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Market Research Report

Webscale Playbook - Amazon: World's Biggest R&D Spender Continues to Invest Heavily in Networks as it Disrupts New Markets

Published by MTN Consulting, LLC Product code 753496
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Webscale Playbook - Amazon: World's Biggest R&D Spender Continues to Invest Heavily in Networks as it Disrupts New Markets
Published: September 27, 2018 Content info:

Amazon has evolved leaps and bounds since its creation. From an online bookstore more than two decades ago, it has become a global internet giant that relies heavily on scale and network infrastructure for its diverse businesses. At present, the company's businesses beyond e-commerce include physical stores, cloud computing, audio/video streaming, advertising, and devices - all of which have millions of customers/users serviced by a strong network infrastructure. The sheer growth across its businesses in the recent years has primed Amazon as one of the leading operators in the network space. Naturally, to cope up with its ever increasing network-related demand, the company is not just spending shore up its infrastructure through vendor partnerships but could be mulling to build some on its own, especially on the hardware side. Below are a few key highlights from the report:

  • As a percentage of revenues, Amazon spends more on R&D than capex, which is typical of WNOs. The gap between the two spending, however, is somewhat shrinking which goes to show Amazon's greater efforts in building datacenters and warehouses in the recent years. Amazon also emerged as the top R&D spender among WNOs over the past two years, due to Prime Video.
  • Amazon currently manufactures some of the network components such as routers, chips, network interface cards, and network gears to meet the growing needs of its cloud business (AWS). The internet giant, known for disruption, could foray into the enterprisenetworking market and sell its own custom-made hardware by 2020, taking the incumbent network vendors head-on.
  • However, Amazon is also creating a host of new opportunities for network vendors, as it looks to disrupt different industriessuch as automotive (driverless cars) and healthcare (online pharmacy and heart-rate detection device), both requiring a strong network infrastructure to enable data transfers and communication between sensors and components.
Table of Contents
Product Code: GNI-27092018-1

Table of Contents

  • Latest earnings takeaways
  • Revenue Analysis
  • Capex & R&D Analysis
  • Key tech relationships
  • Amazon's network strategy
  • Amazon's disruption effect
  • Appendix 1
  • Appendix 2
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