Amazon has joined the app-platform pack in reducing the cut it takes from smaller developers who use the Amazon Appstore to distribute apps. But it’s taking a slightly different approach, one that entices developers to use Amazon Web Services (AWS) for IT infrastructure and AI services.
From October, developers who earned less than $1 million in revenue in the previous calendar year from the Amazon Appstore will only need to pay Amazon 20% of the revenues they earn through its store.
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The new commission structure is part of the Amazon Appstore Small Business Accelerator Program and it follows similar reductions recently introduced by Apple and Google that are targeted at smaller developers.
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The cuts aren’t as big as Apple’s and Google’s. Google in March halved its 30% commission on in-app purchases for digital goods to 15% for developers earning up to $1 million per year from the Play Store. This matched Apple’s drop from 30% to 15% commissions for developers that earned $1 million a year from the App Store, which kicked off on January 1.
While Amazon’s reduction is smaller than Apple’s and Google’s, Amazon is playing to its strengths with developers who use AWS to host their computing infrastructure. Being the dominant cloud infrastructure provider, this could appeal to a lot of app developers.
“When the program launches, all qualifying small developers will receive an 80/20 revenue share by default. Additionally, we will provide AWS promotional credits in an amount equivalent to 10 percent of revenue, so that developers can take advantage of the benefits of building on the cloud,” writes Palanidaran Chidambaram, director of the Amazon Appstore.
“By helping small businesses get started with AWS through credits, we are making it easier for them to build and grow their app businesses. AWS gives developers easy access to a broad range of technologies so they can innovate faster and build nearly anything they can imagine.”
Amazon notes that “if an eligible developer’s revenue exceeds $1 million in the current year, they will revert to the standard royalty rate and no longer receive AWS credits for the rest of that year.”
But if the developer’s revenue dips below $1 million in a future year, they’re eligible for the discounts and credits in the next calendar year.
The credits apply to compute, storage, and databases as well as machine learning and artificial intelligence, data lakes and analytics, and Internet of Things.