With competition heating up in the cloud computing arena, Amazon.com Inc. (AMZN) is removing a clause from its Amazon Web Services contracts that irked customers worried about their intellectual property (IP).

Based on an updated version of the AWS customer agreement, the ecommerce giant has remove the non-asset clause from the contract that prevented customers from suing the company over patent infringement. With a tons of companies using AWS for computing and data storage, many were concerned that IP could end up in the hands of Amazon.

The company has a reputation for entering new markets and completely disrupting them, so it's not surprising that companies would have a problem with that part of the contract. With AWS' leading market position, Amazon had little reason to remove the clause. Now with Microsoft Corp. (MSFT) and its Azure cloud service closing in on AWS, Amazon is trying to make itself friendlier to its corporate clients. (See also: AWS and VMware Expand Cloud Deal to Disrupt Entire Software Space.)

Patent Troll Protection

The removal of the clause makes Amazon “appear more user friendly, and it smoothes over a major objection point corporate counsel have been raising,” said Phil Davis, CEO of PhilStockWorld.com, an investment advisory service, in an interview with Reuters. In replacing the so-called non-asset clause, the company added new language that protects AWS and its customers if either are sued by a third party for patent infringement. “AWS will defend you and your employees, officers, and directors against any third-party claim alleging that the Services infringe or misappropriate that third party’s intellectual property rights, and will pay the amount of any adverse final judgment or settlement,” the clause reads. 

Microsoft included a similar IP defense for Azure customers in February, enabling customers to choose from 10,000 patents if they are in need of help defending against a suit, and Google Cloud Platform provides similar defenses to its customers, reported GeekWire. While the cloud companies haven't had to deal with a lot of patent lawsuits, the mobile industry is no stranger to patent enforcement companies who targeted mobile app developers for running their apps on Apple and Google developed technology. Experts think cloud computing will be the next area these patent trolls go after, reported GeekWire. (See also: Wal-Mart Orders Tech Partners to Get Off Amazon Cloud.)

For Amazon, the move to make its cloud service friendlier comes at a time when competition is heating up from Microsoft, Google and Alibaba Group's (BABA) Alicloud service. Last month, Pacific Crest Securities analyst Brent Bracelin predicted Azure would have more revenue than AWS for the first time this year. The analyst is predicting spending on cloud initiatives could explode to $239 billion in the span of five years, with Microsoft benefiting the most. Bracelin pointed to what he called “unmatched product depth and breadth" in software as a service, platform as a service and infrastructure as a service as the main reasons.

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