Amazon Research Case Analysis
- Amazon’s journey to building a Digitized Platform to support the company strategy and business agility
Amazon has had an incredible journey in building a digitized platform supportive of the company’s progressive growth and business agility. In its current state, Amazon can be categorized under the digital master’s level. This is a position taken by firms that have both superior digital capabilities and leadership capabilities. The digital master’s position is notable in the way Amazon is exploiting its digital advantage to create superior competitive advantages. According to Westerman, Bonnet and McAfee (2015), the journey to digital mastery transposes through three main parts. The first part of building a digitized platform that supports agility and company strategy is by building digital capabilities. This part is further grouped into three sub-sections namely; creating a customer experience that is compelling, exploiting the inherent power of core operations, and reinventing the business model. The second part of building a digitized platform is by building leadership capabilities. Westerman et al. (2015) emphasize that leadership is the second most important element of becoming a digital master. In the case of Amazon, Jeff Bezos begun by crafting a vision for the company. The vision enabled Amazon to achieve higher levels of engagement. The vision further governed the continued transformation of the firm to the desirable position that the firm currently enjoys.
The process of building capabilities is by integrating technology to optimize the leadership capabilities. Realizing these objectives paves way for the third part of building a digitized platform. This part focuses on upgrading the back office (Westerman et al. 2015). Amazon made sure to align its digital platform to its playbook dictating an intended digital transformation. The process begun with the framing of a digital challenge, focusing investment on business activities that optimized returns on investments, mobilized the organization into being more productive, and lastly, the management has consistently made sure to sustain the digital transformation by being the market leader in innovating new business processes. The effectiveness of Amazon’s journey in applying these steps to build a digitized platform is seen in the way the firm started as a dot.com era company selling books online. It quickly grew its IT architecture and introduced agile business strategy thus creating a successful business. It has since extended its range of goods and services and begun hosting independent retailers. A significant milestone was the launch of Amazon Web Services in 2006. This service enabled Amazon to capitalize on advanced IT capabilities thus succeeding in building the largest cloud computing platform.
- Approaches based on IT-enabled technologies Amazon uses to help reach and retain customers
Amazon understands the importance of creating and sustaining an effective customer experience. The introduction of digital platforms has increased competition among firms, thus creating a superior customer experience is essential to sustainable competitive advantages. In the case of Amazon, the company makes deliberate steps to satisfy the customer. It places the customers’ needs over that of all the other stakeholders. In return, the business creates value. Introduction of IT-enabled technologies has enabled Amazon to better manage the customer experience. The firm uses IT technologies to collect customer data, reduce service and operation costs, and design more effective branding messages and launches, while also enabling marketing. Weill and Ross (2011) explain that Amazon uses varied approaches based on IT-based technologies to reach and retain customers. The company has automated 91% of its customer interaction facets. It has done this by investing in broad categories of technologies believed to impact the customer experience. This includes customer facing technologies such as interactive voice recognition (IVR), customer relationship management (CRM), and the use of mobile self-service applications.
In addition to these IT-based technologies, Amazon uses additional customer touch points such as billing, dispute resolution, complaint monitoring, and incorporated technologies that consistently access the customer experience and recommend innovative services and products to improve customers satisfaction levels. As much as IT-enabled technologies are useful in reaching and retaining customers, McKeen and Smith (2015) criticize the use of such technologies in firms like Amazon since at times, they have been used to replace human workers as a cost saving strategy. Instead, the technologies have failed to provide the personal touch desired by customers. The authors therefore propose that the best way forward for Amazon is to invest in effective architecture that provide a holistic approach in addressing all the customer concerns. Some of the essentials for reaching and retaining customers using IT-based technologies include visioning, customer focus, designing technologies for utilization, managing data, and delivering value.
- Scale and Variety of Amazon Web Services (AWS)
AWS is the most comprehensive cloud based platform in the world. It offers more than 175 serves including storage, computing, and databases. The top users of AWS services include; Apple, Netflix, Twitch, LinkedIn, Facebook, BBC, ESPN, Baidu, and BBC (Mendi, 2020). The Amazon AWS website documents that its customer uses AWS EC2 auto scaling to monitor the customer’s applications and spontaneously adjust their capacity to achieve a steady and predictable performance at the lowest costs. Auto scaling enables users to set up and scale multiple resources in a short time (Mendi, 2020). According to Amazon, scaling makes it simple to optimize performance and costs. Users of Amazon EC2 auto scaling can easily combine AWS Auto Scaling to other IT-enabled technologies to ensure effective management of resources.
Amazon provides varieties of AWS services. The ten most used services are discussed as follows. The first service is Amazon S3. Amazon S3 AWS is an abbreviation for Amazon Simple Storage Service. Amazon S3 service allows its users to upload, download, store, and retrieve large file of 5 TB from their cloud storage. This service is preferred for its scalability, high-speed web-based services, and low cost. It is specifically designed for online backup and archival of application data and programs. Users also have control over their private and public accessibility of data. The second service is Amazon EC2 or Elastic Compute Cloud (Mendi, 2020). This service provides computing capacity that is scalable. Users of this service can easily develop, deploy and use applications effectively and quickly at a low cost. The Amazon EC2 service can equally be used in launching virtual servers. The third service is AWS lambda. This service enables users to run codes without depending on a server. It executes codes only when needed and automatically scales. Users pay for the time used to compute, and the codes are not paid for when they are not running. Lambda supports codes written in languages based on Amazon Linux, Python, Java, and Node.js.
The fourth service is Amazon Glacier. It is considered an important service offered by AWS. It is an online storage service providing its users with effective low cost storage with archival, back up and security features. Users can store data for months, years, and decades. The fifth service is Amazon SNS. It is web service that represents Simple Notification Service. It delivers and manages notifications and services to users from cloud based platforms. The sixth service is Amazon Cloud Front which assesses the speed and effectiveness of a website. It further speed sharing of static and dynamic web content namely .html and .css files (Mendi, 2020). It can securely share data, videos, applications and messages between clients and users at low latency and high speed. Another important service is Amazon Elastic Block Store (EBS). It stores persistent data and can be used to transfer data from two or more instances without losing stored data.
There are three cloud based services, namely; infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS). IaaS facilitates internet based access to computing power and storage. It is the most basic type of cloud computing as it lets users rent suitable IT infrastructure, such as virtual machines, services, networks, operating systems and storage on pay-as-you-go model from cloud providers (Srivastava & Khan, 2018). PaaS is used by developers to build, host and run their web applications. It is designed in a way to allow users access components required to develop web and mobile applications without having to manage infrastructure such as databases, networks, storage, and servers (Srivastava & Khan, 2018). SaaS is useful in delivering and accessing software applications using the internet. Cloud providers manage and host software applications making them easy for users to download on their devices.
- Cost of implementation of selected AWS services and how they would improve and innovate the current business experience
Amazon has more than 160 AWS services. Amazon charges differently for these AWS services. However the cost of hosting a website on AWS is varied based on usage. It costs $1-3 per month if the user is outside allowed AWS free tier limits. If within the limits, the user will incur costs of $0.50 per month. A more detailed breakdown of the monthly costs of using EC2 services are as follows. Amazon charges $0.013 per hour of use which is an equivalent of $9.50 per month. These charges are for people using on-demand t2 option in US East region. Hosting companies using high bandwidth are changed £666.80 or $ 849.84 per month for using AWS for 10TB traffic. AWS services provide varied benefits which subsequently improve and innovate the business experience. For instance, Amazon S3 provides scalable and high speed web-based services that are also affordable with an additional archival and backup of data and application programs. EC2 helps in developing and deploying applications effectively and quickly at a low cost, while AWS Lambda allows programmers to run and execute codes. All these functions contribute towards improvement and innovation of services thus a superior business experience.
- Core tenets of Amazon’s Internet of Things (IoT). How the AWS IoT platform works? Identify and describe AWS services for IoT solutions.
There are four core tenets of Internet of Things; agility, scalability, cost, and security. Agility refers to the ability for the users of IoT to efficiently quantify opportunities. The opportunities are derived from having reliable data, remote control and demand between devices and users, and remote diagnostics. IoT helps companies collect these sets of data and metrics which are exploited to identify opportunities. Scalability tenet refers to the ability for the IoT to keep up with the exponential growth of the business (Oladehin & Brett, 2017). The IoT solutions are required to continuously expand to handle emerging and growing business needs. The scalability should be applicable in areas such as data compliance and data sovereignty. The third tenet is cost. The greatest value derived from IoT solutions is its ability to send and generate contextual and telemetric data. Building the infrastructure for IoT requires purchasing hardware and other devices. It is recommended that IoT solutions use scalable and elastic cloud platforms to reduce costs. The fourth tenet is security. IoT solutions handle large and sensitive amounts of data (Oladehin & Brett, 2017). It is important that features are introduced to strengthen security of the IoT systems.
The working of an AWS IoT platform is dependent on a number of key features, namely; an AWS IoT device SDK, device gateway, message broker, registry, device shadow, authentication and authorization, rules engine, and Alexa Voice Service (AVS) integration. According to Amazon’s AWS (2020) website, the company’s AWS IoT works in the following ways. It works by providing device support and cloud services used to implement internet of things solutions. It provides cloud services that support IoT-based applications. The working of IoT is summarized in figure 1 (appendix) showing how the different components interconnect. For instance, IoT devices in homes, at work, in the community and mobile phone apps are interconnected to cloud services which store and archive user data (AWS, 2020). The data can then be retrieved and analyzed to inform business decisions. IoT services are dependent on the IoT architecture. A basic IoT architecture provides a range of services illustrated in figure 2 (appendix). They range from data services, control services, and device services.
AWS. (2020). How AWS IoT works. Retrieved from: https://docs.aws.amazon.com/iot/latest/developerguide/aws-iot-how-it-works.html
McKeen, J. & Smith, H. (2015). IT Strategy – Issues and Practices, 3rd Edition. Pearson, http://pearsonhighered.com
Mendi, U. (2020). AWS Services List – Top 10 AWS Services. Retrieved from: https://mindmajix.com/top-aws-services
Oladehin, O., & Brett, F. (2017). Core tenets of IoT. Amazon Web Services Whitepaper. Retrieved from: file:///C:/Users/user/AppData/Local/Temp/core-tenets-of-iot1.pdf
Srivastava, P., & Khan, R. (2018). A review paper on cloud computing. International Journals of Advanced Research in Computer Science and Software Engineering, 8(6), 17-20.
Weill, P. & Ross, J. (2011). IT Savvy – What Top Executives Must Know to Go from Pain to Gain, Harvard Business Press, http://www.harvardbusiness.org/press
Westerman, G., Bonnet, D. & McAfee, A. (2015). Leading Digital: Turning Technology into Business Transformation, Harvard Business Review Press, http://www.hrb.org/books
Figure 1: Illustration of how IoT works (AWS, 2020)
Figure 2: IoT services (AWS, 2020)