Amazon AWS

AWS Marketplace & Ecosystems Network Effects Case Study

Amazon Web Services, while primarily a cloud infrastructure provider, also benefits from network effects via its ecosystem. AWS's cloud platform hosts a marketplace where third-party software vendors offer solutions that run on AWS. The massive customer base of AWS (millions of active clients) attracts more software and SaaS providers to integrate with AWS and list in its marketplace, which in turn makes AWS more valuable and "sticky" for customers who enjoy one-stop convenience. In essence, a rich ecosystem of partners and integrations forms a platform network effect around AWS: customers prefer the platform with the most tools and compatible services.

Likewise, the AWS Partner Network (consultants, integrators) grows because AWS is popular, and their services further reinforce AWS's dominance by making it easier for more customers to adopt AWS (The Funnel Framework - Stratechery by Ben Thompson). This mirrors what Microsoft achieved with its partner ecosystem. While cloud computing has several competitors, AWS's early lead and ecosystem network effects have helped it maintain a strong leadership position.