Monday, November 13, 2006

Amazon's Risky Business

A lot of people seem to be wondering just what Jeff Bezos is doing with Amazon. BusinessWeek has the scoop on Amazon's services play that has been evolving over the past few years. Amazon is betting that it can turn the powerful infrastructure that runs its online retail store into a services offering, and in so doing, make a play as a utility company of the internet. Think of it as Amazon wanting to be the equivalent of the electric, water, gas, etc., company for your home and business. They've had to develop the infrastructure for their online store, with excess capacity to handle the spikes in their business -- most of the time however, a fair bit of that capacity sits idle. What Amazon is going is turning their excess capacity, which more or less is the utility for online businesses, into services they can sell. It's catching on -- slowly -- and if Bezos' bet pays off, the long term windfall will be huge.

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