The strategy that Amazon is using to stay successful is by offering more than just the opportunity for consumers to purchase books. By offering a storage device option, consumers are able to purchase storage space and only pay for what they use rather than pay extra for a service or space not being used. Much like Google and Microsoft, Amazon is trying to move away from their basic services and really get more engaged with additional consumers by offering more options. This strategy that Amazon is using is one that will allow them to gain a bigger customer base and maybe continue accounts from customers that were tired of the same old services, and nothing additional being offered. Amazon is not moving away from its core competency of being a leading online retailer, instead, their position as a leader will allow them to stay in that position, with the new services being offered.
The components of the new services being offered by Amazon include; Simple Storage Service (S3), “which charges 15 cents per gigabyte per month for businesses to store data and applications on Amazon disk drives” (Rainer & Turban, 2009, p.26). Another component is the Elastic Compute Cloud (EC2), which Amazon can rent out processing power to consumers for only 10 cents per hour. The last service that Amazon is now offering is the Mechanical Turk. This service allows businesses to post images or audio, and people (who are getting paid) from being a part of the social network, can recognize any images or audio that may have inappropriate content (Rainer & Turban, 2009, p.26).
With every new service and upgrade for a business, there are also data management issues that may be encountered. By adding external users, Amazon risks the chance of important information being hacked by a user that has access to posting or contributing to storage and/or management of the services through the network. Another big issue is about the instances when the storage system may have an outage and customers all over will become irritated by the outage and Amazon will have to make sure they have the technical support to keep it running without issues. Too much external use/demand may cause the outage and in turn may lose customer base.
Rainer,R. K., Jr., & Turban, E. (2009). Introduction to information systems: Supporting and transforming business (2nd ed.). Hoboken, NJ: Wiley.
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