Amazon is one of the most notoriously tight-lipped companies in the tech industry when it comes to discussing its future plans. But it has tipped its hand in a big way: AWS is either on the cusp of releasing a major expansion of its workplace collaboration tools, or is at least far enough down the road with planning for such tools to take legal action against the former leader of its workplace tools division.
The hints are all over a new lawsuit filed by the company against a former Amazon Web Services executive.
As GeekWire reported Sunday, Amazon asked a judge to prevent Gene Farrell, former vice president, AWS enterprise applications and EC2 Windows, from working for Bellevue-based project management and workplace collaboration software company Smartsheet, alleging he violated the terms of his non-compete agreement without saying exactly how he did that. “Farrell was involved in and privy to AWS’s strategy, roadmap, pipeline, customers, strengths and weakness for cloud-based productivity products, including the development of new products not yet publicly launched or announced,” Amazon wrote in its complaint.
UPDATE: Former AWS executive temporarily barred from working at Smartsheet as non-compete lawsuit moves forward
Smartsheet’s software allows workers to share files and work on projects across different teams, among several other things. The closest approximation of that idea currently offered by AWS would appear to be Amazon WorkDocs, but even a generous interpretation of its capabilities appears to fall short of Smartsheet’s product, which competes more with task-management and collaboration software products like Trello or Asana.
In its complaint, Amazon wrote: “AWS competes with Smartsheet (Amazon will submit to the court more detailed information regarding these efforts, under seal, and attorneys eyes only, at the appropriate time). … Farrell has deep and detailed knowledge of the technical details of Amazon’s future product and service offerings, the business, and competitive considerations that drove the decisions to develop and deploy them, and the strategy for launching these new products.”
Amazon has been taking small stabs at the workplace productivity market, scooping up Biba to form the Amazon Chime discussion tool and beefing up the WorkDocs product, and the fact that it didn’t include direct assertions about its competitive stance toward Smartsheet in its public complaint indicates it has more features planned for this space.
However, this suit raises lots of questions about AWS’s future product road map and Farrell’s relationship to that product road map. Is AWS considering the dangerous game of competing with its customers by offering more and more services up the software stack?
- If AWS is indeed close to releasing a direct competitor to Smartsheet — which Farrell would have to have known about as a leader of that group within AWS — he is putting his new company in a very awkward position by allowing them to respond so strongly to the lawsuit. Even if he hasn’t disclosed the existence of such a product to Smartsheet, accepting a job with a company that makes a product competitive to one he worked on at AWS would appear to violate the non-compete agreement.
- If AWS isn’t currently working on a direct competitor to Smartsheet, it’s sending a strange message to software-as-a-service companies that are AWS customers: if we decide we might want to compete with your product or service in the future, and one of our key employees decides they want to work for you even though we don’t really compete, we’ll throw a bunch of lawyers in the way.
- And if AWS would like to be a bigger player in workplace collaboration tools — which is certainly an interesting market and a natural evolution for a cloud company — but is only in the preliminary stages of evaluating such a product, it has chosen a puzzling way in which to declare its intentions.
This would appear to be the key section of Farrell’s non-compete agreement, which Amazon provided as an Exhibit A to its complaint: how will a judge interpret the phrase “substantially the same?”
“…if the product or service provided or offered by the Employee to the Target Market is substantially the same as a product or service provided or offered by the Company to the Target Market…”
And a hilariously dated example of how to interpret the notion of “substantially the same” seems like it will force AWS into revealing exactly how much work it has done on a Smartsheet competitor in hopes of proving its case:
“A clarifying example: The following example is intended to reflect the intent of the parties in Section 3 (c)(iii). Assume for the sake of this example that the Company is selling a variety of books, CD-ROMs, and shrinkwrapped computer software to a particular target market on the Internet via an online interactive catalog, and is actively planning to sell video tapes to the same target market. In addition, the Company has had internal discussions regarding the possibility of selling music CD’s, but, so far as the Employee is aware, the Company has not, as of the Employee’s Termination Date, made any concrete plans to sell music CD’s (for example, the Company has not investigated the size of the music CD market, has not investigated the competition in that market, and has not contacted any prospective music CD suppliers.) Under those assumptions, Section 3 (c)(iii) would in no way restrict the Employee from selling music CD’s, or working for a company which sells music CD’s, to that same target market via an online interactive catalog on the Internet.”
If Amazon’s Smartsheet competitor is just an idea that has been kicked around internally, as opposed to a current project with goals and research-informed priorities, Amazon might have a tough time proving that Farrell breached his contract. If Amazon’s Smartsheet competitor was something the product team had been actively working on at the time of Farrell’s departure, he might be sidelined for a while, and Amazon just gave everybody in this market a heads up that it’s coming.
A judge is considering a request for a temporary restraining order against Farrell this afternoon, and we’ll update this post pending any news out of that hearing. AWS representatives did not respond to requests for comment on the lawsuit or its product road map.
