What’s Behind Amazon’s AWS Activate Offer?

Back on October 13, 2013, Amazon debuted its AWS Activate offer. This program includes promotional credits, developer support, training, coaching, and a special toolbox along with the usual community support offer. There are two tiers of service: “Self Starter” and “Portfolio Package”. The latter refers to early stage businesses working with a set of venture capital firms.

All of the above makes sense. But early stage ISVs can’t, enmasse, simply sign up for the AWS Activate offer. An application is required for one of the tiers offered — “Portfolio Package”. The other tier — Self Service — also requires an application and isn’t available to some current AWS customers.

So how does Amazon benefit from the program? Some of the information required to answer this question can be found in a blog post written by Werner Vogels, CTO of Amazon and published on the same day as the press release. The title of the post is AWS Activate – Supporting Startups on AWS. The post lists several successful businesses, including Pinterest, Spotify, Etsy, and Instagram. In the last paragraph of the post Vogels lists some other prominent businesses, not the least of which is Netflix, who are using precisely the same services as the ones offered in the AWS Activate service.

The real benefit to Amazon is, of course, the substantial usage charges the successful businesses listed on Vogel’s page pay for the use of the AWS services once they graduate from the program. Assuming the list of moderately successful businesses continuing to use, and pay for, AWS services post incubation stage is an order of magnitude greater than the handful of their enormously successful cousins, then it’s clear Amazon is benefiting substantially from the program. It may be safe to say most of the success of AWS, itself, as a profitable business unit within Amazon can be directly attributed to the kind of early support services and tools offered in this program.

At another level the AWS Activate service can be seen as Amazon’s effort to do its part to reduce the complexity of its IaaS and SaaS offer. Perhaps the approach they’ve taken with the AWS Activate service should serve as a model for competitors looking to make their own effort to ease the entry of new customers to their own Cloud offers.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

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