Amazon AMZN had a big week with government issues, a host of new deals and announcements at its annual conference and developments in India. Here are the details-
After losing out to Microsoft MSFT in the Joint Enterprise Defense Infrastructure (JEDI) cloud contract and suing the pentagon for a politically motivated selection process, Amazon founder Jeff Bezos has come out with statements seeking to bridge the gap with the government.
"We are going to support the Department of Defense, this country is important," Bezos said at an annual defense forum at the Reagan Library in Simi Valley, California. He also said: "My view is that if big tech is turning their back on the Department of Defense, this country is in big trouble."
Actually, the only one of the big tech companies that’s on the wrong side of the defense department is Amazon, which was mainly because of the sour relation between President Trump and Jeff Bezos, although he may have been referring to the way the government is investigating Apple AAPL, Alphabet GOOGL, Microsoft and Amazon on privacy, security and anticompetitive concerns.
But since everyone knows that there’s a lot of money to be made from the government, technology companies are likely to play ball. Bezos is probably making a point that Amazon’s lost deal notwithstanding, it’s able and willing to accept other deals the government might offer. The government usually has a broad supplier base.
Separately, AWS has partnered with FINRA CAT LLC, a subsidiary of the Financial Industry Regulatory Authority, in a mega deal spanning 22 stock exchanges and 1,500 broker dealer firms, intended to facilitate government oversight of U.S. securities trading.
Amazon’s retail business is in a bit of a problem as the U.S. Trade Representative's Office is considering putting some of its international websites on its annual "Notorious Markets" list. This was prompted by the American Apparel and Footwear Association (AAFA), which has now, for two straight years, requested the USTR to take such action because of the number of counterfeits on those platforms. Amazon’s response has been that it has invested $400 million and acquired 5,000 people in 2018 to fight fraud and counterfeiting.
Additionally, it has come to light that the Federal Trade Commission (FTC) has broadened its scrutiny of Amazon’s business practices to include AWS. The FTC is reportedly in conversation with AWS’s software partners to determine whether the company is engaged in the anticompetitive practice of discriminating against these providers when they offer their services to rivals or when their products compete directly with one or more of Amazon’s own offerings.
Democrat candidate Joe Biden is looking to impose a 15% tax on companies like Amazon with over $100 million in annual net income and raise the corporate tax rate from 21% to 28%. He proposes to use the increased income to fund initiatives like climate change, infrastructure needs, health care and higher education.
At its annual re:Invent conference, Amazon announced a slew of deals:
Verizon: The company’s deal with AWS allows it to enable cloud services for Verizon Edge customers. Developers using AWS Wavelength and Verizon 5G Edge will deliver transformative, latency-sensitive use cases like machine learning inference at the edge, autonomous industrial equipment, smart cars and cities, Internet of Things (IoT), and augmented and virtual reality.
Vodafone: The deal with Vodafone is similar, using Wavelength to deliver compute and storage services at the edge of Vodafone’s network. Deployment will begin in the UK and Germany and then expand to other EU countries.
Fox: Fox has entered into a multi-year deal to use AWS Media Services to transmit Fox sports, news and entertainment content to its cable TV and streaming customers. Its production facilities in LA, New York, Tempe, Arizona and Charlotte will also use Amazon tools.
Specifically, Fox is deploying Amazon’s Outpost, a server rack product that was announced last year and went on sale last week, to bring AWS services inside its own data center. It is also using AWS analytics services, including Amazon Kinesis, and machine learning services such as Amazon SageMaker to enhance live video streams and enable a real-time data capabilities.
Cerner Corp: This health tech company will migrate its core applications to AWS where it will standardize its AI and ML workloads using AWS ML, analytics and Internet of things (IoT) services with the goal of enhancing patient care experience, improving health of populations and reducing per capita healthcare cost.
Novartis: The strategic collaboration with Novartis is designed to reimagine/reinvent pharmaceutical manufacturing, supply chain, and delivery operations using AWS’s portfolio of cloud services and analytics.
Other Important Takeaways from AWS re:Invent Conference
Amazon Sagemaker got six new capabilities to help development of machine learning (ML) models: Amazon SageMaker Studio, which is the first integrated development environment for ML to build, train, explain, inspect, monitor, debug, and run ML models from a single interface; elastic notebooks to run or recreate a machine learning workflow; experiment management; debugging and profiling; automatic model building and concept drift detection.
Amazon introduced the second-generation of its Graviton chip built on the latest ARM technology. The first generation was only launched last year, so this is a very quick development cadence (though the release date wasn’t mentioned). Amazon’s focus in the area is intended to replace/reduce its reliance on Intel INTC and Advanced Micro Devices AMD server processors. The chip is capable of handling some Amazon processes and also powering some of the services it’s offering customers. It comes from the 2015 acquisition of Annapurna Labs.
There were three security offerings: AWS IAM Access Analyzer (an identity and access management tool, available today); Amazon Detective (for more efficient and quick investigation of security issues across customer workloads, available in preview today); and AWS Nitro Enclaves (allowing EC2 customers to isolate highly sensitive workloads by separating compute and memory, will be in preview next year).
There were many other announcements intended to establish Amazon’s leadership and prowess that sets it years ahead of its fast-growing competitors. Independent research estimate that the number two player, Microsoft generates about half of Amazon’s revenue and Alphabet generates a quarter. So it may not be incorrect to say that they are playing catchup with independent development, acquisitions and price wars.
Amazon has launched an India-specific smart speaker called Echo Input. Its only major difference with the Echos as we know them is its portability, which is apparently of great importance in India. So the device comes with a 4800 mAh in-built battery and doesn’t need to be plugged in all the time. It can do ten hours of playback on a single charge.
Around 70 million Indian shopkeepers are protesting the way online sellers like Amazon and Walmart’s WMT Flipkart are stealing sales. They claim that online sellers clocked huge sales during the Diwali festive season, while they saw declines and that this couldn’t have been done using fair means. And since many small businesses (the ones the government tried to protect with recent changes to ecommerce laws) are going out of business, they are demanding an investigation into deep discounting and other practices followed by ecommerce giants.
Online sellers like Amazon claim that they are merely marketplaces for smaller third-party sellers and that while they indicate to their sellers what prices will fetch the most sales, the final decision is left to those sellers. Amazon private label products do sell on the platform though, so it isn’t clear what mechanism it’s using for the workaround.
Commerce Minister Piyush Goyal has announced an investigation and another government official indicated that a dedicated e-commerce regulator may be in the cards.
Amazon has announced three new renewable energy projects in the U.S. and Spain that will enable it to meet 80% of its needs with renewable energy by 2024 and the 100% target by 2030 on its path to net zero carbon by 2040.
“Earlier this year, we announced The Climate Pledge, setting a goal to meet the Paris Agreement 10 years early and be net zero carbon by 2040,” said Kara Hurst, Director of Sustainability at Amazon. “We’re committed to investing in renewable energy as a critical step toward addressing our carbon footprint globally.”
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