Amazon is the second largest retailer worldwide, so, naturally, other retail companies view them as a competitor. Yet, as retailers research new tech vendors, they discover many use Amazon Web Services (AWS) for cloud computing. Therein lies the dilemma: if retail companies choose a vendor built on AWS, are they indirectly enabling Amazon, their competitor?
This article disproves myths regarding AWS, explaining why using AWS may actually hurt Amazon more than help them.
Many companies object to AWS for fear Amazon (the retailer) could access their data and use it for insights or ad retargeting
AWS, in fact, ensures your data is protected from even Amazon itself. Here’s how:
AWS offers more encryption details here, but to summarize, Amazon cannot access or monetize any customer data stored with AWS.
Many tech solutions use AWS for a reason: to provide a top-tier offering. Simply put, AWS is the best cloud provider. Their system offers speed and compatibility that Azure, Google, and others can't provide. Such benefits include:
While Google Cloud, Azure, and others provide solid options, AWS is the industry leader. Automatically excluding vendors who use AWS could lead to selecting an inferior solution. And, ultimately, Amazon benefits if you choose the lesser option, as we touch on next.
Handing any money to Amazon (the company) feels like enabling a competitor, even if the money funnels through both a vendor and a subsidiary (AWS).
But, ironically, Amazon could actually benefit more from you choosing a vendor not on AWS.
To beat Amazon, you need to siphon traffic and customers away from them. You have to innovate, differentiate your product, and provide better user experiences. This involves using both the best tech and vendors out there.
If you’re debating cloud solutions in general, for example, building on AWS means you’re using the same cloud services as Amazon.com.
Rather than compete on commoditized features (cloud storage), you could use the best technology available (AWS) and save your efforts for building differentiating features to best Amazon the retailer.
This is especially true for vendors. Given scale economics and reserved instances, your vendor is likely securing good discounts from AWS already, so the amount you’re incrementally giving Amazon via this vendor is negligible. But if this solution is driving growth that is helping you compete with Amazon, this hurts Amazon much more than the incremental AWS fees will help.
For instance, imagine you’ve added a customer service chat bot to your site, powered by a third-party vendor who uses AWS. After launching it, sales increased by 1% thanks to real-time attention. What do you think Amazon would prefer: your AWS fees or your incremental sales?
Large Amazon competitors (and likely many of your competitors) use AWS. To name a few:
We understand your concern about tools built on AWS.
But it’s important to compete with Amazon where it counts: your retail platform. Even if using AWS technically helps Amazon’s bottom line in a circuitous way, what’s more important is front end innovation and driving revenue growth.
The best way to beat Amazon is to build a differentiated, innovative product. This may involve having to use vendors powered by AWS. While not ideal, the long-term benefits of more sales nonetheless hurts Amazon more than your AWS fees help them.
Sarah is an experienced writer with a software background, allowing her to translate between ad tech experts and lay readers. As Kevel's content writer, she writes for the blog and social media.