It’s recommended reading and watching if you want to sound smart when talking about the Seattle giant.
Presented by tech industry analyst, Nick Pappageorge, the session covers the early days of Amazon, its business pillars and revenue sources, M&A style and strategy, investments, jobs data and patent trends.
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While much of the local focus on has been around Amazon “destroying” Australian retailers with cheaper/faster/better customer experience, there’s much more to the company than ecommerce.
Founded in 1994 in Seattle as an internet bookstore, Amazon is now a major force in five industries: retail, logistics, consumer technology, cloud computing and media and entertainment.
“Amazon as a company is difficult to get your head around because it’s in so many different things,” Pappageorge says.
To illustrate Amazon’s focus CB Insights put together this graphic showing the proportions of open jobs by vertical and team.
The CB Insights data shows AWS is the biggest area Amazon is scaling up with more than 5,600 jobs, which translates to about 33 per cent of all the open listings. Fulfillment & operations was the next largest hiring area, representing about 19 per cent of open positions. Amazon is also busy hiring for its Alexa Team, with more than 890 jobs, nearly 5 per cent of all Amazon’s open positions and the Amazon Devices team, also accounts for about 5 per cent of job listings.
As Ben Thompson, tech analyst at Stratechery, puts it, “A more nuanced approach considers the fact that Amazon is not a monolithic operation, but rather a collection of businesses sharing resources, including a channel (Amazon.com), logistics, and a common technological foundation.”
Much of Amazon’s strengths across its business pillars comes from ongoing optimisation driven by a relentless focus on the customer.
As the report notes, “Amazon owns the richest data set on how consumers consumer, how sellers sell and (among the richest) in how developers develop. This in turn allows Amazon to optimise its online shopping experience, its logistics network, and developer environment (and even its voice AI) which all in turn make Amazon’s offerings even richer.”
A considerable portion of Amazon’s business today comes from bundling its services to sell to others by commercialising the technology company has built over the years in cloud computing and now AI.
“Amazon has done a very solid job making these essential tools available and then selling them back to the world. It did that with the retail platform when it opened it up to third parties [marketplace sellers], it did it again with AWS, the Alexa voice service is this new biggest outward push,” Pappageorge says.
The report also touches on two emerging revenue streams for Amazon: digital ads and fintech.
“The Amazon store’s position as a hub for eyeballs also makes it a valuable resource for selling ads. Amazon has implemented a programmatic ad product that’s expected to generate over $1B in online ad revenue in 2017. If it catches on, it could break up the Facebook-Google duopoly in internet advertising,” the report states.
In financial services it has launched Amazon Cash, which allows users to add to their Amazon.com balance by showing barcodes at brick-and-mortar checkout locations. It has also offered seller loans in India so suppliers can expand their operations and manage seasonal spikes.