AMAZON.COMAn Internet-enabled Business Growing

into a Technology Company

Basic Case Study

Presented by: DAVID RAMIREZPVAMU - September, 2008

HISTORY AND QUICK FACTS• Founded in 1994 by Jeff Bezos (current CEO and president).• Corporate office in Seattle, WA• Business area: e-commerce • Web site: www.amazon.com• Product: amazon.com (launched in 1995)• 17,000 employees (2007)•  Revenue: $14,84 billion (2007)• Net income: $476 million (2007) • IPO in 1997• Web visitors exceed 615 million/yr (as of 2008)• Initial product: online virtual bookstore• Progressive extension to other retail products: VHS, CD, DVD, software, video games,

electronics, apparel, furniture, toys, food etc.• Websites in different countries. • Global shipping of products.

• Profitable since 2001.• Partnered with other merchants powering and operating their retail sites (e.g. Target,

Sears, Timex, Lacoste).• Develops its own software (developer centers accross the globe).• Fulfillment and warehouse centers around the globe, close to airports.

 

HISTORY AND FACTS - continued

          

2000: Survived the dot-com bubble burst. 

Popularized on-line shopping (Bezos was TIME magazine's 1999 "Man of the Year")

CONTINUOUS INTRODUCTION OF NEW e-COMMERCE PRODUCTS

New EC products have been introduced through own development or acquisitions, with diverse levels of success: • 1999: Amazon Auctions (competing with eBay) - failure• 1999: zShops (fixed price marketplace) - failure• 2001: Amazon  Marketplace (used books exchange) - success.• 2007: Music store (competing with Apple's iTunes) - ?

Several acquisitions, e.g. Alexa (Web Traffic), IMDB

AMAZON WEB SERVICES

• Huge own infrastructure, developers base available worldwide.

• Starts selling inexpensive Web Services:

S3 – Simple Storage Service : STORAGE

EC2 – Elastic Compute Cloud : COMPUTER POWER

SQS – Simple Queue Services : SYSTEM MESSAGING

SimpleDB – STRUCTURED DATA

S3 – Simple Storage Service

• Developer-oriented• Each stored item identified by user key, can

be public, private (access rights management).

• Dependable, scalable, inexpensive• Unlimited objects, from 1 byte to 5 GB• 14 billion objects stored as of January, 2008• $0.15 per GB per month, plus charges for

data transfers and requests.

EC2 – ELASTIC COMPUTE CLOUD

• Web Virtual Computer for rent by the hour.• Elastic: create/eliminate instances on demand, managed or

automatically.• Can have repository of ready-to-go server images on S3.• From basic servers to high-CPU (7 GB of memory, 8 virtual

cores, 1690 GB of instance storage on a 64-bit architecture).

• Linux-based (Red Hat); Windows licensing not available yet. May use other Linux distros.

• Developer-oriented, to be used in conjunction with S3. No data transfer fees between EC2<-> S3.

• Fees from $0.10 to $0.80 plus bandwidth (max. 0.17 / GB)

SQS and SimpleDB

Simple Queue Service : Messaging between instances, applications.

• Charge $0.01 per 10,000 messages.

SimpleDB• Access to structured data, simple model,

does not require a schema, use with S3 to store objects.

• $0.14 per hour, plus $1.50 per GB/month

Thank you.