According to Business Week, here’s Jeff Bezos’ plan:
Bezos wants Amazon to run your business, at least the messy technical and logistical parts of it, using those same technologies and operations that power his $10 billion online store. In the process, Bezos aims to transform Amazon into a kind of 21st century digital utility. It’s as if Wal-Mart Stores Inc. had decided to turn itself inside out, offering its industry-leading supply chain and logistics systems to any and all outsiders, even rival retailers. Except Amazon is starting to rent out just about everything it uses to run its own business, from rack space in its 10 million square feet of warehouses worldwide to spare computing capacity on its thousands of servers, data storage on its disk drives, and even some of the millions of lines of software code it has written to coordinate all that.
With its Simple Storage Service, or S3, Amazon charges 15 cents per gigabyte per month for businesses to store data and programs on Amazon’s vast array of disk drives. It’s also charging other merchants about 45 cents a square foot per month for real space in its warehouses. Through its Elastic Compute Cloud service, or EC2, it’s renting out computing power, starting at 10 cents an hour for the equivalent of a basic server computer. And it has set up a semi-automated global marketplace for online piecework, such as transcribing snippets of podcasts, called Amazon Mechanical Turk. Amazon takes a 10% commission on those jobs..
Wall Street isn’t too happy about the move. They think Bezo’s program offering free shipping instead of running more traditional TV ads is crazy. (Personally I think it’s crazy like a fox, I know I buy books more on impulse because I’m not waiting to aggregate a shipment… also, I tend to buy new books instead of second hand books for this reason as well.)
As you’ll recall from my post on An Army of David’s the book predicts that companies who help individuals and microbusinesses become more independent and self sufficient will prosper.
Reynold’s examples in the book were already Amazon.com, Ebay, and Costco. With this move, Amazon.com is taking a huge leap forward.
I for one hope he’s successful in helping other businesses prosper so microbusiness is not dependent on just a few huge platform and tool providers but a multiplicity of them.
This is an excellent article. Be sure to read the whole Business Week article!