Amazon

Amazon.com is competing with Google and Microsoft to build a web-based, global competing platform which includes computing storage and the renting of processing power. Hardware has always been available as a service through dedicated hosting providers, but it was never so well abstracted until Amazon introduced S3 (Simple Storage Service) and EC2 (Elastic Compute Cloud) with dedicate hosting Amazon makes it painless. Amazon spends massive funds to obtain information superiority. Such efforts could represent new growth areas and smart diversification moves for the web giant. Or they could prove to be costly distractions. However, there is a big problem: Should a company stay focused on the core competencies and competitive advantages that made it great, or should it diversify to keep up with, or attempt to surpass, its peers? It’s one of the trickier questions facing Internet companies because the barrier to entry is so low for many online business models. Like a classical economics theory, companies should leverage existing expertise or assets into new businesses to generate returns. It’s extremely difficult to figure out what asset, such as customer relationships, product design or manufacturing prowess, to leverage. Meanwhile, companies need to balance the requirements of running their current businesses with the demands of operating new ones. In a fast-changing market, you must innovate and diversify to keep up, but on the other hand there are risks of diversifying too much. The opportunities are real. Amazon now generates millions of dollars in revenue from Amazon Web services but they still have to stay ahead of the innovation curve, and keep optimizing for growth. Amazon’s gamble is that its name recognition will help it garner additional sales in these new areas is a wise strategy

Amazon has many programs it uses to store customer data. Technological innovations is key. “Technological innovation drives the growth of Amazon, offering our customers more...