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Comment by nrmitchi | Hacker News Reader

> Amazon simply out-competes ElasticSearch with their own product when it comes to consultancy, services

You're kind of right about this, but it's the issue that AWS just has a massive head-start with any client that already uses AWS. They don't really out-compete, they just use their existing vendor lock-in to gain an advantage. And really, by using your dominance in one "market" to gain an advantage elsewhere ends up feeling like a bit of a grey area.

> To add insult to injury, Amazon made the mistake of leveraging the ElasticSearch brand a few times too many in ways that just rub the ElasticSearch people the wrong way.

You're phrasing this in a way like Amazon "leveraging the ElasticSearch brand" isn't a trademark issue. Is "leveraging the trademarks of another company" suddenly okay (as long as you don't do it 'a few times too many') as long as you're Amazon? What if Amazon started selling smart thermostats by "leveraging" the Nest brand?

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At my job, we evaluated moving from AWS hosted ES to several of the Elastic offerings. Many of them were more expensive than AWS was before taking hardware into account (as in comparing cost of Elastic licensing vs the whole cost from AWS). This made it exceedingly difficult to justify the move. It's not only the headstart with the client (billing relationship in place), but the cost that hampers them.

But isn't a big part of the reason Amazon can offer better pricing because of the scale of their existing client base? I'm not saying that they are doing this, but they could if they chose operate on very thin margins or even at a lost to keep their hold on clients and make up with it on other products in their ecosystem.

Hmm. Operating on thin margins to gain market share and drive competitors out of business, then making up the difference by creating sales in related businesses in their ecosystem doesn't sound much like Amazon...

In my experience it is that Elastic does not understand the market.

About four years ago we have attempted to get their software . It felt like I was dealing with Cisco sales people circa 1998. They were clueless on how to do a multi hundred thousand dollar deal - think slow, inefficient, inflexible, unwilling to compromise on extra $500 add on that would have ended up being a rounding error.

That's how it is for a lot of companies, not just Elastic. We have to deal with jfrog, who has separate billing teams for SaaS and on-prem so for us to switch from on-prem to SaaS is a pain in the ass. If AWS ever offers artifacts storage with more artifact types, then obviously we're switching. And that's just 100% so we don't have to deal with jfrog's dumb ass contracts anymore, never mind pricing.

ugh the pain that comes from negotiating our contract every year. Or the pain that comes from trying to get trial licenses. Or the pain we're seeing now from switching to SaaS.

And that's why AWS eats their lunch. Execs of Elastic ( and other companies ) should deal with their inept sales force rather than point fingers at AWS.

> You're kind of right about this, but it's the issue that AWS just has a massive head-start with any client that already uses AWS. They don't really out-compete, they just use their existing vendor lock-in to gain an advantage. And really, by using your dominance in one "market" to gain an advantage elsewhere ends up feeling like a bit of a grey area.

I'm not sure if it's actually a gray area, since I'm pretty sure leveraging your market dominance in one area to compete in another is illegal anti-competitive behavior. Isn't that what the whole Microsoft antitrust case was about? It's too bad the government pretty much gave up on enforcing antitrust law for 20 years, since it feels like similar practices became normalized due to lack of enforcement.

> leveraging your market dominance in one area to compete in another is illegal

Leveraging your monopoly to compete in another area is illegal. Leveraging a strong position isn’t and Amazon is a long ways from a monopoly.

That depends on jurisdiction.

In the EU, it is "dominant market position" (and explicitly so) that's the threshold for the Commission to take competition action, for instance.

would AWS be considered "dominant" though? they are the indisputably the market leader, but there's plenty of competition

(not trying to argue they aren't dominant. just curious)

I don't see why not.

British Airways only had a 38% market share when they were sued for abusing their dominant market position in 1998 (which was upheld by the Court of Justice in 2007)

Presumably they could. I mean, if the EU legislators had intended for a monopoly to be necessary to be considered “dominant”, then they could have written “monopoly”, couldn't they? They didn't write that, so it seems safe to presume they didn't intend that. And if anyone is dominant, then who, if not the market leader?

> Leveraging your monopoly to compete in another area is illegal. Leveraging a strong position isn’t and Amazon is a long ways from a monopoly.

That really depends on interpretation, which has shifted over time and continues to shift. IIRC, recent interpretations of some types of anti-competitive behavior have been rather literal and required something very close to a literal monopoly, which has had the effect of neutering antitrust law in all but the most blatant of cases.

My understanding is that it's arguable that it's anti-competitive to leverage market share advantages more broadly (e.g. antitrust law could be used to constrain/break-up a duopoly).

Amazon, Google, Microsoft is not a duopoly :)

And while there are probably some services on AWS you can’t find at a competitor - that’s mostly a choice (aka profit margin) made by the competitor.

The grey area here is more about what the "market" is defined as here. It's not entirely clear that the existing dominance that AWS has is different enough from "hosted search services" to be considered a different market (from an anti-trust point of view)

Yes, thats all this comes down to in the end.

Open source works fine, and does quite well as a business model (use it as free advertising).

What has happened here is a plain old case of monopoly.

Once markets are no longer efficient, the model breaks down. Amazon can use its resources to extinguish competition with their own product.

This is why we need antitrust law.

It's not a failure of capitalism, its not a failure of the businesses involved its just what happens when you run a freeish market. That is, things get out of whack to the point we the people feel it is unjust, it would eventually right itself but this would take a long time and likely do more interim damage than its work allowing, so we fiddle with it, hopefully not breaking anything in the process.

> its just what happens when you run a freeish market... it would eventually right itself but this would take a long time

If we think of the system as a delicate natural balance that we should try our best not to disturb too much I think we've immediately taken a very specific stance which itself shouldn't be above critical examination. It is, after all, just a social system and all social systems involve some level of design whether we like that fact or not.

In theory, we could conceive of the possibility of an economic system that both preserves the autonomy and independence of its actors while also preventing monopolies from emerging in the first place. Its a hard problem to wrestle with but its preferable to acquiescing to the blind faith in the invisible hand. We should never give up on an effort to understand how we could evolve our current systems into ones that work better (imagine if we took the same stance with technology).

I think there's a subtlety in the way Amazon as a company markets what they do and leverages the brand that's important here.

Take for instance Amazon RDS which is a family of managed relational database services. I don't think "Amazon RDS for MySQL" is an unfair use of the "MySQL" trademark, even if Amazon haven't asked Oracle's permission. The reason here is that it's much clearer in the way RDS is branded that it's not endorsed by the database engines it supports, it uses their trademarks to describe the engines they integrate with which seems reasonable in my view. Amazon RDS is still its own independent brand.

"Amazon Elasticsearch Service" crosses the mark in my opinion because it blurs the line between the two brands and in many ways implies that Amazon actually made Elasticsearch themselves.

>> Amazon simply out-competes ElasticSearch with their own product when it comes to consultancy, services

Can't client run his own Elasticsearch inside AWS? By installing and maintaining it yourself (or contracting someone to do it for you).

Then I don't see vendor lock-in sense: "We choose AWS to host us, now we have no real choice but to use Amazon Elasticsearch Service". Am I missing something here?

> They don't really out-compete, they just use their existing vendor lock-in to gain an advantage.

For the customer, the biggest advantage of AWS' SaaS offerings over a 3rd party's (hosted on AWS) is the billing. AWS Marketplace negates that. Maybe at some cost to the provider, but I just found ScyllaDB and RedisLabs there, so it must be working for some.

> but I just found ScyllaDB and RedisLabs there, so it must be working for some.

No, it doesn't work for RedisLabs. Amazon offers managed Redis called AWS EC Redis and recently someone I knew decided to move their entire Redis (multiple) clusters from RedisLabs to AWS EC. RedisLabs lost hundred of thousand dollars.

I would like to think there are other definitions for a successful business than it being a single vendor.

RedisLabs is probably the vendor that foot the bill for Redis software development end-to-end.

While I understand that some people viewed a successful OSS project is akin to Wordpress: lots of hosting providers, rich ecosystems, _and_ Wordpress main company is still making good money out of it; this is not apple to apple comparison (can't compare Redis and Wordpress).

Redis belongs to the group of MongoDB, ElasticSearch, etc.

They don't outcompete. AWS's ES is a steaming pile of crap and everyone I've ever met with a real usecase that needs ES on AWS rolls their own on their own EC2 instances.

I quake to think of how bad ES's own managed service must be if it still gets customers then. I don't know anyone that uses the services offered by ES so I can't ask directly.

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