sensible, sustainable business matters

Here's a business case for you. Amazon is the classic example of a new model, but which model is it? What exactly does Amazon do? You could say that Amazon is an online bookstore, which it is, but it also sells just about everything these days. So it's an online retailer, isn't it? Well yes, but wait. It has the front-end of an online retailer but the back-end is a combination of a slick short-term warehousing and despatch service with a massively capable and finely-tuned computing infrastructure. So?

OK, so our online retailer looks like this.

1. It offers goods at one website, sure, but also keeps track of what you buy and lets you know what other things you may like. It acts a bit like a helpful shop assistant with a fantastic memory
2. It takes takes your orders, tells you if it's in-stock or not and organizes despatch, all online, again like a helpful small-store guy
   
3. It also crawls other loosely affiliated websites and looks for product mentions that are within its scope; if it finds some they get hot-linked to the Amazon site. Search buttons are also provided. This is not so usual in the 'real' world, but possible. In return for doing some of Amazon's work the affiliates get a commission. Now it's not a unique method in and of itself but the way it's applied presents as an innovation. It adapts an old methodology to do new stuff in a new place
   
4. So just to recap, it sells, purchases, briefly stores and slickly despatches; and lets you (the customer) know exactly what's happening at each step.
   

And behind the scenes are web developers writing the code that does all the smart stuff. And hardware that hosts all of the virtual retailing and supply-chain coordination applications. And this is the start of the next Amazon idea.

1. Amazon realized that it could offer its slick despatch service to other organizations, for a fee. So another provider (of any sort, virtual or not) could use Amazon's physical presence as if it owned it, but only as much as it needed, when it needed it. This was a win-win, providing first-class despatch for anyone and taking up Amazon's slack
   
2. But wait, it doesn't end there. Amazon further realized that the computer infrastructure itself could be turned over to other people's tasks, and opened up access to anyone who wants to buy a slice of computing power, no matter how small.

Now it's not a new idea, time-sliced computing has been around for yonks. But offering it to anyone, anywhere, on an as-used basis is an innovation. IBM may have offered shared mainframe time to big business decades ago but it didn't offer it to me personally, and I couldn't have accessed it anyway. But Amazon has offered it, and made it easy to access. Coupled with the Internet and you have frictionless, anyplace scalable computing, when you want it.

So what exactly is Amazon now? An online retailer or a start-up cloud-computing market leader? Well it's certainly not just a book store.

Labels: Amazon, cloud computing