Amazon

Amazon Jameson Davis XBIS 219 January 30, 2011 Wes Stinehelfer Amazon started out selling goods online through their virtual store. Amazon spent 12 years and $2 billion building the infrastructure of its online store. Amazon realized they were only using 10 percent of their processing ability at any one time, and decided to provide a series of computing, storage, and other services that make its infrastructure available to companies and individuals. This service helps these individuals and companies run their technical and logistical parts of their business. Amazon offers several different services, a few being S3, EC2, and Mechanical Turk. Amazon charges 15 cents per gigabit for S3, 10 cents per hour for EC2, and with Mechanical Turk Amazon receive a 10 percent commission. Amazon is moving away from its core business of online retailing to continue making a profit from its resources. Amazon built a huge infrastructure which was mainly being unused. Providing these services has been a move to continue profitability and use the company’s resources. I believe this decision was a wise and needed move of Amazon to continue to compete in today’s market. Renting storage space to customers allows a profit and gives the customer the peace of mind of Amazons secure network. Renting out-processing power allows other businesses to take advantage of Amazon’s resources without the expense of operating and maintaining their own. Mechanical Turk service allows companies to use processing power and real people to analyze its content. Amazon may face issues of storage limitations if it cannot handle the capacity of its thousand of companies, which currently use these services. Amazon is competing with Google, Microsoft, and others to build a Web-based, global computing platform. With its infrastructure and resources, I am betting on Amazon to be on top. Resources Rainer, R.K. & Cegielski, C.G (2010) Introduction to Information Systems: Enabling and Supporting Business. Hoboken, NJ: John Wiley and Sons.