Select your localized edition:

Close ×

More Ways to Connect

Discover one of our 28 local entrepreneurial communities »

Be the first to know as we launch in new countries and markets around the globe.

Interested in bringing MIT Technology Review to your local market?

MIT Technology ReviewMIT Technology Review - logo

 

Unsupported browser: Your browser does not meet modern web standards. See how it scores »

TR: In your talk you mentioned Fulfillment by Amazon, which was also announced on September 19. Explain how that works. It sounds a little like FedEx, except that an item spends some time in your warehouse before it reaches a customer.

JB: What you do is, you send us a case or a pallette of a product you want us to distribute. You might be a bricks-and-mortar retailer and want to do e-commerce as well. So you send us a portion of your products, and we store them in one of our fulfillment centers. We charge 45 cents per month per cubic foot of shelf space, or about $5 per cubic foot per year. We designed the program so that a used-book seller, for example, can very profitably do business with that model. You pay for the shelf space, and then when you send us a request–which is essentially a Web services call–we ship the product.

TR: Amazon, Google, eBay, and even Microsoft are all rolling out Web-based infrastructure services of different varieties, building on what they’ve learned about how to run their own businesses. We may all eventually do most of our computing within the cloud of computing and storage resources these companies are making available. Can you imagine Amazon evolving into a company that’s as famous for being a kind of Web utility as it is for being an e-retailer?

JB: No. This is a completely separate business that will grow up in its own way. We really have three businesses at Amazon: our consumer-facing business, our seller-facing business, and our developer-facing business. Of course they interact–the seller-facing business supports the consumer-facing business, for example, when used-book sellers interact with their customers on the Amazon website. But the way we’re organized, Web services is a separate subsidiary–Amazon Web Services LLC–and that group of people is focused on our external developer customers.

So the goal is to have the retail business continue to grow in its own right and to have the developer business grow in its own right. They aid and abet each other. Today, Amazon itself is the biggest user of things like EC2 and S3. We’ve been our own beta customers. But one day my hope is (to answer your question about the future) that Amazon will be just one of many big providers of infrastructure services, not the big provider.

TR: Over the long term, though, meaning 50 years or more, companies can go through pretty large transformations that no one would have predicted. IBM, for example, was once known mainly for making office equipment, then mainframes and PCs, and now it’s largely a consulting firm. You’re experimenting with technology that could evolve in equally unpredictable directions.

JB: I don’t expect that kind of transition, because all of our businesses can thrive separately. The retail business is global and thriving, and so is the seller business. Maybe it’s semantics, but I see Amazon Web Services as an extension of what we do, not the beginning of a transition.

TR: I guess it’s not really fair to ask you to speculate about the 50-year horizon.

JB: By then, we’ll all have downloaded our brains into microchips.

1 comment. Share your thoughts »

Tagged: Business

Reprints and Permissions | Send feedback to the editor

From the Archives

Close

Introducing MIT Technology Review Insider.

Already a Magazine subscriber?

You're automatically an Insider. It's easy to activate or upgrade your account.

Activate Your Account

Become an Insider

It's the new way to subscribe. Get even more of the tech news, research, and discoveries you crave.

Sign Up

Learn More

Find out why MIT Technology Review Insider is for you and explore your options.

Show Me