Amazon is a great business, while certainly for books, or CDs, and may be even as a ‘mall’ for other smaller speciality retailers who want to sell to the market using Amazon for both the technology and the store front. All these activities are connected with Amazon’s core business and any respected financial analyst seems to think that an essential feature of modern business is to ‘stay focussed’. So is it still part of the business model to become an Application Services Provider, or ASP, and if it is, won’t every business start to offer its software capabilities as an ASP model, and what does that do to the Software and Services industry?
Some years back Amazon started to publish an XML support service to help people who wanted to link to its site to do it better, a good and smart move. Now a clutch of further services is being offered making Amazon’s in house technology capabilities available externally as hosted services based on usage charging with no up front cost. Looking at the services more carefully reveals that the first service around the provision of storage is in fact a hosting operation and Amazon’s comments about utilising its assets better seem to be sensible. However Amazon doesn’t seem to know the market prices, its too cheap, until you realise there is no service level contract. Well may be for off line archiving it’s a possibility. The second is in beta and really moves towards being a ‘services’ provider using an ASP model to offer a Message Queuing Service for distributed applications, or Web Services.
It’s the third service that is either an inspired breakthrough in Business thinking or a frightening move, as the AOL adverts say; discuss! Called the ‘Mechanical Turk’ (look it up on Google for the reason!), it ‘harnesses human efforts via a web API’. The business proposition is that companies electronically submit tasks and human workers from all over the world carry out the tasks. Amazon claim that ‘thousands of workers from 125 countries have signed up, but the pay is low and the professional contractors don’t seem to be in their numbers. This is a Business Process Outsourcing model, but again without the service level contracts, or managed capabilities, and at rates that under cut any professional provider that does provide these, and more, to ensure the quality of the results.
Has the IT industry really got to such a level of commodity that it’s now fine to employ a network of home workers in low cost economies in the same manner as making dolls, or T Shirts? Interesting question, but it’s also tied to the question of Amazon’s business model, or for that matter any other global enterprise with a visible brand. Do you ask your customers to become your workers, and if so do you ‘sell’ them as services in areas that are not part of your business model? If so, are all customers of General Motors ‘On Star’ in car telematics system just about to become delivery couriers, and undercut the established market? So have Amazon made a Business break through, or are they running a dangerous experiment?