Amazon owns forty subsidiaries and Jeff Bezos even more through his own investment company. Some of these are make business strategy sense in the present and others show a clear strategy to maintain Amazon’s strategic position into the future. Listed below are six acquisitions that interested me:
1. KIVA SYSTEMS (AMAZON ROBOTICS)
Founded 2003, acquired 2012
When it was independent, Kiva was operating for multiple clients, supporting logistics operations by using mobile robots to retrieve and carry pallets of products around warehouses. After the acquisition, Kiva stopped servicing and taking on new clients and began developing and manufacturing robots exclusively for Amazon, becoming Amazon Robotics. The efficiency of a fleet of robots in Amazon’s delivery services cannot be denied and explains why Amazon removed this Kiva’s technology from the market, preventing its use for other distribution companies and competitors.
founded 2005, acquired 2017
It is difficult to imagine a world where Amazon is not the dominant e-commerce platform but, in the Middle East (an emerging market), that was the case- Souq was the largest provider, the top-dog. Now that Amazon owns the company, it has access to those 50 million consumers and can vastly scale the previous operations of Souq.
3. body labs
founded 2013, acquired 2017
Body Labs develops artificial intelligence that can recognise 3D body shapes and motion from photos and videos using statistical algorithms. These models could have multiple applications. Imagine shopping for clothes online and being able to access a 3D, measurement-accurate model of your body to see what the clothing will look like on you before buying it. In gaming, this technology could increase immersion in video games. Although the technology is for body shapes, it would be interesting to have a future where you could have a 3D model of your home to see what each piece of furniture would like in a room. This service could change the consumer shopping experience. It could also be used in healthcare, possibly as a training tool for medical students.
4. Sqrrl Data INC.
founded 2012, acquired 2018
This company provides cyber security and is most known for its active detection of advanced persistent threats. Advanced persistent threats are sophisticated threats that gain unauthorised access to a network whilst remaining undetected. Sqrrl uses data analytics to search for these undetected threats. This work is important since cyber-attacks can cause electrical blackouts by disrupting power grids and breach national security. Amazon acquiring this software does not just protect them from advanced persistent threats but could also increase the importance of the company to the government since Sqrrl helped develop Apache Accumolo, a security system formed by the NSA.
5. Cloud Endure
founded 2012, acquired 2019
Cloud Endure is a cloud computing company that focuses on disaster recovery. It works by continuous block replication so that a copy of business infrastructure is available when disaster hits. Cloud Endure provides continuous backup and live migration. Live migration is useful for when a company starts a new machine- data can be migrated from existing systems to the new machine in order to save time. This work is important because Amazon will be able to recover faster from disasters, limit the capital lost by each disaster event and retain customers. The technology would also prevent data loss and allow Amazon to keep their reputation as the top e-commerce platform as the world continues to move online. It will be interesting moving forward whether Amazon will allow Cloud Endure to continue servicing applications like Google Cloud Platform when those contracts end.
founded 2014, acquired 2020
Zoox is an autonomous driving company, that is trying to solve the challenges of self-driving cars with a zero-emissions vehicle. Self-driving cars could eventually make the roads safer and so reduce the future cost of insurance and repairs. There could even be a model similar to Uber where people can book a car, access it with an ID of sorts and go rather than owning individual cars. Having less cars will reduce traffic and maybe encourage walking and biking on the roads more as it becomes safer for pedestrians. It will also remove the barriers to driving for disabled people. For Amazon, this technology will cut delivery vehicle costs.
What does this mean?
All of these acquisitions point to a future where Amazon has infiltrated many of the world’s emerging markets, has self-driving lorry’s, robot-run warehouses and a disaster-proofed, cyber-attack-proofed computer system. The downside of all of this innovation is the effect this will have on warehouse workers and lorry drivers and therefore a tax or an incentives system where companies are taxed more if they have more artificial technology working or gaining tax breaks/ incentives for keeping more workers on will definitely be on the table for the political turmoil this will cause.
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