Amazon eliminates the cost to host a skill for its virtual assistant Alexa. The goal is to encourage developers to expand the Alexa software and boost the popularity of its Echo devices with consumers. Inc.’s Alexa has more than 10,000 skills and the web giant has made it free for developers to host skills on its cloud-computing unit, Amazon Web Services.

Alexa is the virtual assistant software that powers the voice-activated Amazon Echo, Echo Dot and Tap devices. Consumers can ask her to tell a joke, order a pizza, place an order on Amazon, No. 1 in the Internet Retailer 2016 Top 500 Guideor perform thousands of other tasks. Revenue generated via Alexa-powered smart speakers increased 171% year over year in the two-month period of January and February, according to Slice Intelligence data. Slice collects purchasing data from the email receipts of some 4 million consumers.

Developers can build Alexa skills for free, but they have to pay to host the skill either on their own servers or using AWS. Amazon says developers with a published Alexa skill can apply a $100 AWS promotional credit and receive $100 per month in additional credits if they incur other AWS charges for the skill.

The cost to host a skill varies depending on how popular and how complicated the skill is. For example, a popular skill used by hundreds of thousands of people every month that requires Alexa to ask for bank account information would cost more to host than a simple task such as telling a joke that only hundreds of consumers use. A request to the server is categorized as every interaction with the skill, therefore saying, “Alexa, ask 1-800-Flowers to order Tracy flowers,” is one request and “A dozen reds roses, please,” is another request and “Deliver them on Friday, March 24” is yet another, for a total of three requests from that one skill.

“This $100-per-month program covers the costs for the vast majority of developers using AWS, and it’s also meant to encourage new developers to get started building robust and creative skills,” an Amazon spokeswoman says.


Any developer can create an Alexa skill and submit it to Amazon for approval, much like submitting an iOS app to Apple Inc. (No. 2 in the Top 500) to publish in the App Store. An Alexa skill, however, is stored differently from an app. A consumer downloads an app to her smartphone and the app runs on her device, says Alexander Meissner, chief technology officer at voice technology developing firm VUI Agency, which builds Alexa skills for businesses. “Skills have to be hosted in the cloud and have to be available to ask questions to, and this is a huge barrier to entry for small developers,” he says.

Amazon wants to give developers the freedom to create robust skills to use on their platform without worrying about the cost, Meissner says. Even though Amazon is an e-commerce giant, many of Alexa’s skills are not shopping related. Amazon wants Alexa to have a large number of skills so consumers will continue to use the software. After a consumer chooses to have an Echo in her home, she is unlikely to purchase another voice-activated, smart-home device like Google Home, Meissner says.

Amazon also announced last week that any skills Alexa has on the Echo device will now work within the Amazon’s iOS shopping app. That means a consumer can use her voice to ask Alexa to search for products within Amazon’s app, or ask Alexa for non-shopping tasks, such as the news or weather, without needing to have an Echo device.

Here’s what happens on the back end when a consumer speaks to Alexa: The consumer needs to say the name of the company or service, such as “1-800-Flowers,” “Uber” or “Domino’s.” The software will interpret what the consumer says and the intent of the request, and then route the request to the appropriate skill. For example, the software can interpret if a consumer says, “Alexa, ask Domino’s to order my favorite pizza,” or if she says, “Alexa, ask Domino’s to track my order.” This way, Amazon sends the business as specific a request as it can. The business will then send the answer back to Alexa, which will speak the answer.


“Amazon is taking the heavy lifting off of the developer,” Meissner says.

If the consumer doesn’t specify the name of the business affiliated with the skill, saying only, “Alexa, order flowers,” for example, then Alexa will route the request to the most popular company affiliated with that skill in the category. A consumer can also have preselected skills in the Alexa app, which is tied to her account, so Alexa will know that her preference is to order from Inc. (No. 57) if she gives a vague request.

Meissner likens developing an Alexa skill to the processes of creating a chatbot. VUI Agency has developed 10 Alexa skills for businesses, most of which are in the financial services industry, he says. VUI Agency charges businesses $5,000-$20,000 to build a skill and then $100 each month to host and monitor the skill, Meissner says. It takes the vendor between three weeks to three months to create a skill, he says.

Retailers however don’t need a vendor to create an Alexa skill. For example, Domino’s built its Alexa skill in-house. Amazon also provides developers with an Alexa Skills Kit, which is a collection of Application Program Interfaces, templates and guides, the Amazon spokesman says. With the how-to guide some skills in the trivia, facts and how-to sections can take less than an hour to build, the Amazon spokesman says.