Does Amazon Have the Whole Enchilada?

For those who have read my musings for some time, you’ll know that I use a lot of Amazon services.

  • I have purchased music from Amazon for many years.  Why would I use Amazon’s music service when iTunes owned the market?  Because I really believe in competition.  And I really believe in good prices.  And I really believe in digital freedom.  Consequently, I’ve bought many dozens of albums from Amazon’s music service.  And recently, I’ve purchased from both my home computer and my Android phone.
  • I’ve also used Amazon’s Video service for a few years.  Amazon decided that they would boldly venture into the same market that Netflix and Blockbuster had already captured.  I originally chose Amazon because they weren’t Apple.  But then I began to use their service more fully.  And I realized that because they weren’t Apple, they were intrinsically better.

    Yeah, that’s an exaggeration.  But not by much.  I bought a Panasonic Blu-Ray player.  And it included streaming from Amazon VOD.  Because both Amazon and Panasonic had an established history of leveraging open source technologies, it was a natural harmony.  And as my Viera Cast capabilities grew, so have the Amazon VOD capabilities – especially with the Amazon prime membership that my wife has.

    But while I’ve had Amazon VOD for about two years, I haven’t really exploited it much until I had the right wireless infrastructure at home.  Now that I have that in place, it’s been wonderful using the Amazon service.  I can get almost any video I want whenever I want it.  And if I choose to buy it, then Amazon has provided a video locker to store the digital content in.

  • Since getting my Android phone last year, I have been waiting for Amazon to open up their own Android market.  This week, they finally made it official and started vending apps using their retail purchasing engine.  I haven’t bought a lot of apps from them yet.  But if they provide the same application re-installs that the Google market does, then I may switch my purchases to Amazon.  [Note: I really love automatic reinstallation of apps from the Android market.  Every time that I switch ROM’s, I need to reload my system.  So this is a sticking point for me.]

I’ve used a lot of “cloud-based” storage in the past.  While at Microsoft, I tinkered with SkyDrive.  BTW, this was a revolutionary concept that suffered from a horrible implementation.  [Note: That is quite typical for many Microsoft technologies.  They can always out-market you on technology that they acquire.  And they can almost always build really cool new things.  But they oftentimes have trouble building and marketing first-generation technology.]

But when SkyDrive didn’t seize the market, the most notable cloud-based storage tool in the market became DropBox.  DropBox got a lot of the technology right.   And they really captured a chunk of the geek market.  Indeed, Cindy and I have used DropBox for several years.  And it has been a wonderful success whenever she has needed a collaborative storage platform for her master’s degree classwork.  But like SkyDrive, DropBox never made a big enough splash in the market to begin to seize the consumer marketplace.

And now it’s Amazon’s turn.

I REALLY love the cloud storage offering that Amazon released this week.  If you’ve had your head in the clouds (or had your head stuck somewhere else), then I will tell you that the Amazon service is called the Amazon Cloud Drive.  I love the name.  It leverages the notion of the cloud (as popularized by Microsoft ads) and adds to it the simple and well-understood notion of the “drive” as storage.  Hence, Cloud Drive may well be a marketing winner.

And the Cloud Drive offering is fairly complete.  You can use it on your PC or Mac.  And you can use it on your phone.  And you can use it on a tablet.  So far, it seems to really “sing” with music-based files.  Of course, that makes sense as music files are the largest commodity that will be stored.  It will be months (or maybe even years) before videos will become a ubiquitous on the service.  So adroit mastery of music files hits the Amazon sweet spot.

And they have chosen a good niche for the amount of free storage.  It is larger than either DropBox or SkyDrive.  The current offering is 5GB for free.  I suspect that Apple and Google may try and best this with a 25GB offering.  But we’ll have to see.  The folks at Forbes think that the first major reply will be to up the storage limits.  If that happens, I would bet that Amazon will respond.  That might be a fun price war to watch.

So far, I really like the first volley in the impending digital storage wars.  Like the folks at Forbes, I see Apple and Google jumping in on this.  And I think that Google may just buy DropBox.  They don’t need the DropBox tech.  But they may want the customers and the buzz.  But I also think that you may see some other folks jumping in.  I do believe that Microsoft may burnish and re-launch SkyDrive.  If they do, this might be hella fun.

And I really think that storage vendors and media player vendors are going to want to get in on the action.  While they may not be able to make a complete offering themselves, it will be nice to see how they are used as channel providers to the bigger players.

So what will it take to win?  Winners (and survivors) will need the following:

  • They will need capital to purchase and implement the vast quantities of storage that may be required.
  • They will need established data center management skills to make the cloud-based storage initiative viable.
  • They will need marketing to get the message to customers
  • They will need partners for channel depth and diversity of correlated features/capabilities.
  • They will need digital content.
  • They will need a retail channel (with a strong purchasing and delivery engine).

Google has many of these.  I do think that they lack diverse content – although YouTube does help.  What they really need is some content partners – like Sony???

Apple has some of these.  Nevertheless, they lack a robust and diverse partner ecosystem.  Yes, they have lots of partners.  But they re so closed that they are technologically inbred.  And they don’t have a lot of online storage already in their pipeline.  Yes, they sell content.  But they don’t really store it for their customers.  They move it to their customers’ devices.

Amazon has most of these (except for the brand identity across many markets).  They do have all of the pieces in place.  But no one knows that.  They have content.  They have storage.  They have the retail channel.  But they need critical mind-share in the consumer marketplace

I think that the market can bear all three of these big players – for now.  And Amazon is first out of the gate.  If they can capture enough early market, they may be the big winner.

I just wish that I could get “credit” for all of the Amazon MP3 purchases I’ve already made.  I hate to move all my stuff right back to them – and then have to buy additional storage.  It’s not fair! Wah! Wah! Wah!


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