On March 11, a Vice President at Amazon Web Services, Amazon’s cloud computing behemoth, published a blog post announcing the release of its own version of Elasticsearch, a powerful open-source software search engine tool.
Elastic is a public company founded in 2012 that is currently worth over $5 billion; the vast majority of its revenue is generated by selling subscription access to Elastic’s search capabilities via the cloud. It’s based in Amsterdam and employs more than 1,200 people.
In the blog post, Adrian Cockcroft, VP of cloud architecture strategy at Amazon Web Services (AWS), explained that the company felt forced to take action because Elastic was “changing the rules” on how its software code could be shared. Those changes, made in the run-up to Elastic’s 2018 IPO, started mixing intellectual property into Elastic’s overall line of software products.
Open-source software is defined as code that can be freely shared and modified by anyone. But now Elastic was telling customers that certain elements in its product mix could not be accessed without payment and that the code could not be freely shared.
Elastic did not explain its strategic shift at the time. But industry observers interpreted the changes as a response to increasing competition from AWS, which had incorporated Elasticsearch’s code and search functionality into its own suite of computing services.
Elastic isn’t the only open source cloud tool company currently looking over its shoulder at AWS. In 2018 alone, at least eight firms have made similar “rule changes” designed to ward off what they see as unfair competition from a company intent on cannibalizing their services.
In his blog post, Cockcroft argued that by making part of its product suite proprietary, Elastic was betraying the core principles of the open source community. “Customers must be able to trust that open source projects stay open,” Cockcroft wrote. “When important open source projects that AWS and our customers depend on begin restricting access, changing licensing terms, or intermingling open source and proprietary software, we will invest to sustain the open source project and community.”
AWS’s announcement did not attract the immediate attention of the Democratic presidential candidates or the growing cadre of antitrust activists who have recently set their sights on Amazon. But in the world of open source and free software, where picayune changes in arcane language can spark the internet equivalent of the Hundred Years War, the release of AWS’s Open Distro for Elasticsearch launched a heated debate.
Open source software has been one of the biggest success stories of the software industry. In 2018 alone, Microsoft’s purchase of the open source software development platform GitHub for $7.5 billion, Salesforce’s purchase of the open source company Mulesoft for $6.5 billion, and IBM’s blockbuster $34 billion purchase of the Linux vendor Red Hat proved that open source is a crucial part of the larger software industry. And there is growing acceptance that the collaborative model of developing open source software is a winning strategy to meet the tech industry’s need for constant innovation. So, when the likes of Amazon start accusing companies of not playing fair, people notice.
AWS is striking at the Achilles’ heel of open source: lifting the work of others, and renting access to it.
Sharone Zitzman, a respected commentator on open source software and the head of developer relations at AppsFlyer, an app development company, called Amazon’s move a “hostile takeover” of Elastic’s business. Steven O’Grady, co-founder of the software industry analyst firm RedMonk, cited it as an example of the “existential threat” that open source companies like Elastic believe a handful of cloud computing giants could pose. Shay Banon, founder and CEO of Elastic, carefully defended Elastic’s new licensing practices, while at the same time making his unhappiness with Amazon crystal clear.
Elastic’s products, Banon wrote, have been “redistributed and rebundled so many times I lost count… There was always a ‘reason’, at times masked with fake altruism or benevolence. None of these have lasted. [Amazon and other vendors] were built to serve their own needs, drive confusion, and splinter the community.”
(AWS declined to comment on the record for this story, and open source companies on the front lines of the confrontation refused to speak in detail about their relationship with Amazon, either providing generic statements or declining interviews.)
The reaction to Amazon’s move wasn’t all negative. Some veterans of the open source community praised Amazon’s defense of open source values, while pointing out the fundamentally messy contradictions of Elastic mixing commercial priorities with open source principles. And fundamentally, adopting open source code is entirely legal.
But the notion that Amazon was presenting itself as an altruistic defender of the digital public commons rankled community veterans like Zitzman, who says that Amazon has a poor reputation for working with the community. (GitHub data shows that Amazon has far fewer employees than Microsoft, Google, or IBM contributing code to open source projects.)
These critics see Amazon’s decision to recreate Elasticsearch as opportunistic . behavior. Amazon, they say, is leveraging its dominant power in cloud computing in order to unfairly reap intellectual property. In doing so, AWS is striking at the Achilles’ heel of open source: lifting the work of others, and renting access to it.
What happened to Elastic, Zitzman says, fits into a “long-standing trend of AWS rolling out managed services of popular open source technology, or replicating such technologies… This move is a text-book commoditization move — providing Elastic’s premium services for free.” Or as Salil Deshpande, a managing director at Bain Capital Ventures and an investor in multiple open source companies, puts it: “It is clear that AWS is using its market power to be anti-competitive.”
On the campaign trail, Senator Elizabeth Warren recently called for the breakup of Amazon, declaring that “you can be an umpire, or you can own a team, but you can’t do both at the same time.” She was referring to Amazon’s role as both an e-commerce platform and a vendor — a scheme that lets the company observe market trends and undercut sellers with in-house products at opportune moments. But Warren’s words might also describe Amazon’s behavior in the open source economy.
If Amazon uses the same ostensibly anticompetitive tactics in the cloud that have helped it establish a commanding position in e-commerce, regulators might want to start paying closer attention. A single company enjoying a dominant position in the cloud could, some critics suggest, result in less overall innovation in the most important part of our digital infrastructure. And that means that the future of antitrust may be up in the cloud.
“What’s happening to open source providers illustrates the raw power that Amazon has,” says Stacy Mitchell, a longtime critic of Amazon and co-director of the Institute for Local Self-Reliance, a nonprofit organization that specializes in challenging “concentrated economic and political power.”
“Amazon’s control of the core infrastructure for exchanging goods and data means they have the ability to set the rules for how everyone else operates,” Mitchell says. “We should recognize that as a kind of governing power.”