by winston » Tue Nov 13, 2018 10:47 am
not vested
Amazon.com (AMZN)
If I were asked to guarantee a great long-term technology bet back in 1978, I might have said Digital Equipment Corp., whose CEO, Ken Olsen, famously (although misquoted) said the year before, “there is no reason for any individual to have a computer in his home.”
He was speaking, however, of massive computers that control everything in the home. Today, Amazon is attempting just that.
The PC industry has since risen and fallen. When we talk technology today, we talk of clouds and devices, neither of which existed, as such, at the start of the twenty-first century. Mostly today, we talk of the cloud.
Of all the companies I call “Cloud Czars,” the one with the brightest future appears to be Amazon. That’s because its business is highly diversified. It uses the cloud in retail, in media, in computer services and it’s going to be in banking and healthcare.
Amazon represents an essential infrastructure for modern life, cloud computers and scaled fulfillment centers. Tens of thousands of companies depend upon Amazon to compete with companies like Walmart (NYSE:WMT). In any move to break up Amazon, these merchants would rise as one and stop it.
Amazon, of course, was only supposed to be an online bookstore at its founding in 1994, competing with larger, physical bookstores such as Portland’s Powell’s Books. But CEO Jeff Bezos saw new opportunities and took them, usually with an eye toward re-selling access to the infrastructure he needed to sell them.
That’s where Amazon Web Services, the company’s chief profit driver, came from. Amazon needed scaled, reliable data centers to run the online store, and found it could build more by re-selling the capacity, while larger competitors like Google, now part of Alphabet (NASDAQ:GOOGL), were keeping those resources to themselves.
It was already selling access to its physical warehouses as well as its financial and delivery infrastructure. Genius is often what seems obvious at the time.
The problem here, of course, is that no one lives forever. I can’t promise that Bezos’ successors will be as quick-witted as he has been, that they won’t stumble or go down blind alleys.
Source: Investor Place
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