3 Reasons Amazon.com, Inc. (AMZN) Is the Best Bet for IoT


Amazon.com, Inc. (NASDAQ:AMZN) posted its biggest quarterly profit after years of aggressive spending. For years, the company was the subject of outrage on the street over its inability to deliver consistent profits. Fast forward, sentiments have changed, and the company is in its longest profitability streak that has not come by coincidence.

Long Term Cloud Investments Paying Up

Investments in the cloud are finally paying up, vindicating CEO, Jeff Bezos, who until now has been under immense pressure. Concerns over company paying more attention to future growth have always spooked investors. If the recent quarterly earnings are, anything to go by, focusing on long-term growth opportunities might as well have been the right call.

Having solidified its position on e-commerce, Amazon.com, Inc. (NASDAQ:AMZN) is increasingly betting big on the cloud business. There is no doubt it is the right call given that future battles online will be fought on the Internet of Things.

The Internet of Things is all about the cloud an area of growth that Amazon holds an assailable lead. The tech giant’s cloud computing prospects look brighter than ever and on course to be a $10 billion a year business.

Amazon’s Unmatched Cloud Infrastructure

Amazon not only dominates the cloud market but the infrastructure piece of the business as well that gives it the edge over the other companies. Most of the companies, which claim to have market share on the cloud business, do not have the kind of infrastructure that the tech giant has.

The infrastructure part of the business means Amazon.com, Inc. (NASDAQ:AMZN)’s cloud business will continue to grow as more startups and business embrace the cloud.

Amazon Web Services is already bigger than Amazon.com was after ten years and as the pace of innovation continues to grow, it is destined to be even much bigger. Last year Amazon generated 93% of its total revenue from the e-commerce business with the remaining 7% coming from other companies of which AWS is a part. That is however set to change going forward given the accelerated growth the company is enjoying.

AWS Migration Services

Amazon has in the recent past, doubled its efforts in making it easy for enterprises to migrate to AWS. While other companies focus their attention on hybrid cloud, the tech giant wants businesses to migrate everything to AWS.

Amazon.com, Inc. (NASDAQ:AMZN) has a bigger opportunity with its public cloud model given that most companies are not ready to spend big on infrastructure. General Electric has already confirmed plans to transfer 9,000 workloads to AWS. The conglomerate plans to trim its data center footprint from 34 to four having realized the benefits of using a public cloud rather than having the infrastructure in-house.

With the launch of Application Discovery Service, the company is allowing businesses to take an inventory of apps they would like to use on AWS and have them migrated. Amazon is not only targeting small companies or startups with its cloud business, but it is also going after conglomerates that have big data that many platforms would struggle to handle.

The company recently upgraded its snowball appliance to 80TB from 50TB that lets companies ship all their data to the appliance before migrating it to AWS. In a bid to make it easier for companies to transfer their data to AWS, Amazon has also collaborated Accenture to provide AWS migration services.

Bottom Line

Amazon.com, Inc. (NASDAQ:AMZN) is making it easier for firms to migrate to AWS. Given that companies looking to migrate to the cloud are looking for services with the lowest costs, the company should be able to land more deals.

AWS relives firms the burden of having to come up with their own infrastructure so that they can move their data and operations to the cloud. The cost advantage is what will make Amazon.com, Inc. (NASDAQ:AMZN) a big hit on the cloud business as it attracts more IT spending looking for cheaper options on public clouds.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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