The Amazon IT Tsunami: The Prediction is Becoming Reality

Date posted: 3rd November 2015

Back on October 22nd Netfast IT Business Review analyzed Amazon Web Services’ aggressive roll-out of new features at the re:Invent conference and their effect on the macro IT economy. Netfast believes Amazon’s disruptive innovation in the marketplace will set off an IT tsunami that has already killed the value-added reseller (VAR) and has the potential to put the old-guard OEMs (OGOs) themselves on death watch.

As part of the conference Amazon announced a new feature Handmade by Amazon which is a platform built directly on top of the AWS cloud to market and sell handmade goods. This business which was added as a direct value-add to drive adoption rates and increase customer penetration of Amazon Web Services directly takes on Brooklyn based startup Etsy.

On October 22nd we said Etsy should fear Amazon Web Services…

Today it looks like we were right….

Etsy shares slipped 7% this afternoon following release of Q3 2015 earnings. This decline was following a net loss of $0.15 per share in the quarter with revenues of $65 million below the forecast. Etsy did say transactions were up across the marketplace but the impact of Handmade by Amazon appears to be in its early days of diluting selling attention away from Etsy’s business.

Upon announcement of Handmade by Amazon Web Services Etsy CEO Chad Dickerson quoted risk was low. “We believe that Etsy is the best platform for the creative entrepreneur,” he said. “Etsy has a decade of experience understanding the needs of artists and sellers and supporting them in ways that no other marketplace can.”

Following today’s earnings and the ongoing innovation coming out of Amazon Web Services it’s hard to see how their business will not continue to be effected by this “IT Tsunami”. Value-Added Resellers, Old-Guard OEMs, and now Etsy: disruptive innovation from Amazon Web Services is lining up victims in the new IT economy.

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Click the link below to read our original analysis from October 22nd. 

Anatomy of a Murder..How Amazon Web Services Killed HP Helion Public Cloud and Set Off an IT Tsunami

Data and quotes from: Etsy, Inc. Reports Third Quarter 2015 Financial Results