Vendor watch: Amazon – A gift for disruption

By Gareth Morgan
17 Jul 2012 View Comments
amazon webservices reception

For a company that makes just shy of $50bn a year, online retail giant Amazon manages to maintain an air of mystique. As R “Ray” Wang, an analyst with Constellation Research, puts it: “Whatever you think Amazon is, it’s almost certainly something different.”

Further reading

While many people regard Amazon as a mighty online retailer that has forced many traditional businesses to rethink their business models, few think of it as a mainstay of enterprise IT - but it is, and has been for many years.

Amazon Web Services (AWS) underpins a huge number of cloud-based enterprises and services, and there is also an ecosystem of cloud-based suppliers that offer value-added consultancy services around Amazon’s infrastructure to businesses looking to build a cloud presence.

Instagram, Pinterest and Netflix are just some of the highest-profile names based on Amazon, and when the cloud infrastructure giant suffered an outage in its US datacentre over the first weekend in July, they went offline for a period.

But social platforms and nimble start-ups are not the only organisations that use Amazon; the company offers federal government services, and the alpha and beta versions of the UK’s GOV.UK were built on AWS.

So in many ways Amazon is the dark horse of enterprise IT, and it is also a significant player in the hardware space.

This summer, consumers in the UK may finally be able to get their hands on Amazon’s Kindle Fire Tablet. This could prove to be the tipping point for Amazon, where the wraps finally come off its stealth move into the very heart of enterprise IT: a low-cost tablet, with a deep-rooted connection to enterprise services, retail and apps.

To understand the potential impact of Amazon in the enterprise, it’s necessary to look at how the company operates, says Wang. Some may simply assume that Amazon emerged as the scourge of bookshops by chance.

“When you think about it, books aren’t an obvious item for an e-commerce site. But it’s symptomatic of how Amazon builds its strength by picking something incredibly difficult and learning to master it. It pushes out incredibly disruptive business models, then goes really deep into it.”

Having earned its e-commerce spurs with books, Amazon grew to become a retail powerhouse, going on to offer consumer electronics, toys and garden furniture among other product lines. And if Amazon itself doesn’t stock it – one of its partners will. But being an e-commerce titan has done little to quench Amazon’s thirst for new opportunities. It started out with distribution services, before extending itself again as a supplier of computer services.

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