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Case Study, Amazon: From Book Seller to Service Provider Essay

Niklas Zennstrom stated: “When we look at investing, we always think about ‘how defensible is this, how likely is it that somebody is going to copy this. ‘ E-commerce tends to be something easy to copy because it’s execution. ” Amazon is the world’s largest online retailer since the company opened in the garage of Jeff Bezos’, and its yearly are over 10 billion dollars. Many companies subsequently have copied Amazon and now compete for e-commerce profits; therefore companies like Google and Microsoft become an issue for Amazon.

This has instigated Amazon to develop products for other e-commerce businesses, and now Amazon offers business- to -business e-commerce. This paper will discuss whether Amazon is moving away from its core competency of a leading online retailer, and if this is a wise strategy. A brief description of the Amazon database, how Amazon uses each component, and what data management issues may be encountered by Amazon, the relationship between data, information, and how Amazon tackles each will be included in this paper.

To survive the invasion of companies like Google, Amazon has resolved to supply a series of computing, storage and other services that make its infrastructure available to businesses and people to assist them administer the technological and logistical parts of their company. Amazon only uses 10 percent of its processing capability, and offering these additional services will not impair other segments of the online retailer. This is a move away from its core expertise; however, this is a shrewd decision on the part of the Amazon Company. This strategy allows the company to boost earnings by using resources already on hand.

This is similar to a landlord deciding to rent out the empty apartment as a storage unit, because it was not used by a family. The space was already there the landlord just found a new use for the vacant space. The Amazon database is made up of the Simple Storage Service (S3), the Elastic Compute Cloud (EC2), and the Mechanical Turk. These services programs are an attempt by Amazon to be a principal competitor in the next development of the Internet. The Simple Storage Service allows businesses to warehouse data and applications on Amazon disk drives at 15 cents per gigabyte per month.

For 10 cents an hour Amazon offers processing power on the Elastic Compute Cloud which is the same as one rudimentary server. The Mechanical Turk is the most complex of the three Amazon database components, and is commission based. Rainer, Turban wrote in the: Introduction to Information Systems: Supporting and Transforming Business, 2nd Edition, that the: “Mechanical Turk service combines processing power with networks of real people who are paid to do the kind of work that machines cannot do well, such as recognizing inappropriate content in images or transcribing audio.

Companies post pieces of work onto the Mechanical Turk and pay people online, for which Amazon receives a 10 percent commission. ” The data management issue that might be encountered by Amazon is how much space they can rent out before it takes away space and time from the online retailer system. A second issue would be what Amazon must do when Google and Microsoft start to copy and develop similar products at a lower price. Amazon concentrate on declining sales by increasing its productivity to ensure investors will see the profit growth they expected form the online retailer.

Amazon decided to offer services that no other online retailer provided and this is how they tackled all their current issues. Amazon is helping thousands of companies store and debug their data information, therefore all three programs can be used together by a client to store e-mails after they check them for malware, and see what keywords draw prospective consumers to their sites. I think Amazon will succeed goal to revolutionize retailing as long as they understand how to adapt quickly in business.


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