No, thank you!
4. This will not help customers
Hosting providers that partner with Amazon position themselves as middlemen; this just doesn’t make sense competitively. Middlemen have to make a profit on top of the profit that the original supplier makes. This stacking of profits winds up hurting customers on price in the long term. Furthermore, since AWS in this model is a monopoly, what would prevent them from raising their prices at will? This is not a customer win anyway you slice it.
If a company has technical support needs with revenue on the line, it cannot possibly expect the support it needs from a middleman tech support crew running also on thin margins. It’s simply not a sound choice in terms of financials or support.
5. No rational hybrid answer
Hybrid IT infrastructure that spans dedicated and cloud technologies seamlessly is the future of IT. In the midst of a global move towards hybrid IT infrastructure, why did some hosting providers choose to support a cloud infrastructure that cannot offer hybrid hosting on demand? Welcome to the past!
6. AWS is a closed platform with no transparency
All of the work that the community (and namely Rackspace) has put into Open Stack and open sourcing its cloud platform is now at risk. AWS architecture is secretive and closed. Should this trend continue, the whole world will be at the mercy of AWS engineers for new features and fixes to problems. If Open Source has proven one thing, it’s that it has proven to be superior in terms of security, interoperability, and even scalability (albeit sometimes slower than in closed systems).
In a world where everyone supports an AWS that’s a virtual monopoly, hosting companies will no longer innovate. If everyone goes to AWS for hosting needs, this would rapidly spell the loss of industrial knowledge on how to innovate in a cloud hosting platform.
Providing an Alternative
Codero is focused on both small and enterprise business customers. We’ve empowered small start-up companies and worked with massive enterprises. Codero will not support AWS because the AWS business model is the antithesis of what we do and who we are.
While some may see Rackspace’s partnership with AWS as a strengthening of the AWS partner network and a patch to its infamous lack of customer support, it’s important to consider the above points. A secretive, closed platform and shrinking number of choices that fall under the AWS banner is not a pretty one for the IT industry. The world needs alternatives. Coke has Pepsi, Walmart has Target, and Netflix has Amazon Video.
Codero will strive to be the alternative to Amazon Web Services.