As Google (GOOG: Charts, News, Offers), Microsoft (MSFT: Charts, News, Offers) and Apple (AAPL: Charts, News, Offers) fight for supremacy in cloud-based computing, silent threat Amazon (AMZN: Charts, News, Offers), long regarded as an online retailer and not a serious competitor in personal computing, has flanked its rivals with a full assault in the cloud. The online retail giant has the strongest web-based infrastructure to build its cloud-based services upon, and its servers have been proven, through the deflection of multiple hacker attacks, as the most resilient and “unhackable” family of sites on the web. The company’s Cloud Drive, Amazon Prime and Kindle cloud-based products have jumped ahead of Apple’s iTunes, Google Android Market and Microsoft Windows Live and are tied together with a strong customer base, online presence and corporate partnerships. Has Amazon become a viable threat to the computing giants of Silicon Valley?
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Amazon’s Cloud Drive service offers users 5 GB of free storage for music, videos, photos and other digital content. MP3 files purchased from Amazon.com do not count towards the disk quota and are stored fore free. For $20 a year, customers can receive 20 GB of storage. The Cloud Drive service also has a media player front-end, Cloud Player, which can play the stored media files from the Internet. This helps users save disk space on their home computers, and serves as a solid, reliable backup system. The Cloud Player is an upgrade of the company’s old web and Android-based MP3 downloader. This was the goal Apple was hoping to achieve eventually with iTunes, and Microsoft was clumsily attempting with SkyDrive, but Amazon beat both companies to the punch. Most mainstream users have a vague concept of “cloud computing,” but CEO Jeff Bezos has capitalized upon the mystique of the cloud by describing it as a “mythical” permanent storage place for digital media accessible from any Internet enabled device. With its website’s massive audience, Bezos is redefining the “cloud” from tech lingo into mainstream vocabulary.
In addition to launching a preemptive strike against Apple and Microsoft, Amazon has also emerged as a viable heir to Netflix’s (NFLX: Charts, News, Offers)video rental throne – its new video rental service, Amazon Prime, offers 5,000 movies and television shows to customers for $79 per year. Amazon’s seminal Kindle e-book reader has also redefined customer book purchases and reading habits and cut shipping and inventory costs. All of these cloud-based products – music, movies and books – all hint at an upcoming unifying product, and analysts believe that a tablet device, perhaps a full-featured color successor to its Kindle, may be in the works. If Amazon does indeed release a new tablet Kindle, which would be based on Android, it could be a true “iPad killer” in a sea of pretenders.
Amazon, the largest online retailer in America, is also well positioned against its brick-and-mortar retail competitors. Being larger than eBay (EBAY: Charts, News, Offers), the company has capitalized upon its reputation as a one-stop shop for anything a customer desires – from furniture to food products to home electronics – at lower prices than its superstore competitors Wal-Mart (WMT: Charts, News, Offers), Target (TGT: Charts, News, Offers), or Best Buy (BBY: Charts, News, Offers). These non-media products are listed on the company’s balance sheet as “electronics and general merchandise”, and according to its last quarterly earnings report, this segment grew faster and earned more revenue than its media segment. The company’s evolution from online bookstore to online superstore has changed the industry’s approach to e-commerce. Most brick-and-mortar retailers are now shrinking their stores to save on real estate, inventory and labor costs, while increasing their online presence. Yet none of these online websites have been able to match Amazon’s pricing, selection and reliability. Despite the stock price currently trading at the high end of its 52-week range of $105.80 to $191.60 and its high trailing P/E of 71.59, the stock may be an attractive investment to long-term investors, as Amazon’s current foray into cloud computing may be a catalyst for the stock to break out into a higher trading range.
Other News About AMZN
Amazon Assaults the Competition in the Air, On the Ground, And From the Cloud
Amazon flanks its competitors.
Amazon.com Launches Online Music Streaming
Amazon launches a preemptive strike against Apple’s iTunes.
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Google Will Face Privacy Audits For The Next 20 Long Years
The Federal government vows to keep an eye on Google.
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Leo Sun is long-time market follower and finance writer. He regularly contributes to the Stock of the Day analysis.
