Amazon Web Services move to enter the Web conferencing business highlights how the company is moving up the cloud services stack and aiming to somewhat nullify the competitive advantages of Microsoft, Google and IBM.
On Tuesday, AWS launched Chime, a unified communication service that’ll compete with Cisco’s WebEx, Microsoft’s Skype for Business and a host of other tools such as Go-To-Meeting. Chime has a free basic edition, a Plus Edition for $2.50 a month and a Pro Edition for $15 a month. Chime joins WorkDocs and WorkMail as long-tail productivity plays.
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The leading enterprise cloud services giant made its name–and landed key customers–via infrastructure as a service. AWS is Amazon’s most profitable business by far. However, infrastructure as a service is a commodity game and AWS has moved up the stack to offer more high value clouds.
As AWS has moved up, it has become competition for companies like Oracle (databases), Microsoft (active directory), Google and IBM (artificial intelligence and machine learning).
The catch here is that Google and Microsoft have a competitive advantage that AWS to date has lacked–productivity apps and software-as-a-service plays. Consider AWS’ playing field:
- Microsoft talks about Azure’s capabilities, but it’s highly likely that its commercial cloud revenue is dominated by Office 365. Companies buy Office 365 and likely bridge over to Azure. Active Directory is a gateway drug to Azure.
- Google took it’s sweet time combining its Google Cloud productivity footprint–Gmail, Apps, Drive etc.–but now has aligned it with its infrastructure stack. Like Microsoft, Google can use its productivity footprint to sell infrastructure cloud services.
- IBM Cloud can be lined up with its software-as-a-service portfolio and notably Watson.
- Oracle has infrastructure and platform cloud services, but we all know that’s just table stakes to sell you its ERP, database and data cloud products.
AWS has come from the other direction, but fits in with all those Clay Christensen innovation models. Company enters market with pricing and value products and eventually moves up the value chain to be a luxury brand. Think Toyota/Lexus and Honda/Acura over the decades.
From an art-of-war perspective, AWS’ Chime–and other productivity apps such as WorkMail–may also be about making Google and Microsoft defend their real cloud cash cows and taking their eyes off of infrastructure as a service. Google’s enterprise Gmail made Microsoft improve Office in the cloud and possibly lay off its search fascination a bit.
Here’s a look at where business productivity sits in the AWS universe.
Will front-end app approach for AWS pay off? Possibly, but it’ll take time. AWS is really looking for more tools to do bulk enterprise sales. Business productivity can help that cause. Keep in mind VMware once got into front-end productivity apps and retreated. In AWS’ case the business productivity play is merely part of a broader product portfolio plan. Chime, WorkDocs and WorkMail don’t have to be massive hits.
