What began as a small internal project put together by a humble team of engineers became a juggernaut and one of the fastest growing business in the online services sector in just 10 years; a service known as Amazon. Initially existing solely as an online retailer and as a hub for community members to buy and sell their own products, Amazon soon began expanding into other areas of the service industry as they acquired more resources from continued success. Some of these other areas include web services and home services.
The Seattle based service unit founded in 2006 known as Amazon Web Services (AWS) is famous for providing the necessary computation required to maintain the network infrastructure of start-ups and widely-known corporations; including Netflix, Airbnb, media organizations such as The Washington Post, and even branches of the federal government such as the Central Intelligence Agency (CIA) and the Pentagon (Jayakumar, 2015). Now operating from 12 different regions around the world, the most commonly understood of the services are Amazon Elastic Compute Cloud and Amazon Simple Storage Service. Central to the platform, the Elastic Compute Cloud allows customers (typically corporations of any size) to rent virtual computation in order to process their own applications (Jayakumar, 2015). Conversely, the Amazon Simple Storage Service (S3) provides digital storage of information and files through various web interfaces (Jayakumar, 2015). Beginning with a price of $0.15 per gigabyte a month for the base storage and additional fees for manipulating the data (input/output), Amazon began to offer discounts for users that stored information exceeding 50 terabytes. While commonly utilized for corporations in the field of Information Technology (IT) this storage infrastructure is also used to power Amazon’s internal e-commerce networks. In general, Amazon Web Services is yet another step in the direction of the phenomenon known as the Internet of things; as the provision of large-scale virtual computation fares significantly cheaper than building physical server farms. The success of AWS dominates the cloud-computing industry; possessing computation approximately “five times larger than the next 14 cloud vendors combined, according to a 2014 report by research firm Gartner” (Jayakumar, 2015). The key to the business strategy was the development of relationships with various companies belonging to the same network.
Recently in 2015, the company launched a new subsidiary of Amazon.com known as Amazon Home Services. Initially limited to a select number of cities in the United States, the sector offers a service platform that provides various forms of labor such as “plumbing, gardening, painting, cleaning to fitting a new car battery, or odd jobs around the house, along with goat grazing or guitar lessons” (Dans, 2015). Despite the lack of innovation in the service, AHS attempts to capitalize on the reputation of Amazon as a whole while simplifying the process of acquiring labor to perform “tedious or repetitive tasks that cannot be easily automated” (Dans, 2015).
In general, the policy of innovation at Amazon allows the company to take anything developed or acquired and create a product as a result. While not every initiative of this manner has been successful, it tends to succeed given the work ethic of the company and has been the source of what makes Amazon so competitive. As AWS works to provide virtual computer power for corporations, AHS works as a virtual network to connect customers with skilled labor. In addition, other services such as AmazonFresh work to simplify and increase accessibility to products sold at the local grocery store, neighborhood shops and restaurants; allowing customers to select items, purchase them, and have them delivered the next morning. The overall competitive advantages that Amazon creates is simplicity and accessibility through the virtualization of services.
- Dans, E. (30 March 2015). Is Amazon set to shake up the services sector? Retrieved June 8, 2016 from https://medium.com/enrique-dans/is-amazon-set-to-shake-up-the-services-sector-449ebc7a1621#.ma8my7udg
- Jayakumar, A. (23 April 2015). The rise of Amazon Web Services. Retrieved June 8, 2016 from https://www.washingtonpost.com/business/on-it/the-rise-of-amazon-web-services/2015/04/23/fe1b3980-e795-11e4-9a6a-c1ab95a0600b_story.html
