Amazon_Revolution

Amazon Revolution Renee Alva XBIS/219 July 24, 2011 Caryl Rahn Amazon Revolution At one time Amazon was considered just that, the up and coming monster of retail that would be feared to monopolize the e-business world when it came to internet sales. However, the internet market has revolutionized faster than Amazon was able to adapt. Unlike Apple, Amazon has come up with a few solid ideas, but is losing the footrace in the retail-internet sales division. Although Amazon has spent approximately 2 billion on infrastructure for it’s on- line stores, it has been utilizing only ten percent of it processing capacity at any given time (Rainer & Turban, 2009). Amazon has been losing profits even though it has sales over 10 billion and is considered one of the biggest on-line retailers in the world. Amazon had to figure out how to compete against other on-line retailers like Google. Actually, Google was the biggest problem. Google was forging ahead because of it ability to target more of the community via YouTube and MySpace (which Google owns). Google was attracting a larger audience because it was offer other desirable services besides shopping. Google was offering international communication amongst the general public, as well as the ability to shop, date, and check-out people world-wide. This is something Amazon could not compete with. Therefore, they needed something else to generate profits from the infrastructure already built. Since they had plenty of processing power not being used, Amazon came-up with the following three services, they are: Simple Storage Service (S3), the Elastic Compute Cloud (EC2), and the Mechanical Turk. Simple storage charges $3.00, and 15 cents per gigabyte per month per business to store data and/or applications on disk drives from Amazon. Via EC2, processing power is rented out for ten cents/ hour per one basic server. The Mechanical Turk allows the hiring of people by other companies to scan/access material posted for inappropriate content in the form of images and audio. Amazon is paid a ten percent commission. Branching off in this direction has given Amazon a jump-start to building a computing, global, web-based platform to compete with the likes of Microsoft and Google. Amazon needs to get a handle on the future because Google is stepping all over their present endeavors. Thousands of companies are already on-board with Amazons ability to save them money using their infrastructure. Such as: Webmail.Us (www.webmail.us), who monitors and maintains e-mail from viruses, etc., for their clients. Amazon receives at least a terabyte of data a week. EC2 is used for storage back-up, saving the company approximately 75 percent over night. Powerset (www.powerset.com) has a large amount of web pages to index, read, and process. They use EC2 and $3 to keep their cost down. Amazon definitely has a shot to monopolize the “sub-letting” of their processing abilities, just like the major gas companies in California are paid by other smaller companies to use their pipelines to transport natural gas to certain areas in California. I think they are off to a great start, and should keep running. Reference Rainer, R. K., & Turban, E. (2009). Introduction to information systems: Supporting and transforming business (2nd ed.). Hoboken, Wiley., NJ.