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21st Century Share-Cropping – Cloud Software And The New Feudal Landlords That DAM Vendors Will Pay Rent To

by Ralph Windsor on February 4, 2014

Writing on his own AssertTrue blog, Kas Thomas (who I believe was once employed by ECM analysts, Real Story Group) has a critique of the monopolistic tendencies of Amazon in his article: Amazon: The Everything Company. The summary of the article is that Amazon give the impression of being a business that intends to compete with anyone and everyone and also that they have a pretty good set of surveillance tools to help them:

If you’re thinking about putting your company’s Web presence on Amazon’s computers (using EC2), you might want to ask yourself a few questions. Does Amazon already compete with your business in any way? How long before Amazon does compete with you? Do you want to put your online business in the hands of a potential competitor? Do you want Amazon to know more about your business than it already does? No one’s suggesting Amazon is actually going to spy on your business’s bits and bytes (which are already encrypted anyway, right?), but they can learn a lot simply by knowing your capacity needs, your business’s Web traffic patterns, your scale-out and failover strategies. Just by metering your Web usage, they know too much.” [Read More]

This is a theme that has been discussed by my co-contributors on DAM News before. The article has relevance to Digital Asset Management for many different reasons, not least of which is the number of vendors who are now effectively channel partners for Amazon Web Services (AWS).

As has been noted, Amazon offers some of the building blocks required to enable Cloud DAM solutions to be built fairly easily, including servers, storage, media transcoding and even workflow. Many of their own examples seem to directly use Digital Asset Management functionality as use cases, almost like they are an encouragement to anyone thinking about setting up a DAM software operation themselves.

Noting Kas’ remarks about Amazon’s monopolistic intentions, a cynical (but still plausible) theory might be that one motivation for Amazon offering these component facilities is as a kind of pay-for research facility. Anything which looks like it might go the distance, they then copy and undercut. This is not a new idea. Adobe used to employ similar tactics with Photoshop and compete with third party tool vendors by copying their features in new releases (and there are a number of similar examples elsewhere in the tech sector).

This kind of techno-feudalism where you have to pay rent to the Lord of the Manor for the right to share-crop on his land and hand over most of your harvest as well, has implications for innovation in DAM. It points towards more homogenised products since everyone is using the same core facilities. Vendors might become reluctant to invest in new functionality themselves – in case features get ripped off by the hosting company who then offer them to everyone else at half the price. The opportunities to differentiate your offer, therefore, are at least constrained and at worst killed off entirely.

Kas observes that customer service could be one area where Amazon are weak, but if the pricing is significantly cheaper, I’m not sure that is enough to persuade end users. Most would take the view that at least trying out the cheaper option would be worth doing first.

This is a complex issue to contend with and must be quite challenging for those SaaS DAM vendors that use Amazon services (and even those who are with competitors like Microsoft). The prospect of building many of the services they offer from scratch yourself, is both unappealing and expensive. However, you might be equally uncomfortable handing many acres of the farm over to that nice Mr Bezos and friends too.

An angle I have not yet seen widely discussed is the whole digital media supply chain concept as it applies to Amazon. A good proportion of products Amazon sell through their on-line retail outlets is digital media of one type or another (Kindle books, video, music etc). In addition, with their tablets and Kindle readers etc, a number of people will consume this media on devices Amazon sell. DAM systems are almost certainly used in the origination of many commercial media products now and their production role is increasing. If the source assets are held on Amazon controlled DAM systems and then combined into composite assets which are sold through their retail channels and viewed on their own devices, that provides them with a significant level of supply chain visibility (and therefore leverage) which some might view as a cause for concern.

Granted, at least some of this could be construed as tin-foil hat stuff, but as the various revelations about government security agencies (in the US and elsewhere) have revealed, if given the opportunity, a few people will at least consider how this potential advantage could be used to help further whatever cause they are interested in promoting. You cannot imagine this is limited to nation states exclusively.

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{ 1 comment… read it below or add one }

David Diamond February 4, 2014 at 7:01 pm

Tinfoil hats aside, I love Amazon as a consumer. I trust the brand to do right by me and I trust them to make good on correcting problems. I’ve personally seen evidence of both.

But this discussion is a very timely one. When Picturepark initially looked into providing a digital asset management Regional Cloud program for partners, we of course considered Amazon and Microsoft as hosting partners. Initially, we assumed there would be some price differences, technological differences, and perhaps some SLA differences too. Based on all that, we’d figure out who we’d choose.

What we did not expect was the concern we started hearing from partners and customers outside the US. It would appear that the NSA debacle and other related incidences have soured a number of companies on the idea of having their Cloud data under the control of one of these US-based giants. It was nothing “personal” against either company, but it was about those companies being under the jurisdiction of the US Government. Ultimately, we had to go with another hosting partner.

As an American, I hate that this conversation even takes place. But I do understand that there is a real concern over data privacy and that we can no longer say that data is absolutely safe within our borders. Perhaps it’s no worse off here than it is anywhere else; but until other governments cast the same shadow doubt that ours has, we remain at a disadvantage.

David Diamond
Director of Global Marketing
Picturepark DAM

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