Cloud Computing Case Study on Amazon.com, Inc.

Abstract Page

Cloud computing is a technology that has a significant impact on business operations. The advances in technology are phasing out the use of physical infrastructure, and the use of virtual resources is gaining popularity. The provision of pay per use model offers a flexible and cost-saving platform to get access to calculate the use of resources. As a result, companies are investing in research in cloud computing, with some firms setting apart a dedicate team of scientists and developers. Despite the cost involved in transitioning towards cloud-based computer operations,  the benefits that would be achieved by the transition are significant. Amazon, which is an e-commerce platform for sale of a wide variety of products ranging from food products to electronic devices, is a critical focus in this paper. As a leading retail platform globally, it has transitioned to cloud computing from its previous tape-based information storage systems. This was necessitated by a large amount of information being received from consumers and needed to be efficiently stored and processed. Additionally, traditional tape-based storage was slow in the location and retrieval of information.  This transition has resulted in faster processing of data, cost-effectiveness in the adoption of company resources, and secure as well as reliable retrieval of data.

Cloud Computing Case Study on Amazon.com, Inc.

Introduction

Management of the extensive changes and developments in technology practices in business has resulted in several challenges for leaders of companies. Traditional physical installations are being phased out, and more wireless web-based services and architecture is being adopted. Recently, the virtualization of resources in business information has been accepted due to its cost-effectiveness and ability to improve the speed with which business operations are implemented. This paper focuses on Amazon, which is a leading e-commerce platform globally. Particularly keen focus is placed on the challenges the business was facing and the gains made by adopting cloud computing.

Company Overview

Amazon.com (Amazon) is an electronic-based commerce and cloud infrastructure firm based in the United States. It was founded in the year 1994 by Mr. Jeff Bezos, and its first location was in Seattle. The vision statement of the company speaks volumes about its plan of action in the future and explains the growth it has experienced in the recent past. The vision is stated as,“ To be Earth’s most customer-eccentric company, customers can find and discover anything they might want to buy online” (Harracá, 2017). The company began as a web-based book sale store but later increased its products to toys, food, and even music (Harracá, 2017). The firm currently has diversified into electronic goods such as tablets and is a leading provider for cloud infrastructure services. The company has websites for each of its strategic consumer bases; the united states and the United Kingdom, as well as thirteen other countries offering shipping services. Therefore, as a company, its operations are in the web-based retail industry besides being a cloud services provider.

Challenges faced by the company

Amazon is one of the organizations that rely on cloud computing for its services and provision of the same. Amazon uses cloud computing to keeping information and unveiling server computers in a cloud computing setting. However, the company has been experiencing challenges in delivering services to its customers affecting its profitability and competitive advantage. The following section discusses how cloud computing is being leveraged to overcome the obstacles.

One of the biggest challenges in Amazon in the past few years is keeping up with E-commerce growth and accompanying information. As recorded in the past few years, the company has been posting 10% growth in the segment while another recording a higher margin in the business line. As a result of the challenges, Amazon created a cloud-based commerce service that has solutions that can be adjusted accordingly to meet the needs of their customers (Jamsa, 2013). With an increase in data, security became a challenge as well; the company needed to ensure its data is secure from cyber-attacks. Therefore, the company implemented an online data storage and processing system to keep the systems secure by using cloud computing certifications that guarantee the security of the services.

Another challenge is maintaining the general performance where the company has posted a low growth rate than expected.  In the year 2019, the company posted a growth rate of 15%, which is much smaller, considering the performance they had in the past years (Erl, Mahmood, & Puttini, 2014). The challenge is being tackled by cloud computing by installing new Information Technology resources in the cloud computing environment to reduce the time taken to make the funds are available to the developers from weeks to a few minutes (Narula, & Jain, 2015). Additionally, the speed and agility are increased to reach the consumers on time since the time and cost have been reduced.

Amazon is a leading e-commerce platform globally; therefore, it is challenging to manage numerous files of data being received. The company has experienced immense growth over the years, with its customer base increases as well as its list of products on offer. As a result of both the former and the latter, the accompanying information increased, and therefore so did the number and the sizes of databases the firm was implementing (Amazon.com Case Study, 2014). Implementing cloud-based storage offered a better option for storage since cloud computing offered flexible storage services.

Tape based storage technology leads to a lot of delays in company operations, especially after data center power outages. The company faced a challenge in setting backups of legacy oracle databases onto tape-based. Cloud computing is a technology that amazon implemented to improve its operations; its cloud product the amazon web services(AWS) was created and implemented. The transfer of storage services to Amazon simple storage service happened in the year 2011, a change from traditional tape backups. The new strategy was to assist in the reduction in expenditure, faster backup and restoration speeds, removes time invested in designing schedules for archives and reserve freeing up more staff for critical operations (Amazon.com Case Study, 2014).

Cloud Computing  & Its Benefits to the Company

The company committed to implementing cloud-based services to boost its operations and, as a result, gotten rid of complicated delays in handling tape-based physical storage. As a result of implementing cloud-based technology, the firm witnessed a twelve times improvement in performance, reduction in time consumed in restoring data from around fifteen hours to about three hours in some cases (Amazon.com Case Study, 2014). The company receives and processes handle several hundreds of millions of financial transactions, many addresses to deliver products to many shipment options, and even tracking of orders (Chaffey, 2018). As a result of cloud computing, information management and processing are more efficient, therefore boosting company operations (Jackson et al., 2010). Cloud computing provides for efficiency for services that are accessible on-demand, pay-as-you-go enabling flexibility in managing resources.

Amazon has improved its cost-effectiveness through cloud computing. Amazon web service provides up to date IT infrastructure on demand, meaning the company employees can effectively maximize current technologies while being cost-effective (Varia & Mathew, 2014). Previously the company purchased infrastructure which ended up not being used since company needs are dynamic. However, with the use of cloud-based services, Amazon has access to multiple resources for different operating systems, which can be requested on-demand hence saving on costs. Financial resources have also been effectively managed since the company does not need to allocate finances to maintain and repair robots to handle tapes. Therefore, there has been cost-effectiveness as a result of cloud computing.

Additionally, through cloud computing, Amazon has been able to implement backups efficiently. Database administrators experienced ease in moving oracle RMAN backup content to the cloud through configuring the oracle secure backup cloud (SBC) component. (Jackson et al., 2010). This was as a result of cloud computing; previously, tape-based infrastructure was challenging to transfer and complement using other technologies.

Through cloud computing, the amount of time for backup data to be available has been reduced significantly. Backups were previously done on tape; retrieval of such data was time-consuming as there were delays (Bankar, 2018). Agreeably, amazon web services is one of the best cloud-based services globally due to its time efficiency. Previously, software to restore data from tape needed to scan the data collection to find the particular files, find the correct tape, dock the tape and obtain data; hence there were many delays in restoring data (Jackson et al., 2010). Therefore, time efficiency is a crucial advantage of the company implementing cloud computing.

The company also can recover quickly after data center outages; cloud computing enables immediate recovery as compared to previous tape backups, which took a long time to come back on. The company has also reduced its expenditure hence increased resources to be invested in streamlining critical operations (Bankar, 2018). Amazon.com has cut costs by eliminating robots for tapes, tape inventory, data center offices, networking infrastructure, and backup machines. The firm, therefore, does not have to budget for equipment too early (Chaffey, 2018). The equipment is only acquired when it is needed.

Amazon has achieved a lot of progress due to the adoption of cloud computing. The company leadership has had its list of objectives for implementing cloud technology achieved. Additionally, the objectives have been superseded; innovations such as the adoption of amazon go assistant and technology implemented in amazon go, which allows customers to shop without having to queue (Chaffey, 2018). Through machine learning and artificial intelligence, machines can identify products a customer has picked and charge them to their wallets, therefore, making shopping convenient in their stores. The company has also witnessed improved time management and fewer delays in retrieving data with the use of cloud computing.

Conclusion

In conclusion, Amazon’s web service has significantly improved operations for the company. Additionally, the dominance of the company is now secured due to the virtualization of resources and the implementation of use-as-you-go models. This is because, with the increase in information, the company can store the data and process it upon demand. Amazon’s dominance in the e-commerce industry will continue as it is committed to continuous innovation in cloud-based technologies to improve its operations.

References

Amazon.com Case Study. (2014). Retrieved from aws.amazon.com: https://aws.amazon.com/solutions/case-studies/amazon/

Bankar, S. (2018). Cloud Computing Using Amazon Web Services (AWS). International Journal of Trend in Scientific Research and Development (ijtsrd), 4(2), 2156-2157. doi:https://doi.org/10.31142/ijtsrd14583

Chaffey, D. (2018). Amazon.com case study – 2018 update. Retrieved from https://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/amazon-case-study/

Harracá, M. (2017). Business models and organizational forms: searching the edge of innovation in Google and Amazon. Retrieved from Academia.edu: http://www.academia.edu/download/57121508/2017._Business_models_and_organizational_forms_searching_the_edge_of_innovation_in_Google_and_Amazon.pdf

Jackson, K. R., Ramakrishnan, L., Muriki, K., Canon, S., Cholia, S., Cholia, S., . . . Wright, N. J. (2010). Performance Analysis of High-Performance Computing Applications on the Amazon Web Services Cloud. 2010 IEEE Second International Conference on Cloud Computing Technology and Science (pp. 159-168). Indianapolis: IEEE.

Varia, J., & Mathew, S. (2014). Overview of Amazon Web Services. Retrieved from amazonwebservices.com: media.amazonwebservices.com

Erl, T., Mahmood, Z., & Puttini, R. (2014). Cloud computing: concepts, technology, & architecture. Upper Saddle River, NJ: Prentice Hall.

Jamsa, K. A. (2013). Cloud computing: SaaS, PaaS, IaaS, virtualization, business models, mobile, security, and more. Burlington, MA: Jones & Bartlett Learning.

Narula, S., & Jain, A. (2015, February). Cloud computing security: amazon web service. In 2015 Fifth International Conference on Advanced Computing & Communication Technologies (pp. 501-505). Ieee.