Amazon launches a web services subsidiary aimed at retailers
Amazon.com Inc. today made official a service it’s been offering to retailers for some time: Amazon launched a new subsidiary, Amazon Services Inc., to sell the technology and services that power Amazon.com to other retailers seeking e-commerce systems.
Amazon Services provides retailers a turnkey, outsourced e-commerce solution that incorporates Amazon.com`s shopping features and technology, while allowing retailers to control the look and feel of their web sites. Amazon technology already powers Target.com, ToysRUs.com, Borders.com, CDNow.com and the online stores of NBA.com and WNBA.com. Amazon Services also helps retailers offer their merchandise to millions of Amazon.com customers through the Amazon site.
"Amazon Services offers retailers the opportunity to tap into our industry-leading shopping experience," said Jeff Bezos, founder and CEO of Amazon. "These retailers can grow their online businesses faster and less expensively by taking advantage of what we`ve learned and built over the past eight years, while still preserving 100% of their own branded look and feel."
Amazon began making the technology available to other retailers four years ago. “Now it`s about 20% of our business and it`s the fastest growing part," Bezos told the Retail Systems Conference in Chicago Tuesday. "It looks like Target, it looks like the NBA, but it`s Amazon under the covers."
Bezos said that at first, Amazon thought the biggest advantage it had was being the first mover. "So initially when we thought about sharing the technology we thought, why level the playing field?” he recounted. “But as we thought more, it became clear that online would remain a tiny piece of retail. So one way to make ourselves even more successful would be offering our technology to others."
He said retailers who use Amazon`s technology like the fact that Amazon uses the same technology for its own online store. "There are no special versions; all the partners operate on the same platform," he said. "Our partners like the fact that we eat our own cooking."
In response to an audience question, Bezos said that if current trends continue, the business of making its technology platform available to other retailers could become the majority of Amazon`s business.
Amazon reports that it invests more than $200 million per year in developing technology and the web site.
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