Amazon Conquered the Cloud. Is It Flagging in Other Areas?

Thousands of businesses and developers rely on Amazon Web Services (AWS) for their cloud infrastructure and tooling. Amazon’s first-mover advantage in the on-demand cloud space has even allowed it to remain the market leader despite aggressive, well-monetized pushes from Oracle, Google, Microsoft, and others.

However tight its grip on the commercial cloud, however, Amazon lags its rivals in other key areas that will determine who dominates the tech industry in years ahead. Case in point: phones. After a disastrous initial foray into branded smartphones (the Fire Phone, launched in 2014, was a failure), the company abandoned any further attempts to develop an iPhone or Google Android smartphone competitor. It also launched a mobile app store (Appstore) that has yet to threaten (to put it mildly) either Apple’s App Store or Google Play, and which mostly seems to feed its small-but-steady share of the tablet market.

Perhaps Amazon’s leadership sees smartphones as a lost cause. After all, Apple swallows up the vast majority of the smartphone industry’s profits. And investing a lot of money in hardware and an ecosystem over the long term is no guarantee of success—Microsoft spent years trying to make Windows Phone a thing, only to unwind the whole project after it failed to gain much market share. Like Microsoft, Amazon might assume the best way forward is to produce apps and software that runs on other companies’ platforms, building an audience for its services with no risk of another embarrassing hardware implosion.

But the lack of phones creates a big problem for Amazon (as well as Microsoft), constricting the amount of data the company can collect about folks’ lives and routines. Google and Apple use the data from Android devices and iPhones to feed their respective artificial intelligence (A.I.) and machine learning initiatives, which in turn make their services and products “smarter” and more appealing to users.

Alexa

However, Amazon can still collect data about users via Alexa devices such as the Echo, which are scattered around millions of homes. These voice-activated assistants can perform a variety of tasks, and you can be sure that Amazon is using the data they collect to refine its services even more. At a Sept. 20 event in Seattle, the company revealed Alexa Hunches, which will use machine learning to predict user behavior and even suggest courses of action. For example, if you announce that you’re going to bed, and your house’s Alexa ecosystem senses that WiFi-enabled lightbulbs are still on, your Alexa device will ask you if you want the lights turned off.

Amazon clearly sees its future in the spread of Alexa, but it remains unclear how many third-party developers will actually jump onboard. Amazon allows anyone to build Alexa “skills,” but the lack of a screen on most devices (it is voice-activated, after all) limits the number of things that can actually be built. Some people may earn quite a bit creating trivia games, cooking routines, and the like; but it’s questionable whether voice-activated digital assistants can power a market as large as that for smartphone apps.

Lumberyard

A few years back, Amazon released Lumberyard, a game-development platform designed to rival Unity, Unreal, and other engines. It offers several key benefits to Amazon: in addition to attracting developer loyalty with a full suite of tools, there’s heavy integration with AWS, ensuring that any developer studio that signs onto Lumberyard is firmly attached to Amazon’s ecosystem.

There’s just one issue: Getting developers to sign up. Perhaps they’re staying away because Lumberyard is still very much a work in progress; its last major update, earlier this year, introduced 200 new features and retooled some core elements. In any case, the dominance of Unreal, Unity, and other engines doesn’t seem threatened for the time being.

Even if Lumberyard doesn’t succeed, Amazon leadership can at least take some comfort in the fact that the company owns Twitch, the massive game-streaming site that is currently one of the most important parts of the gaming ecosystem.

Ruling the Future?

Like any big tech company, Amazon has its successes and failures. Although it dominates the cloud, it lacks in other areas, and its value to developers who want to build new, interesting products—as opposed to just running their company on AWS, for which it offers a variety of tools—is relatively limited. That being said, Amazon certainly has the resources to make a more aggressive play for developers and tech pros in the years ahead, if it thinks there’s a serious buck in it.

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