Intercept and monetize: AWS’s strip mining strategy
AWS is under growing scrutiny after a recent spate of bad press around its alleged abuse of the open source community.
While AWS hit back at claims that it steals ideas and code from open source projects, a recent New York Times article highlighted the struggles of open source software creators who fear that the cloud giant is unfairly hijacking and reselling their projects.
Shots fired. Michael Howard, CEO of MariaDB, first claimed that "AWS’s success is built on strip mining open source technology."
Howard elaborated that AWS is abusing the licenses and privileges of open source without giving back to the community. He also claimed that AWS pushes its own proprietary services instead of open source alternatives.
A growing list of casualties. Many other companies believe that AWS simply repackages open source software.
Elasticsearch, a wildly successful open source search engine developed by Elastic, offers a cautionary tale. AWS copied Elastic’s product in 2015 and sold it as a paid service, even though the original software was already available on Amazon.
Redis Labs, too, was flattened by the Amazon steamroller. Redis employees estimate that Amazon generates up to $1B a year from open source Redis technology. That’s at least 10 times more revenue than Redis makes with its own technology.
When AWS repackages open source software, it layers on proprietary technology that is then not shared with the community. That locks customers into Amazon’s cloud and funnels profits back to AWS.
Amazon’s strategy focuses on monetization interception—reselling freely available open source software with slight modifications before its original creators can effectively monetize their product.
Why does this matter for developers? Businesses and developers that depend on open source software face many challenges that impact everyone from freelancers to large VC-backed organizations.
First, an unhealthy relationship between developers and big tech stymies developer investment in open source. Developers become more wary of making their work open to the community or contributing to certain projects.
Second, open source licensing becomes more complex. Successful open source projects will likely modify their licenses to limit usage. That shift is already underway: MongoDB recently updated its license to require any company that manages its software to freely share the underlying technology.
No end in sight. Developers and big tech have both benefited from a rich and flourishing open source ecosystem. Who benefits more will likely remain a point of contention for the foreseeable future.
