Interviews with Digital Media Thought Leaders
A Hidden Asset at Amazon.com
Podcast Audio | Posted by Phil Leigh on August 11, 2008
Are stock analysts overlooking one of the most important assets at Amazon.com?
Our guest today is Shelly Palmer who is the author of Television Disrupted. He is also a noted blogger and podcaster in the field of New Media. In a recent post Shelly observed that Amazon Web Services (AWS) may be one of the most important factors that will enable small companies to move into the era of “Cloud Computing”.
Eleven years ago, when I was working as a stock analyst, my employer engaged a prominent professor from a leading business school to lecture our staff about his discoveries in researching the characteristics of successful companies. One basic finding was that industry leaders invariably constructed “barriers to entry” that held competitors in a subordinate position.
In one lecture he urged us to consider whether an “Internet” company could ever build such barriers. By way of example, he questioned whether Amazon.com possessed anything that Borders and Barnes & Noble could not easily duplicate. Like many experts who rely upon historical analysis, he failed to recognize that what is new is sometimes more significant than what is familiar. Put more harshly, we should not let our epitaphs read “Died age 50, buried age 80”.
Today, the stock analysts covering Amazon.com may also be failing recognize the value of an important mutation in the evolution of the company. Specifically, Amazon.com is making its demonstrably robust web infrastructure available to independent companies on a “pay as you go” basis. Much like individuals can sell books at Amazon on consignment, podcasters can now host their media files on the Amazon web servers and pay a modest metered price for reliable content delivery. Similarly, they can use the computing power of the Amazon computer grid for processor-intensive work that their own computers may not be able to do efficiently, or even at all.
Phil’s Take: Amazon Web Services is a concrete platform that even small companies can use to move into the new paradigm of Cloud Computing. Just as Sun Microsystems’ earlier mantra of “The Network is the computer” described the rise of LAN computing, Cloud Computing amplifies the concept to the nth degree and applies it the entire Internet.
Signing-up for Amazon Web Services is easy because, by default, the company will bill us for services used on the credit cards we already have on file. Finally, it is thought that AWS will be highly profitable for Amazon, much like the fees collected from consignment sellers of books who must finance their own inventories and pay the shipping charges themselves. The Amazon web infrastructure is largely a fixed cost thereby enabling most of the AWS fees to flow directly to the bottom line.
Categories: Podcast Audio
Tags: Amazon Web Services, Amazon.com, digital media, Future of Television, Internet video, podcast, podcasting, Shelly Palmer, Television Disrupted
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[…] lot of great interviews with people involved, directly and indirectly, with digital media. His most recent podcast interview is with Shelly Palmer, author of Television Disrupted. This interview focuses more on Amazon Web […]