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The Tech That Will Invade Our Lives in 2020

The 2010s made one thing clear: Tech is everywhere in life.

Tech is in our homes with thermostats that heat up our residences before we walk through the door. It’s in our cars with safety features that warn us about vehicles in adjacent lanes. It’s on our television sets, where many of us are streaming shows and movies through apps. We even wear it on ourselves in the form of wristwatches that monitor our health.

In 2020 and the coming decade, these trends are likely to gather momentum. They will also be on display next week at CES, an enormous consumer electronics trade show in Las Vegas that typically serves as a window into the year’s hottest tech developments.

At the show, next-generation cellular technology known as 5G, which delivers data at mind-boggling speeds, is expected to take center stage as one of the most important topics. We are also likely to see the evolution of smart homes, with internet-connected appliances such as refrigerators, televisions and vacuum cleaners working more seamlessly together — and with less human interaction required.

“The biggest thing is connected everything,” said Carolina Milanesi, a technology analyst for the research firm Creative Strategies. “Anything in the home — we’ll have more cameras, more mics, more sensors.”

If some of this sounds the same as last year, it is — but that’s because new technologies often take time to mature.

Here’s what to watch in tech this year.

In the last few years, Amazon, Apple and Google have battled to become the center of our homes.

Their virtual assistants — Alexa, Google Assistant and Siri — respond to voice commands to play music from speakers, control light bulbs and activate robot vacuums. Smart home products work well, but they are complicated to set up, so most people use virtual assistants just for basic tasks like setting a kitchen timer and checking the weather.

Then in December, Amazon, Apple and Google came to what appeared to be a truce: They announced that they were working together on a standard to help make smart home products compatible with one another.

In other words, when you buy an internet-connected light bulb down the line that works with Alexa, it should also work with Siri and Google Assistant. This should help reduce confusion when shopping for home products and improve the ease with which connected gadgets work with one another.

Ms. Milanesi said that eliminating complexity was a necessary step for the tech giants to achieve their ultimate goal: seamless home automation without the need for people to tell the assistants what to do.

“You want the devices to talk to each other instead of me being the translator between these device interactions,” she said. “If I open my door, then the door can say to the lights that the door is open and therefore the lights need to turn on.”

If and when that happens, your home will truly — and finally — be smart.

In 2019, the wireless industry began shifting to 5G, a technology that can deliver data at such incredibly fast speeds that people will be able to download entire movies in a few seconds.

Yet the rollout of 5G was anticlimactic and uneven. Across the United States, carriers deployed 5G in just a few dozen cities. And only a handful of new smartphones last year worked with the new cellular technology.

In 2020, 5G will gain some momentum. Verizon said it expected half the nation to have access to 5G this year. AT&T, which offers two types of 5G — 5G Evolution, which is incrementally faster than 4G, and 5G Plus, which is the ultrafast version — said it expected 5G Plus to reach parts of 30 cities by early 2020.

Another sign that 5G is really taking hold? A broader set of devices will support the new wireless standard.

Samsung, for one, has begun including 5G support on some of its newer Galaxy devices. Apple, which declined to comment, is also expected to release its first 5G-compatible iPhones this year.

And 5G will be going to work behind the scenes, in ways that will emerge over time. One important benefit of the technology is its ability to greatly reduce latency, or the time it takes for devices to communicate with one another. That will be important for the compatibility of next-generation devices like robots, self-driving cars and drones.

For example, if your car has 5G and another car has 5G, the two cars can talk to each other, signaling to each other when they are braking and changing lanes. The elimination of the communications delay is crucial for cars to become autonomous.

It’s a time of intense competition in wearable computers, which is set to lead to more creativity and innovation.

For a long while, Apple has dominated wearables. In 2015, it released Apple Watch, a smart watch with a focus on health monitoring. In 2016, the company introduced AirPods, wireless earbuds that can be controlled with Siri.

Since then, many others have jumped in, including Xiaomi, Samsung and Huawei. Google recently acquired Fitbit, the fitness gadget maker, for $2.1 billion, in the hope of playing catch-up with Apple.

Computer chips are making their way into other electronic products like earphones, which means that companies are likely to introduce innovations in wearable accessories, said Frank Gillett, a technology analyst for Forrester. Two possibilities: earphones that monitor your health by pulling pulses from your ears, or earbuds that double as inexpensive hearing aids.

“That whole area of improving our hearing and hearing the way other people hear us is really interesting,” he said.

We have rushed headlong into the streaming era, and that will only continue.

In 2019, Netflix was the most-watched video service in the United States, with people spending an average of 23 minutes a day streaming its content, according to eMarketer, the research firm. In all, digital video made up about a quarter of the daily time spent on digital devices last year, which included time spent on apps and web browsers.

Netflix’s share of the overall time we spend watching video on devices will probably decline in 2020, according to eMarketer, because of the arrival of competing streaming services like Disney Plus, HBO Max and Apple TV Plus.

“Even though Americans are spending more time watching Netflix, people’s attention will become more divided as new streamers emerge,” Ross Benes, an analyst at eMarketer, said in a blog post.

So if you don’t like “The Mandalorian,” “The Morning Show” or “Watchmen,” you won’t change the channel. You will just switch to a different app.

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Prime Power: How Amazon Squeezes the Businesses Behind Its Store

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Credit…Andrea Chronopoulos

Twenty years ago, Amazon opened its storefront to anyone who wanted to sell something. Then it began demanding more out of them.


SEATTLE — For tens of millions of Americans, it is so routine that they don’t think twice.

They want something — a whisk, diapers, that dog toy — and they turn to Amazon. They type the product’s name into Amazon’s website or app, scan the first few options and click buy. In a day or two, the purchase appears on their doorstep.

Amazon has transformed the small miracle of each delivery into an expectation of modern life. No car, no shopping list — no planning — required.

But to make it all work, Amazon runs a machine that squeezes ever more money out of the hundreds of thousands of companies, from tiny start-ups to giant brands, that put the everything into Amazon’s Everything Store.

In more than 60 interviews, current and former Amazon employees, sellers, suppliers and consultants detailed how Amazon dictates the rules for those businesses, sometimes changing those rules with little warning. Many spoke on the condition of anonymity, for fear of retaliation by Amazon.

Amazon punishes the businesses if their items are available for even a penny less elsewhere. It pushes them to use the company’s warehouses. And it compels them to buy ads on the site to make sure people see their products.

All of that leaves the suppliers more dependent on Amazon, by far the nation’s top online retailer, and scrambling to deal with its whims. For many, Amazon eats into their profits, making it harder to develop new products. Some worry if they can even survive.

“Every year it’s been a ratchet tighter,” said Bernie Thompson, a top seller of computer accessories who Amazon has highlighted in its marketing to other merchants. “Now you are one event away from not functioning.”

Tumi, the luxury bag maker, sold its products at wholesale prices to Amazon for years. But executives said Amazon sometimes misjudged consumer demand, keeping too few bags in stock, and regularly demanded more in marketing and other fees. Last year, Tumi decided to sell its bags to another company, which then listed the items on Amazon. The arrangement gave Tumi more control over inventory and better sales data.

A few months later, Amazon gave Tumi an ultimatum: Stop selling through the middleman, or do not sell to the retailer’s 150 million customers at all.

“Some guy we had never talked to gave us a call and was like, ‘We have changed the rules,’ ” said Charlie Cole, who runs Tumi’s online business. He pushed back, but wasn’t successful.

“It was like talking to a brick wall,” he said. “They want to be able to control everything.”

Companies struggling to navigate Amazon’s growing chaos fill Facebook groups, private message boards and industry conferences. One session at a leading retail meeting next year is called “The Big Question: Is Selling on Amazon Worth the Hassle?” More than 12,000 people signed a petition on Change.org asking Amazon to alter an arcane rule on counterfeit products that they said could “destroy” an entire business.

Many sellers and brands on Amazon are desperate to depend less on the tech giant. But when they look for sales elsewhere online, they come up short. Last year, Americans bought more books, T-shirts and other products on Amazon than eBay, Walmart and its next seven largest online competitors combined, according to eMarketer, a research company.

“The secret of Amazon is we’re happy to help you be very successful,” said David Glick, a former Amazon vice president who left the company last year. “You just have to kiss the ring.”

Amazon says that its operation is so massive, the rules are necessary to give customers a quality experience. The company said the health of sellers was a top priority, and that it had invested billions of dollars to support them. It said that about 200,000 sellers surpassed $100,000 in sales in 2018, roughly a 40 percent increase from the year before.

“If sellers weren’t succeeding,” said Jeff Wilke, the chief executive of Amazon’s consumer business, “they wouldn’t be here.”

Jack Evans, a spokesman for the company, said that Amazon only succeeded when sellers succeed, “and claims to the contrary are wrong.” Merchants can choose the products they sell, how they are priced and how they fulfill the orders, he said.

The policy change that affected Tumi, Mr. Evans said, was to make sure that Amazon had the best prices and availability for popular products. He said that Tumi’s prices were high when it sold through the middleman.

Amazon has faced harsh criticism in the past for displacing Main Street brick-and-mortar retailers. Now, the diverging fortunes of Amazon and many of the companies selling products on its own site are at the heart of the antitrust scrutiny Amazon faces in Washington and Europe. Investigators at the Federal Trade Commission and the House Judiciary Committee are examining whether Amazon abuses its position as the central online connection between people making products and those buying them.

Amazon collects 27 cents of each dollar customers spend buying things its merchants sell, a 42 percent jump from five years ago, according to Instinet, a financial research firm. That does not include what companies pay to place ads on Amazon, a business that Wall Street considers as valuable as Nike.

The pennies add up. Last year, the profit from retail was so high that it surprised even some senior leaders close to the business, according to two of the people involved.

Thanks to the retail success, the company’s profit exceeded its own Wall Street projections by more than $3 billion.

Jeff Bezos, Amazon’s founder and chief executive, lumps the many parts of the company into two buckets, according to the two people close to the business. One bucket is investments, or bets on the future like Alexa, its virtual assistant. The other is contributors, or the profitable businesses that provide money for Amazon’s investments.

To him, the retail operation is a contributor that can be squeezed for cash.

Billions of dollars generated from selling products online go into investments like Alexa, which has 10,000 employees working on it, and the company’s expensive Hollywood productions. And still, Amazon’s consumer businesses, including Alexa and other pricey projects, produced $5 billion in operating profit last year.

The financial success stems from a big strategy shift that was underappreciated when Mr. Bezos made it two decades ago.

From the day the company started shipping orders in 1995, Amazon offered customers products the same way as traditional retailers like Target, buying them at wholesale and reselling them at a higher price. Four years later, Mr. Bezos and his team decided that Amazon would also let companies list items on the site for a cut of the sale, more like eBay and Alibaba. The change allowed Amazon to offer a wider variety of products.

“We want to try and build a place where people can come to find and discover anything that they might want to buy online,” Mr. Bezos said that year.

The decision eventually turned Amazon into the one-stop shop it’s known as today. Shoppers could find not only well-known brands like Tide detergent, but also obscure Christmas ornaments.

Initially, the move empowered sellers and gave them access to millions of customers. They could ship their products however they wanted. And they could set their own price.

Bit by bit, the sellers lost control.

When Amazon opened its doors to sellers, the fulfillment industry — for storing, packing and shipping online orders — was in its infancy. Many top sellers on Amazon ran their own warehouses.

Seeing a competitive advantage in offering faster delivery times, Amazon opened cavernous warehouses near major cities. Inside, workers navigated endless rows to pick products from bins and pack them into boxes.

The expansion left Amazon with extra space to fill, and the company turned to sellers. It pitched them on the idea of paying Amazon to store and ship their products, even those sold on other sites.

James Thomson, a Canadian with a doctorate in marketing, managed a team responsible for signing up sellers, leading them on tours of Amazon’s facilities near Reno, Nev., Phoenix and elsewhere. “Look how vast this is,” he recalled telling sellers. “Look at how we can easily absorb your 10,000 orders a month.”

“You do have a bigger warehouse than mine,” Mr. Thomson remembered them saying, “but I have good rates.”

Several years later, Amazon’s focus changed, and so did its pitch.

In early 2011, only a few million people were Prime members, paying $79 a year for unlimited two-day shipping. But Amazon knew those members spent far more on the site. Executives wanted more people to sign up for Prime, and they wanted to sell those customers even more stuff.

That year, Amazon began adding more perks to Prime. Most notable was unlimited video streaming of TV shows like “Mister Rogers’ Neighborhood” and movies like “The Girl With the Dragon Tattoo.”

As more people became members, products eligible for Prime shipping became more popular. Amazon reminded sellers that if they used the company’s warehouses, their items would be Prime eligible, too.

“That is what we were selling,” Mr. Thomson said.

It worked. The number of sellers using Amazon’s warehouses increased by 65 percent in 2013, according to a letter sent to investors. The company has since spent billions of dollars to continue building out its fulfillment network.

Mr. Bezos noted how intertwined sellers, warehouses and Prime had become in a note to investors in 2015. “At this point, I can’t really think about them separately,” he wrote.

Amazon has since flipped back and forth over whether outside sellers must use Amazon’s warehouses to sell Prime products. But for most types of goods, like pet supplies, cameras and baby gear, more than 85 percent of the top-selling items ship out of Amazon’s warehouses, according to Jungle Scout, which provides data to Amazon sellers.

Amazon handles packing and shipping for the most popular products sold on its site, even for products sold by outside sellers.

The 1,000 top-selling

products in each category

Orders sold and fulfilled

by outside sellers

Kitchen/dining

Pet supplies

Camera/photo

Beauty/personal care

Computers/accessories

Orders sold

and fulfilled

by Amazon

Orders fulfilled

by Amazon

for outside

sellers

Clothing, shoes/jewelry

Video games

Home/kitchen

Toys/games

Musical instruments

Cell phones/accessories

Tools/home improvement

Industrial/scientific

Patio, lawn/garden

Grocery/gourmet food

Sports/outdoors

Automotive

Arts, crafts/sewing

Health/household

Appliances

Electronics

Office products

Percentage of total

sales within each group

The 1,000 top-selling products in each category

Kitchen/dining

Pet supplies

Camera/photo

Beauty/personal care

Computers/accessories

Orders fulfilled

by Amazon

for outside

sellers

Orders

sold and

fulfilled

by outside

sellers

Orders sold

and fulfilled

by Amazon

Clothing, shoes/jewelry

Video games

Home/kitchen

Toys/games

Musical instruments

Cell phones/accessories

Tools/home improvement

Industrial/scientific

Patio, lawn/garden

Grocery/gourmet food

Sports/outdoors

Automotive

Arts, crafts/sewing

Health/household

Appliances

Electronics

Office products

Percentage of total sales within each group

Source: JungleScout

By Karl Russell

Amazon has surpassed DHL to become the largest provider of fulfillment and other logistics services in the world, according to The Journal of Commerce, a trade publication.

Many sellers say that the company charges fair rates to fulfill Amazon orders. But they say Amazon is charging them higher prices for other services. For example, because the warehouses operate near capacity, the company charges several times more than competitors to store items before they ship out.

The costs can be several times higher for sellers who use Amazon to ship orders made on other websites. Amazon charges $13.80 for one-day shipping on a T-shirt bought on a site other than Amazon, versus $3.68 when bought on Amazon.

In addition, Amazon had let sellers pay $1 to ship an order in a plain brown box without the company’s smile logo. But in 2016, the company said it would use only Amazon boxes. Sellers were told they could take their product back from Amazon’s warehouses if they wanted. “Return or disposal fees will apply,” it wrote to sellers.

Amazon says that its logistics services are optional and a great value. Sellers who choose to use it “enjoy high-quality fulfillment services that customers want,” the company told Congress’s investigators this year.

The company says it offers lower costs on Amazon orders because it makes other money from them, including commissions and advertising, that it does not get for sales made on other websites.

Shoppers on other sites turn away when products are not available in two days or less, said Karl Siebrecht, co-founder of Flexe, a start-up that connects retailers with a network of fulfillment centers.

“It’s new browser,” he said. “Amazon.com. Click. Buy. Done.”

This summer, Brandon Fishman, the founder of VitaCup, a start-up that infuses coffee with vitamins and nutrients, saw a promising opportunity.

Zulily, an e-commerce site that offers low prices in exchange for slower shipping, wanted to list VitaCup’s products 30 percent off for a short time. It was a chance for Mr. Fishman, whose 35-employee company gets the majority of its sales through Amazon and its own site, to reach new customers.

But Amazon’s software noticed the lower price and removed the bright “Buy Now” and “Add to Cart” buttons from its site. When those buttons are gone, shoppers get a bland text link that says, “Available from these sellers” and they must make more clicks to purchase an item. Those extra clicks are often the difference between success and failure for a seller.

Mr. Fishman’s Amazon sales tumbled, and he emailed Zulily to quickly take down the listing.

“I have told them about my rage many times,” Mr. Fishman said of Amazon. “It has not changed them.”

Amazon has pushed to keep prices low since the day it opened. That has become trickier as more sales came from outside sellers. According to antitrust law, each seller of goods should determine what to charge on its own. To avoid problems, an in-house lawyer is typically present when internal Amazon teams discuss pricing, according to two former employees.

In 2017, Amazon began reducing prices to match competitors; if the new price was lower than the one requested by the sellers, Amazon paid the difference. The company also alerted companies if their products were cheaper elsewhere.

Still concerned about news reports that prices on Amazon weren’t always the lowest, the company tried another approach, the one that hit VitaCup: removing the Buy Now and Add to Cart buttons when its software detected lower prices. When those buttons disappear, sales tumble as much as 75 percent, sellers say.

Executives at Amazon intended this as a tool to lower prices. The company has told Congress that the buttons amount to an endorsement, saying it only displays them on “offers that it is confident will present a great experience for its customers.”

But many brands raise their prices elsewhere to avoid losing the buttons. Or they decide to list their product only on Amazon. That is what happened to a health care supply company that worked with Jason Boyce, who advises online sellers.

“My client cut off Walmart — Walmart! — because it was hurting their Amazon business,” Mr. Boyce said. “If that’s not monopoly power, I don’t know what is.”

Amazon said in statement that sellers “have full control of their own prices both on and off Amazon,” and that the company helps them maximize sales by advising them how to earn the Buy Now and Add to Cart buttons.

The Zulily experience frustrated Mr. Fishman. But he boiled over after another move by Amazon.

One morning in June, Mr. Fishman opened his Amazon app and typed “VitaCup” into the search bar at the top of the screen. On the results page was an ad for Amazon’s own line of coffee.

He had been paying Amazon almost $200,000 a month for ads. Mr. Fishman posted a screenshot on LinkedIn and raged.

“I have a major problem with this!!!” he wrote.

For years, the question of whether Amazon should push ads on its site generated fierce debate among senior managers and executives inside the company, according to eight current and former Amazon employees. In memos and fiery meetings, they disagreed on what was best for a company that preached obsession with serving customers.

One camp believed that ads would erode customer trust, because shoppers expected Amazon to show them popular products with strong reviews and a good price.

The other camp saw ads as a cash machine Amazon could tap to drive down prices and fund new innovations for customers. The financial potential was obvious. When people shop online, they more often turn to Amazon than Google to start their search, according to multiple studies. And every brand wants to get in front of them.

Workers eventually got word that Mr. Bezos had settled the debate, according to two senior employees. Mr. Bezos said that Amazon had two options: Sell ads, and use the cash for investments. Or shun ads, and get beaten by competitors.

Ads soon appeared at critical locations, in particular on the page that pops up after a customer types a product into Amazon’s search bar. Some ads were rectangular blocks across the top of the page, and the top several products listed in the search results were ads disguised as a regular listing, aside from the word “Sponsored” in light gray. Combined, they have at times filled almost the entire first screen.

Mr. Wilke said the internal hesitation to ads was overcome by the results.

“It turned out they worked,” he said. “And by worked, I mean the ads help customers find what they’re looking for. And the reason we know that is cause they buy more stuff.”

But it added another cost for companies. Ranking high is essential to driving sales on the site. Competitors raced to place ads to ensure a prominent spot.

Out of antitrust concerns, company lawyers prohibit employees and advertising companies it works with from bragging that Amazon is where most people search for products online, according to two people who were warned about this.

Quartile, among the largest of a new breed of companies that help brands navigate Amazon advertising, tested the importance of the ads last year. It stopped running ads for 750 popular products. Immediately, sales shrank by 24 percent.

The effect then cascaded. That’s because the fewer recent sales a product has, including sales driven by ads, the lower it ranks on the site. At the end of 10 weeks, sales of the products without ads had tumbled 55 percent.

“It’s increasingly pay-to-play,” said Melissa Burdick, a 10-year Amazon veteran who now advises major consumer brands.

Amazon said its ads were optional and the majority of sellers built their businesses without them.

John Denny, who ran e-commerce for the drink company Bai, said brands used to believe that if they had a great product, it would show up in the search results, and sales would follow.

“Those days are over,” Mr. Denny said. “There are no lightning strikes on Amazon any more.”

A decade ago, Mr. Thompson, a former Microsoft software developer, recognized a big market for computer accessories like computer docking stations and cables. He started Plugable and betted big that depending on Amazon would turn his idea into a business.

It worked. In 2016, Mr. Bezos highlighted Mr. Thompson when talking about the success of sellers in his annual letter to investors. Amazon posted a video about Plugable on its website to attract new sellers.

“He has a history of good performance metrics, and an absence of things like safety and authenticity complaints,” Chris McCabe, a former Amazon fraud investigator, said in an interview.

But in the last couple of years, as rules shifted and his profit shrank, Mr. Thompson began warning people that working with Amazon had become increasingly difficult.

He took his concerns to Amazon this summer, giving a 20-slide presentation to a senior executive at the company’s Seattle headquarters. On slide No. 6, Mr. Thompson laid out his nightmare: Amazon cutting off sales of his best seller, a laptop docking station that is frequently one of the 100 most popular electronics products on the site.

His plea to the executive was simple. “No surprises,” he said.

He got surprised.

One Sunday in July, he got an email saying that Amazon had removed the docking stations. Amazon said it was because of complaints that Plugable’s products had not matched the condition described on the site.

Other docking stations, including one made by Amazon, filled the void online.

Mr. Thompson scrambled, contacting two high-level managers he knew and his account manager, who Amazon charges him $5,000 a month to have. None of them could fix it.

He and other staff members dug through customer feedback and returns. They found only outstanding reviews, said Gary Zeller, one of Mr. Thompson’s deputies.

“There was nothing borderline about it,” Mr. Zeller said.

After four days and at least $100,000 in lost sales, the listing went back up. Mr. Thompson said he still did not understand what ignited the problem.

Amazon declined to comment on Plugable. Mr. Wilke said that the company’s future depended on policing the site without harming well-meaning merchants.

“We have a strong incentive to be as accurate as possible in identifying bad actors, make very few mistakes when we’re wrong, on giving second chances to people who make an honest mistake,” he said.

Mr. Thompson is now looking for new ways to make money. But Amazon accounts for roughly 90 percent of electronics sales online, according to market research. His business at Walmart and eBay, the next largest online retailers, are less than 5 percent of his revenue.

In September, Plugable hired two people to sell directly to corporations.

“We really built the company on Amazon,” Mr. Thompson said. “We have no regrets about doing that. But today our focus has to be getting diversification off Amazon.”

He said he understood what he was up against.

“We are dealing with a partner,” he said, “who can and will disrupt us for unpredictable reasons at any time.”

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Prime Leverage: How Amazon Wields Power in the Technology World

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Credit…Nolan Pelletier

Software start-ups have a phrase for what Amazon is doing to them: ‘strip-mining’ them of their innovations.


SEATTLE — Elastic, a software start-up in Amsterdam, was rapidly building its business and had grown to 100 employees. Then Amazon came along.

In October 2015, Amazon’s cloud computing arm announced it was copying Elastic’s free software tool, which people use to search and analyze data, and would sell it as a paid service. Amazon went ahead even though Elastic’s product, called Elasticsearch, was already available on Amazon.

Within a year, Amazon was generating more money from what Elastic had built than the start-up, by making it easy for people to use the tool with its other offerings. So Elastic added premium features last year and limited what companies like Amazon could do with them. Amazon duplicated many of those features anyway and provided them free.

In September, Elastic fired back. It sued Amazon in federal court in California for violating its trademark because Amazon had called its product by the exact same name: Elasticsearch. Amazon “misleads consumers,” the start-up said in its complaint. Amazon denied it had done anything wrong. The case is pending.

Not since the mid-1990s, when Microsoft dominated the personal computer industry with Windows, has a technology platform instilled such fear in competitors as Amazon is now doing with its cloud computing arm. Its feud with Elastic illustrates how it brandishes power in that technical world.

While cloud computing may appear obscure and geeky, it underlies much of the internet. It has grown into one of the technology industry’s largest and most lucrative businesses, offering computing power and software to companies. And Amazon is its single-biggest provider.

Amazon has used its cloud computing arm — called Amazon Web Services, or A.W.S. for short — to copy and integrate software that other tech companies pioneered. It has given an edge to its own services by making them more convenient to use, burying rival offerings and bundling discounts to make its products less expensive. The moves drive customers toward Amazon while those responsible for the software may not see a cent.

Even so, smaller rivals say they have little choice but to work with Amazon. Given the company’s broad reach with customers, start-ups often agree to its restrictions on promoting their own products and voluntarily share client and product information with it. For the privilege of selling through A.W.S., the start-ups pay a cut of their sales back to Amazon.

Some of the companies have a phrase for what Amazon is doing: strip-mining software. By lifting other people’s innovations, trying to poach their engineers and profiting off what they made, Amazon is choking off the growth of would-be competitors and forcing them to reorient how they do business, the companies said.

All of this has fueled scrutiny of Amazon and whether it is abusing its market dominance and engaging in anticompetitive behavior. The company’s tactics have led several rivals to discuss bringing antitrust complaints against it. And regulators and lawmakers are examining its clout in the industry.

“People are afraid that Amazon’s ambitions are endless,” said Matthew Prince, chief executive of Cloudflare, an A.W.S. competitor that protects websites from attacks.

A.W.S. is just one prong of Amazon’s push to dominate large swaths of American industry. The company has transformed retailing, logistics, book publishing and Hollywood. It is rethinking how people buy prescription drugs, purchase real estate and build surveillance for their homes and cities.

But what Amazon is doing through A.W.S. is arguably more consequential. The company is the unquestioned market leader — triple the size of its nearest competitor, Microsoft — in the seismic shift to cloud computing. Millions of people unknowingly interact with A.W.S. every day when they stream movies on Netflix or store photos on Apple’s iCloud, services that run off Amazon’s machines.

Jeff Bezos, Amazon’s chief executive, once called A.W.S. an idea “no one asked for.” The service began in the early 2000s when the retailer struggled to assemble computer systems to start new projects and features. Once it built a common computer infrastructure, Amazon realized other companies needed similar capabilities.

Now companies like Airbnb and General Electric essentially rent computing from Amazon — otherwise known as using the “cloud” — instead of buying and running their own systems. Businesses can then store their information on Amazon machines, pluck data from them and analyze it.

For Amazon itself, A.W.S. has become crucial. The division generated $25 billion in sales last year — roughly the size of Starbucks — and is Amazon’s most profitable business. Those profits enable the company to plow money into many other industries.

In a statement, Amazon said the idea that it was strip-mining software was “silly and off-base.” It said it had contributed significantly to the software industry and that it acted in the best interest of customers.

Some tech companies said they had found more customers through A.W.S.; even some companies that have tangled with Amazon have grown. Elastic, for instance, went public last year and now has 1,600 employees.

But in interviews with more than 40 current and former Amazon employees and those of rivals, many said the costs of what the company was doing with A.W.S. were hidden. They said it was hard to measure how much business they had lost to Amazon, or how the threat of Amazon had turned off would-be investors. Many spoke on the condition of anonymity for fear of angering the company.

In February, seven software chief executives met in Silicon Valley and discussed bringing an antitrust lawsuit against the giant, said four people with knowledge of the gathering. Their grievances echoed a complaint by vendors who use Amazon’s shopping site: Once Amazon becomes a direct competitor, it is no longer a neutral party.

The C.E.O.s did not press forward with a legal action, partly out of concern that the process would take too long, the people said.

Now regulators are approaching some of Amazon’s software rivals. The House Judiciary Committee, which is investigating the big tech companies, asked Amazon in a September letter about A.W.S.’s practices. The Federal Trade Commission, which is also investigating Amazon, has questioned A.W.S. competitors, according to officials at two software companies who were called in but were not authorized to discuss the matter.

What Amazon is doing to software start-ups is unsustainable, said Salil Deshpande, founder of Uncorrelated, a venture capital firm.

“It has intercepted their monetization, it has forcibly wrestled control of software from their owners and it has siphoned customers to its own proprietary services,” he said.

When Amazon Web Services began last decade, Amazon was struggling to turn a consistent profit. A service to provide computing power seemed like a distraction.

Yet start-ups embraced A.W.S. They saved money because they did not need to buy their own computing equipment, while spending only on what they used. Soon more companies flocked to Amazon for computing infrastructure and, eventually, the software that ran on its machines.

In 2009, Amazon established a template for accelerating A.W.S.’s growth. That year, it introduced a service for managing a database, which is critical software to help companies organize information.

The A.W.S. database service, an instant hit with customers, did not run software that Amazon created. Instead, the company plucked from a freely shared option known as open source.

Open-source software has few parallels in business. It is akin to a coffee shop giving away coffee on the hopes that people spend on milk or sugar or pastries.

But open source is a tried and true model nurtured by the software industry to get technology to customers quickly. A community of enthusiasts often springs up around the shareable technology, contributing improvements and spreading the word about its benefits. Traditionally, open-source companies later earn money for customer support or from paid add-ons.

Technologists initially paid little attention to what Amazon had done with database software. Then in 2015, Amazon repeated the maneuver by copying Elasticsearch and offering its competing service.

This time, heads turned.

“There was a company that built a business around an open-source product that people like using and, suddenly, they have a competitor using their own stuff against them,” said Todd Persen, who started a non-open-source software company this year so there was “zero chance” that Amazon could lift his creations. His previous start-up, InfluxDB, was open source.

Again and again, the open-source software industry became a well that Amazon turned to. When it copied and integrated that software into A.W.S., it didn’t need permission or have to pay the start-ups for their work, creating a deterrent for people to innovate.

That left little recourse for many of these companies, which could not suddenly start charging money for what was free software. Some instead changed the rules around how their wares could be used, restricting Amazon and others who want to turn what they have created into a paid service.

Amazon has worked around some of their changes.

When Elastic, now based in Silicon Valley, shifted the rules for its software last year, Amazon said in a blog post that open-source software companies were “muddying the waters” by limiting access to certain users.

Shay Banon, Elastic’s chief executive, wrote at the time that Amazon’s actions were “masked with fake altruism.” Elastic declined to make Mr. Banon available for an interview.

Last year, MongoDB, a popular technology for organizing data in documents, also announced that it would require any company that manages its software as a web service to freely share the underlying technology. The move was widely viewed as a hedge against A.W.S., which does not openly share its technology for creating new services.

A.W.S. soon introduced its own technology with the look and feel of MongoDB’s older software, which did not fall under the new requirements.

That experience was top of mind this year when Dev Ittycheria, MongoDB’s chief executive, attended the dinner with the heads of six other software companies. Their conversation, held at the home of a Silicon Valley venture capitalist, shifted to something drastic: whether to publicly accuse Amazon of behaving like a monopoly.

At the meal, which included the heads of the software firms Confluent and Snowflake, some of the C.E.O.s said they faced an uneven playing field, according to the people with knowledge of the gathering. No complaint has materialized.

“A.W.S.’s success is built on strip-mining open-source technology,” said Michael Howard, chief executive of MariaDB, an open-source company. He estimated that Amazon made five times more revenue from running MariaDB software than his company generated from all of its businesses.

Andi Gutmans, an A.W.S. vice president, said some companies wanted to be “the only ones” to make money off open-source projects. He said Amazon was “committed to making sure that open-source projects remain truly open and customers get to choose how they use that open-source software — whether they choose A.W.S. or not.”

By the time A.W.S. held its first developer conference in 2012, Amazon was no longer the only big player in cloud computing. Microsoft and Google had introduced competing platforms.

So Amazon unveiled more software services to make A.W.S. indispensable. In a speech at the event, Andy Jassy, the head of A.W.S., said it wanted to “enable every imaginable use case.”

Amazon has since added A.W.S. services at a blistering pace, going from 30 in 2014 to about 175 as of December. It also built in a home-field advantage: simplicity and convenience.

Customers can add new A.W.S. services with a single click and use the same system to manage them. The new service is added to the same bill and requires no extra permission from a finance or compliance department.

In contrast, using a non-Amazon service on A.W.S. is more complicated.

Today when a customer logs onto A.W.S., they see a home page called the management console. At the center is a list of about 150 services. All are A.W.S.’s own products.

When someone types “MongoDB,” the search results do not fetch information for MongoDB’s service on A.W.S.; it instead suggests an offering from Amazon that is “compatible with MongoDB.”

Even after a customer has selected a non-Amazon option, the company sometimes continues pushing its own product. When someone creates a new database, they are presented an ad for Amazon’s own technology called Aurora. If they pick something else, Amazon still highlights its option as “recommended.”

Mr. Gutmans said A.W.S. worked closely with many companies to integrate their offerings “as seamlessly as possible.”

Amazon’s A.W.S. developer conference is now one of the world’s biggest technology events, drawing tens of thousands of people to Las Vegas every year.

The highlight is a speech from Mr. Jassy where he showcases new services. Because a new A.W.S. feature often spells hardship for some start-up, the presentation has earned the nickname “The Red Wedding,” a bloody event in a “Game of Thrones” episode.

“Nobody knows who is going to get killed next,” said Corey Quinn of the Duckbill Group, who helps companies manage their A.W.S. bills and writes a newsletter called “Last Week in A.W.S.

At last year’s conference, Amazon unveiled a new tool — Amazon CloudWatch Logs Insights — to help customers analyze information about its services.

Daniel Vassallo, a former A.W.S. software engineer who helped develop the product, said executives wanted to go after the market, but were worried it would look like Amazon was targeting a company called Splunk, which offers a similar tool and is also a major spender with A.W.S.

So Amazon previewed its new product to Splunk before the conference and agreed not to announce it during Mr. Jassy’s speech, Mr. Vassallo said.

“They weren’t particularly happy. Who would be?” Mr. Vassallo, who left Amazon in February, said of Splunk. “But we still went ahead and did it anyway.”

Splunk said it had a “strong partnership” with A.W.S. and declined to comment further.

Amazon has also created rules for its developer conference. Companies that pay tens of thousands or hundreds of thousands of dollars for a booth said they must submit their banners, pamphlets and news releases to Amazon for approval.

According to an A.W.S. document from August explaining marketing guidelines for companies it works with, Amazon bans certain words or phrases, such as “multi-cloud,” the concept of using two or more cloud platforms. An Amazon spokesman said it had stopped this practice.

Companies are also instructed to strike claims about being “the best,” “the first,” “the only,” “the leader,” unless substantiated by independent research.

Redis Labs was founded in 2011 in Tel Aviv, Israel, to build a business around managing a free software called Redis, which people use to organize and update data quickly. Amazon soon offered a competing paid service.

While that created a formidable rival to Redis Labs, Amazon’s move also validated Redis technology. The start-up has since raised $150 million, exemplifying the can’t-live-with-can’t-live-without relationship that many software companies have with Amazon.

Former Redis Labs employees estimate that Amazon generates as much as $1 billion a year from Redis technology — or at least 10 times more revenue than Redis Labs. They said Amazon also tried to poach its staff and undercut it with hefty discounts.

A.W.S. offers a discount to customers who commit to spending at least a certain amount with it, but it does not treat money spent on A.W.S.’s own services and rival services equally. Spending on outside services counts as only 50 cents on the dollar toward the balance. And discounts do not apply to non-Amazon products, according to A.W.S. customers.

If a customer still chooses Redis Labs through A.W.S., Redis Labs is required to kick back around 15 percent of its revenue to Amazon.

At one point, Amazon’s attempts to hire Redis Labs employees became so aggressive that executives removed some online biographies of its technical staff, said the former employees. A Redis Labs spokesman said the start-up had no recollection of that.

Some Redis Labs executives considered bringing an antitrust action against Amazon this year, the former employees said. Others balked because 80 percent of the start-up’s revenue came from customers on A.W.S.

“It was a love-hate relationship,” said Leena Joshi, a former vice president of marketing at Redis Labs. “On one hand, most of our customers ran on A.W.S. so it was in our interest to be tightly integrated with them. At the same time, we knew they were taking away our business.”

Redis Labs declined to comment on its revenues or A.W.S. actions. It said Amazon offered “important services.”

Not every company views A.W.S. as a threat. Ali Ghodsi, chief executive of Databricks, a San Francisco start-up that uses artificial intelligence to analyze data, said A.W.S. salespeople have lifted sales of his company’s products.

“I don’t see them using shenanigans to stop us,” he said.

But Saket Saurabh, chief executive of Nexla, a 14-person start-up in Millbrae, Calif., said he had reservations about Amazon.

In August, Amazon began a service for processing and monitoring data that competes with Nexla. Investors warned him about sharing too much information with the giant.

Mr. Saurabh went ahead anyway and signed his company up to work with Amazon in September. The reason? Amazon’s giant sales teams can give Nexla access to a vast audience.

“What choice do we have?” he said.