Amazon: Bigger than the Amazon River. The history of Amazon

Perhaps the history of Amazon.com is one of the most interesting and unusual. The company was founded before the dot-com crash and was able to survive losses of half a billion dollars while continuing to grow during that difficult time.

The story begins on January 12, 1964. It is on this day that the future founder of Amazon, Jeffrey Bezos, is born in New Mexico. Bezos Jr. spent his childhood in Houston, where he moved with his parents. In Houston, Jeffrey's stepfather received a post at the Exxon oil company.

Starting at a young age, Jeffrey became interested in technology. Since childhood, he has been making and inventing something, so he was even able to assemble a small alarm system. Bezos' passion did not prevent him from completing his education at school with excellent marks.

After graduating from school with honors, young Jeffrey entered Princeton University in 1982, where he also received an excellent education.

It's an interesting situation. Large companies such as Apple, Microsoft or Dell were founded by people who, while studying in higher education, decided to start their own business and drop out of school.

In the case of Amazon.com, the situation is completely opposite. Jeffrey Bezos received a good education and even after that, for a short time he was an employee in one small company.

Jeffrey's first work experience was at the Wall Street stock exchange, where he was responsible for computers. His next job was Fitel, where he was given the job of deploying a large network. By the age of 26, the future founder of a famous IT company took the post of vice president at Bankers Trust.

However, despite such successes, the young man does not stop looking for work. In 1990, he joined Shaw, where he became senior vice president. Working for this company was my last job as an employee. The time is coming to start your own business, the Amazon.com project. Bezos worked at Shaw for only 4 years.

It is worth noting that at the time of his dismissal he was married and the main thing was the idea of ​​​​organizing a book trade through the Internet. It is believed that Jeffrey partly came up with this business idea thanks to his wife’s hobby - she was a writer.

Whether this is true or not is not for us to judge, but it was undeniable that at that time the Internet was gaining popularity day by day. As a result, most people understood what awaited them if the Internet became a mass phenomenon. Therefore, Jeffrey Bezos immediately decides to leave for Seattle, where he could begin to realize his dream.

In 1994, he arrived in New York, and a year later Amazon.com began operations. While numerous Internet companies failed to survive the dot-com crash, Bezos' brainchild continued to grow.

The fact was that Amazon.com’s strategy was initially built on a long-term perspective, and at the same time, the founder of the online store knew how his project would bring him profit.

Many IT companies grew very quickly in those years, along with Amazon.com itself. Eloquent reviews of Bezos’ brainchild appeared in the press. Some people were confident that Amazon.com would fall as quickly as it grew, others were confident in the company's founder - there was no consensus on Jeffrey Bezos' project.

Two years after the opening of the first version of the store, Amazon.com became a joint stock company. The shares were sold out in a matter of days, since among startups, Bezos' brainchild was quite distinguished by its constant growth.

In 1999, the event that cleared the market of unstable companies occurred - the dot-com crash. Jeffrey Bezos' company lost $500 million, but was able to survive thanks to its development strategy. For this, the name of the founder of Amazon.com was included in Time magazine, which recognized Jeffrey Bezos as Person of the Year.

Jeffrey Bezos, in addition to his main type of business - trading, is also involved in other projects, among which Blue Origin can be noted. This company was created in 2000 and its specialization is suborbital tourism. Despite the fact that Bezos’ company is far from Virgin Galactic (the founder and owner is Richard Branson, part of the Virgin group of companies), he still has everything ahead.

The uniqueness of Amazon.com itself lies in the fact that from the very beginning of the company’s activities it has been customer-oriented, and therefore the project is constantly being improved. In Amazon, one of the first stores selling books, the practice of customer reviews of products from the store’s assortment was used for the first time among stores.

Despite the fact that the manufacturers themselves were against introducing such a function on the site at the very beginning, in the end they only benefited from it - reviews of the product increased the number of sales.

The second factor in the success of the project was that in addition to books, Amazon.com also added products from other categories. For example, such product categories as household appliances, movies on DVD and CD, digital music and much more were added to the assortment of the online store.

The success was also influenced by the emergence of an affiliate program from the store, thanks to which the company’s clients have the opportunity to promote products from the Amazon.com range on their own and receive their profit from sales.

The most interesting thing is that most people associate this store, first of all, only with books. But it is also worth talking about other types of business of this company.

Jeffrey Bezos' company recently entered the computer rental market. A concept called “computing clouds” has emerged, which is quickly gaining popularity these days. Computers are provided for rent to perform fairly complex calculations.

The company began delivering the first computers back in 2006, and to this year the development of this line of activity has not lost popularity. Amazon gives a huge priority to “cloud computing”, which is where most of the time is spent.

Next, it is worth noting an interesting technical innovation that Amazon.com began to promote. We are, of course, talking about a well-known gadget - the Amazon Kindle e-reader, which allows you to download books using Internet technology.

Interestingly, Amazon Kindle is not promoted through paid advertising - all marketing is built around the community, which further promotes the product with its reviews. Today, this gadget ranks first in the electronics sales ranking, and this is not surprising; almost every day new notes about the device appear from the company’s founder, Jeffrey Bezos.


The online store Amazon.com is recognized as one of the leaders in online trading. Jeffrey Bezos' company itself develops many areas of business in different industries. We have already talked about selling books and other goods, a digital music store, renting computers and much more.

As of 2008, Bezos' company has about 21,000 employees in all online store locations. Net revenue for the same year amounted to more than 650 million dollars, a turnover of about 19 billion.

Even if the name Jeffrey Bazos doesn’t mean anything to you, his project Amazon.com, most likely you know. Yes, yes, this is the one that sets the tone for the entire online trading sector today. This is exactly the store where, for the first time in the world, reviews of purchased goods were introduced and a unique sales system was created, which has not yet been surpassed.

From today I will tell you about the history of the phenomenon, which received its name in honor of the deep-sea Amazon River, and which caused a whole wave of followers. The fame of Amazon thundered so loudly that even in distant Russia, the largest domestic one became nothing more than a successful copy of this unique project. I'll tell you about a revolution that was brought about by just one man, who, as you now know, is Jeffrey Bezos.

Tables made of doors and first dreams

Before 1994 Jeff Bezos was a successful man who was ahead of many, but he was still a damn long way off. At 30 years old, he was simply a man receiving a decent percentage from fate for his innate abilities and desire for knowledge. By this time, Jeffrey had graduated with honors from university (programming) and worked a little on Wall Street, where the future billionaire was responsible for computer software. After Wall Street, Jeff worked for a small company, where he quickly rose to the post of vice president.

Fate, if it didn’t shower Bezos with gifts, was certainly kind to him. The main advantage that the founder of Amazon had was the rare ability not to isolate himself in one area. So, he not only had an excellent understanding of programming, but also had a great ability to delve into the essence of economic processes. A sort of erudite, for whom everything in the world is curious and almost everything comes easy.

In 1994, Jeff Bezos decided to finally leave the status of an employee and open his own business. He was especially attracted to the Internet business, which was just beginning to gain momentum. Most of all, I was drawn to creating my own online store: I had both an understanding of the essence of this business and an opportunity.

After some deliberation, Bezos decided to create a store, becoming a convenient intermediary between the publishing house and readers. Now this model seems natural, but in 1994 it was so fresh and new that there was no guarantee of success.

At first, the project was launched using his own savings and money that Bezos received from his parents. The main office was a small room with a wooden table made from pieces of a door and an old computer. Today, Amazon's workforce numbers a couple of tens of thousands of people, and the huge office building in Seattle is amazing, but it all started more than modestly.

In the summer of 1995, the project started, and in the fall of the same year, the store’s net revenue amounted to about $20,000. Such a rapid growth in Amazon's popularity is explained by just two factors:

• A). There were few websites at that time;


• b). The store was originally conceived as a place where customers should feel comfortable.

To be honest, it was Amazon that was one of the main culprits of the tragedy, which would later go down in history as the “dot-com crash.” Bezos' store was initially a strong project with a long-term perspective. This store, if you will, had a strong foundation and a founder with a golden head. When Amazon's business took off, investors believed that the site's success was not a special case, but a pattern for the entire young Internet market in general. Millions began to be invested in the most seedy projects that were created by random people on their knees, expecting similar growth from them.

You, miracles don’t happen: Amazon itself emerged from the dot-com crash of 1999 with losses of $0.5 billion, but hundreds of other projects simply went bankrupt because they had neither potential, nor a clear strategy, nor Bezos. This was a lesson that benefited the store - Jeff Bezos realized that in order to be first, you need to constantly increase the usefulness of the resource and invest money in advertising.

In the same 1999 (just 4 years after the table made from pieces of a door!) the famous American magazine Time named the founder of Amazon person of the year. The result is unheard of, because the project was, in fact, just beginning. Of course, this recognition brought additional serious investments and increased the popularity of the resource. In 2000, about 2 million people visited the store every day, which allowed the site to enter the TOP 25 most visited sites on the Internet.

Amazon today

It may seem a little strange, but amazon.com has survived the next ten-plus years (to this day) without any particular shocks or sharp jumps. The capitalization of the resource and the assortment of the store increased, new representative offices were opened in different countries of the world and the staff expanded - all this happened somehow naturally and painlessly. It turns out that having once taken control of the market, Amazon never left its leading position.

Today, Amazon is a colossal corporation with a turnover of about $20 billion a year and a net profit of about $0.5 billion. The site has a lot of technological services, powerful advertising, analytics, and information departments. This is already some kind of online empire, which began with one wooden table and an old computer. And a talented man named Jeffrey Bezos. I hope you remember this name now!

Gadget manufacturers

Amazon.com Inc., better known simply as Amazon, specializes in online commerce and cloud computing. Its headquarters are located in Seattle, the “Queen City” of Washington State. It is the largest online retailer by total sales and market capitalization in the world.

The company began as an online bookstore and then also began selling other products, including electronics. Her success seems very natural. The company does not have direct sales stores, since all transactions are carried out online.

Amazon produces e-book readers, tablets, set-top boxes and smartphones. At the same time, it is the largest provider of cloud infrastructure services (IaaS) on the globe. The firm also sells some other products (such as USB cables) under its internal AmazonBasics brand.

The company was founded in 1994 by Jeff Bezos, who left his post as vice president of D. E. Shaw & Co., a Wall Street firm. After moving to Seattle, he began working on a business plan, eventually starting his own business.

The future investor and entrepreneur was destined to play a huge role in the development of e-commerce, as he became the founder and CEO of Amazon.com. His other lifelong interests included newspapers and the aerospace industry.

Jeff would later become famous as the founder and owner of the private developer and manufacturer of aerospace products Blue Origin (appears in 2000), which, starting in 2015, will conduct test flights into space.

The company plans commercial suborbital human flights in 2018. In 2013, Bezos will also acquire The Washington Post.

As of August 2016, Jeff's personal wealth is estimated at $66.7 billion. This figure makes him the 3rd richest person in the world on the Forbes list of billionaires.

Jeff Bezos was born in 1964 in Albuquerque, later named the fastest growing city in the United States. The boy's parents were immigrants living in Texas.

Over the course of many generations, the family bought land and eventually became the owners of a 25,000-acre ranch near Cotulla. As of early spring 2015, Jeff would be listed as one of the largest landowners in Texas, but this would not happen until much later.

The boy’s beloved grandfather served as regional director of the American Atomic Energy Commission in his city. Young Jeff spent many years with him on the ranch, showing mechanical aptitude at an early age.

The future entrepreneur's mother's name was Jacqueline, and at the time of his birth she was still a teenager. The marriage with the boy's father lasted just over a year. When he was 4 years old, Jacqueline married for the second time - to Miguel Bezos, a Cuban who, at the age of fifteen, left alone for the United States.

Jacqueline's new boyfriend married the girl and officially adopted her son. After the wedding, the family moved to Houston, and Miguel got a job as an engineer for a large company. The boy attended River Oaks Elementary School from fourth to sixth grade. As a child, he spent his summers working on his grandfather's ranch in south Texas.

As a teenager, Jeff showed an interest in science and demonstrated technological knowledge; he once even rigged an electrical alarm to keep his younger siblings in the room.

After the whole family moved to Miami, Jeff attended high school there. He soon began taking courses at Florida State University, and in 1982 even received the Silver Knight Award, one of the most respected student awards in the country.

The purpose of this program is to recognize outstanding students who not only achieve good grades, but also selflessly use their knowledge and talents to contribute to the student community.

This award was established back in the 50s by John S. Knight, a Pulitzer Prize winner. At the graduation ceremony, Jeff gave the valedictorian speech - a great honor for a graduate of an educational institution.

Bezos graduated with honors, receiving two Bachelor of Science degrees (in electrical engineering and computer science). At Princeton University, he was elected to Tau Beta Pi, the oldest and most honorable engineering society in the United States.

The honor of being a member is always given to the best engineering students who have demonstrated certain academic achievements, as well as professional and personal integrity. At Princeton University, Jeff also became the head of a group of students involved in space exploration.

As in his studies, career success did not come to Bezos by accident - it was the result of long and hard work. After graduating from university in the 1980s, he worked on Wall Street, specializing in computer science. Next, Jeff began building an international trade network for Fitel.

The next place of work was Bankers Trust, one of the largest American banks. Bezos later also served as vice president at D.E. Shaw & Co. – the most famous global investment management firm in New York, founded back in the 80s of the 20th century.

The future Amazon company was founded by Jeff at the age of 30.

He wrote the business plan for its creation while traveling cross-country from New York to Seattle. Initially, the new company was founded in a garage. He decided to leave his high-paying post in New York after Bezos became interested in the rapid growth and development of the Internet.

Around the same time, the U.S. Supreme Court ruled that sales would not be taxed in states where they "do not have a physical presence." The new company was named Cadabra.

In September 1994, Bezos purchased the URL Relentless.com. For some time he had been thinking about calling his store Relentless, but friends told him it wouldn't sound very friendly.

Looking through the dictionary, Jeff finally made up his mind: he decided to choose the name after the Amazon River, by far the “largest” river in the world. This name was not chosen by chance: the aspiring businessman wanted his store to become the largest on the globe.

The Amazon also seemed to Jeff to be an “amazing and exotic” place, different from all others. The aspiring entrepreneur wanted to see his store the same way. As for the domain he purchased, it is still owned by Bezos and still redirects to the seller. In 1995, the company began operating online as Amazon.com.

While working on creating a brand, Jeff gave an interview in which he told a reporter:

“There is nothing that cannot be copied over time. But you know, McDonald's was copied. And it is still a huge, multi-billion dollar company. A lot appeals to the brand name. Brand names are more important online than in the physical world. Also, a name that starts with "A" has benefits due to the fact that it will be at the top of any list compiled in alphabetical order.”

On June 19, 2000, the company's logo featured an orange curved arrow from A to Z in the shape of a smile, symbolizing each product in the alphabet. Before this, the corporate logo changed several times. Since Amazon initially positioned itself only as a store specializing in selling books online, the logo initially symbolized the book trade.

After reading a report on the future of the Internet, which showed a projected annual growth of 2,300% in web commerce, Bezos came up with a list of 20 products that could be sold online.

As a result, he reduced this list to the 5 most promising, in his opinion, items: CDs, books, computer equipment, videos and software.

Finally, he decided that his new business would focus primarily on selling books online - due to the high demand for them around the world along with low price points and a large number of titles available in print.

The idea for a new online bookstore was actively discussed by Jeff with John Ingram of Ingram Book (now Ingram Content Group) and Keur Patel, who still owns a stake in Amazon.

Collaboration with Ingram allowed access to books in bulk. In the very first months of its existence, Amazon was already selling products in all states and several dozen countries.

Within two months, Amazon sales grew to $20 thousand per week. And while the largest bookstores, as usual, could offer 200 thousand titles, the online store was able to break their records several times. And this is not surprising, because the virtual warehouse was virtually unlimited.

The year after Amazon was founded, the first book was sold on the company's website. It is symbolic that this turned out to be a book by the famous computer scientist and physicist Douglas Hofstadter. In the fall, the company announced itself to the general public. The first public sale of securities took place two years after its founding. Trading was conducted on the NASDAQ exchange at a price of $18 per share.

Initially, the company's business plan seemed very unconventional; it wasn't even designed to make a profit in the first four or five years. Such “slow” growth caused dissatisfaction among shareholders, who complained that the company was not worth the investment and would not be able to survive in the long term.

When the so-called dot-com bubble, formed as a result of the rise in shares of electronic companies, burst at the beginning of the 21st century, Amazon survived and expanded even amid the destruction of many similar companies. Soon it was already a major player in online sales.

At the end of 2001, the company's profit was $5 million, and total revenues were over $1 billion. Although this figure is considered extremely modest, it proved to skeptics that an unconventional business model can also be very successful. In the late 90s, Bezos was named Time magazine's Person of the Year. At the same time, the success of his organization in distributing online stores was noted.

Two years earlier, the largest American bookseller sued Amazon, arguing that the latter could not be the largest bookstore in the world. They were not even considered a store at all - rather brokers, intermediaries in the world of bookselling.

The dispute was later settled peacefully outside the courtroom. However, the troubles did not end there. The following October, the company was sued by retailer Walmart, accusing it of stealing trade secrets by hiring former executives.

Although the dispute was also resolved outside the courtroom, the situation forced Bezos' team to introduce certain restrictions and reassign some employees. In a few years, Bezos' firm will be able to surpass Walmart as the most valuable retailer in the United States by market capitalization.

Amazon owns more than 40 subsidiaries, including Audible.com, Brilliance Audio, cloud-based digital comics service ComiXology and the Goodreads website. All customers and users can leave reviews on the web page of each product of the brand.

In 2010, the company was noted as the largest source of consumer reviews on the Internet. When publishers asked Jeff why he agreed to publish negative reviews, he defended the practice, arguing that the truth should not be lost.

On January 31, 2013, Amazon experienced a power outage that lasted approximately 49 minutes, leaving the site unavailable for some customers.

Over the ten years of its existence (2000-2010), the company has built up a customer base of about 30 million people. Amazon primarily generates revenue from sales through its retail website Amazon.com - although the percentage of each item sold is small. In addition, it allows you to advertise your products to others.

In 2014, the company announced its first smartphone, the Fire Phone, a smart mobile device with a number of attractive and unusual features. The device can be pre-ordered on the Amazon website. A partnership with Twitter was also announced.

As of 2016, Jeff Bezos' salary is $80 thousand. He is married to MacKenzie Bezos, and together they have four children.

If you regularly read articles on our website, you may have noticed that we devoted a sufficient amount of material to the online auction eBay. Its popularity all over the world could not leave us indifferent. Every day, tens of thousands of netizens search for answers to various questions regarding eBay. And we tried to consider many exciting moments, suggesting how to behave in a given situation.

Today I would like to start a series of articles that will be dedicated to the world's largest and most popular online store, Amazon. If eBay is known to many in the CIS countries, and tens of thousands of people have already made purchases and sold their goods, then Amazon remains such a “dark horse”, with a lot of unknowns. How to work on Amazon? How to shop? How does delivery work? What are the pitfalls? Is it possible to purchase through bank cards in Russia and Ukraine? There are a huge number of questions, and further, in many of our articles we will gradually give answers to them. In this article we will talk in detail about Amazon, consider its pros and cons, so to speak, we will make a short description of the online store.

For many, this may be their first acquaintance with Amazon, so we won’t write much, we’ll talk briefly and to the point.

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The history of Amazon begins back in 1994, when a young but promising entrepreneur Jeff Bezos (then he was 30 years old) decides to leave his old job and invest money in his own project. The Amazon website was launched with major flaws. Users could order a negative number of books, and this was not the most serious flaw. Jeff later admitted that they took this step to get ahead of the competition. After all, at that time online stores were just developing, and whoever entered the market first had a huge advantage. So Bezos and the team decided to show the world the unfinished Amazon website, but at the same time immediately take the lead.

An interesting fact: initially, the Amazon online store sold books exclusively. A few years later, the range began to expand. Users could already buy CDs, videos, games, electronics, furniture, food, clothing, etc. Now Amazon is the largest and most famous online store in the world. There are hundreds of thousands of different products presented here. As one of our friends says: “from socks to a submarine.” And indeed it is. Perhaps this online platform can offer you everything you want.

Everyone knows the advantages of online shopping. You don’t need to spend hours wandering around huge shopping centers in search of the right product; everything can be found in a few clicks. It will also be easy to compare products, read their characteristics, user reviews, look at photos, video presentations and much more. Now imagine that you have entered a huge online supermarket that can offer you tens of thousands of different products for every taste and color. Amazon is just such a supermarket.

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Amazon is an international company that is not limited to just a representative office in the United States. It is clear that the first office appeared in the states, and from there the victorious march began around the world. Amazon now has a presence in 6 countries: Germany, Japan, Canada, China, France and the UK. But the most popular is the Amazon website in the USA. Branch sites have some differences. Firstly, each of them has its own interface language. Secondly, prices in different branches may vary. There are also different prices for delivery of goods. Before making a purchase on Amazon, it is better to visit all branches and choose the best offer based on your region of residence and the method of delivery to your country.

Amazon is not an online auction, and if you buy goods here, you do not risk anything. Unlike eBay, Amazon guarantees the quality of the product and its timely delivery. Many novice users of an online store do not always understand who the seller is on Amazon. There can be 2 options: either the company itself, or individual sellers who get this opportunity for a small fee. A distinctive feature of Amazon is that all sellers undergo strict verification and control, and Amazon takes responsibility for their activities. Therefore, if you buy a product in an online store, but see that the seller is a third party, then do not worry, because he will fulfill all the conditions for delivery and quality of the product no worse than Amazon itself.

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Just a few years ago, active Internet users in Ukraine, Russia, and other CIS countries discovered the fascinating world of shopping on Amazon. This is understandable, because abroad you can buy many goods much cheaper than in your own country. And the build quality of the same technology is an order of magnitude higher. It's no secret that all equipment is assembled in China, but different factories assemble it for different markets. For the USA and Europe there is one quality, because there is stricter control and legislation on consumer protection, for the CIS market it is completely different. So it turns out that sometimes it is more profitable to buy from Amazon, while the quality is better and the product is cheaper.

Benefits of shopping on Amazon

As you already understand, Amazon is a huge online store that has representative offices in 6 developed countries in Europe and Asia, as well as a main office in the USA. Many may ask themselves the question, why should you buy from Amazon, what are the advantages of Amazon over other online stores and trading platforms. And they certainly exist. And now we will talk in detail about the advantages of Amazon.

• The first, and not least, advantage of Amazon is the variety of products. This is not just an online store, it is an online supermarket, with hundreds of thousands of different products. Here you can find everything: books, equipment, electronics, clothes, cars, jewelry and many other “interesting things”.
• Quality and reliability. Amazon has a huge reputation all over the world. This is a company with a name and almost 20 years of sales experience. Rest assured that the product you buy on Amazon meets all quality standards.
• Although there are many products, they are clearly divided into different categories. Searching through these categories will not be difficult. You will say that all online stores have a structure, but Amazon has implemented this especially clearly. Even if you are a beginner and have visited the website of an online store for the first time, you will most likely not get confused in navigating it and searching for products.
• Representation in 7 countries, including the USA, is also an advantage. You can choose the store that is optimal for you, which offers the best prices and delivery conditions.
• There are many promotions and special offers that allow you to buy a good product at a very reasonable price. Such promotions are not uncommon, and updates occur every day.
• Full description and customer reviews. It is very important not only to read the seller’s description, because he will always praise his product, but also to read the customer comments. It is the comments of those who have already used this product that will tell about its quality and reliability. There are more than enough such comments on Amazon.

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That’s probably all we wanted to tell you about one of the most popular and famous online stores in the world – Amazon. We are sure that those of you who have not yet made purchases on Amazon will use the services of this company and discover the world of online shopping in foreign stores.

The most interesting thing is that all these unrelated lines of business are only a small part of everything that Amazon and all its many divisions are currently doing. This begs the question: why do they need all this?

The fact is that Amazon has dabbled in different parts of the tech business since its inception, based on its long-standing philosophy of "growth before profits." Gradually, the company became not only the world's largest online retailer, but also a developer, manufacturer and seller of devices under its own brand, etc. Some initiatives, such as the cloud computing service Amazon Web Services, turned out to be very successful. Others - not so much.

But Amazon has always differed from its competitors in one way. At key moments in business development, Amazon management understood that those technologies that had proven themselves within the corporation would soon become in demand throughout the market. And this understanding has led the company to success more than once.

“Along with building the world's largest online retailer, Amazon has opened up several previously unknown market segments where no one had gone before,” said ChannelAdvisor CEO Scot Wingo. - And having made these discoveries, the company unexpectedly decided to tell everyone about them and let competitors into these segments. In the conditions of the previous, offline market, such a decision would have seemed crazy. Companies cherished such discoveries as valuable assets that gave them a strategic advantage.”

By allowing other companies to take advantage of new markets, Amazon has actually created a cycle of success for itself and its business customers. Thus, Amazon became not only the “everything company,” but also the “everyone company.”

Golden clouds

Amazon cloud services can rightfully be called “golden clouds.” The first version of the cloud platform was presented to the public back in August 2006. The service was called Elastic Compute Cloud (EC2). It provided users with virtually unlimited computing power, which could also be supplemented with the S3 service - unlimited data storage. These two services form the basis of the current Amazon Web Services platform.

As journalist Cade Metz wrote in 2012, “the story behind EC2 is as convoluted as the plot of Akira Kurosawa’s Rashomon.” He believes that the real reasons why Amazon management decided to make the cloud service publicly available are unknown. But soon the company’s management realized the potential of the cloud service’s wide computing capabilities and began to make the first profit from its solution.

And just six years after its launch, the company's cloud computing infrastructure was estimated to already be running 1% of the entire Internet. In April of this year, the company for the first time announced financial performance of its Amazon Web Services division. The turnover of this business line amounted to $4.6 billion.

According to Amazon's latest earnings report, the company's cloud business posted growth of 81.5%, or to $1.82 billion, which accounted for 8% of total revenue for the quarter. The company's unexpectedly strong profitability in the second quarter was also partly due to the strong performance of the new division. During a user conference, Amazon Web Services Senior Vice President Andy Jesse said that the company's cloud division's revenue could be even higher than originally expected. According to his forecasts, about a million corporate users of the platform will bring the company $7.3 billion in revenue.

Meanwhile, major competitors - especially Microsoft - are trying to keep up. And while Amazon's $7 billion-plus future profit is a significant amount, it's still only a fraction of the $200 billion the cloud market is expected to reach by 2020, according to Forrester.

However, Amazon's cloud service is still unrivaled. “[The company's cloud services] have grown 100% or more in just one year,” says Forrester senior analyst Jeffrey Hammond. - All they need now is to double the volume of business again, and then they will reach a turnover of 15 billion dollars. I think the company will reach this figure in the next two years. And it’s not far from 20 billion.”

The strong start that Amazon's cloud business has shown is bringing the company dividends of a different, non-financial nature. For example, this is a good application to enter the mobile technology market. Although the Fire mobile phone experiment ended in failure, Hammond believes the company can count on numerous iOS and Android app developers who prefer to use Amazon Web Services for data storage. "Amazon has no competition in this area yet - it's superior mobile infrastructure," says Hammond.

Third parties

In addition to its developing digital infrastructure, Amazon has another less obvious advantage - physical infrastructure, namely the company's network of fulfillment centers, which ensures work with third-party companies. According to Scott Wingo, "If it weren't for all those fulfillment centers, Amazon wouldn't be Amazon."

Many average shoppers may not even realize that everything they order from Amazon is actually purchased from a third party. Amazon, in fact, is just a counter on which all these goods lie. Manufacturers store their products in Amazon warehouses using a program called Fulfillment, and delivery is provided by another program called Amazon Prime.

And this is another area of ​​the company’s activity that brings in billions.