Amazon moves into smart TVs – and enterprise cloud hardware
Amazon CEO, Jeff Bezos

Amazon moves into smart TVs – and enterprise cloud hardware

UPDATED While Amazon’s ‘Prime Day’ is grabbing the headlines today (see below), two announcements over the weekend revealed the breadth of the company’s ambitions in both the enterprise and the home.

First, The Information suggests that Amazon Web Services (AWS) is eyeing the hardware end of the enterprise cloud, in the form of the $14 billion global market for data centre switches.

AWS is considering selling its own switches – the hardware controllers that allow networked devices to talk to each other – to business customers, according to an Amazon insider.

A wider move into networking hardware, such as switches and routers, would pitch Amazon against companies such as Cisco, Juniper Networks, Arista, HPE, Avaya, Netgear, and Dell.

It could also see Amazon adopt similar tactics to those of its consumer operation, in which hardware is seen as a low-cost route, or loss leader, to customer loyalty in subscription or Web services.

An integrated enterprise hardware/Web services model could be a persuasive combination, while also providing a more convincing enterprise play for Amazon’s previously consumer-focused technologies, such as its Alexa-powered devices, which are increasingly developing enterprise-focused skills.

The Echo, Dot, and other Alexa-powered smart devices bring Amazon’s retail, Web services, and fulfilment businesses together, while focusing them on a single, integrated point that awaits customers’ instructions in their own homes and offices.

Coming soon to a screen near you

Meanwhile, Amazon is also reportedly planning an Alexa-powered smart television set and an expanded TV service, with an eye on providers such as Netflix and the BBC’s iPlayer.

The Telegraph reports that a Chinese-manufactured (by Huawei and others) Amazon smart set is currently being tested by the Digital TV Group (DTG) in the UK, the organisation which maintains local technical standards for digital broadcasting.

In April, Internet of Business reported that Amazon had teased the launch of the Fire Cube Alexa-powered set-top box, suggesting that Alexa will be core to most, if not all, of its hardware in the near future.

Earlier this year, Amazon announced that US upgrades of Alexa would allow more natural conversations with its smart devices, without constant use of the ‘Alexa’ trigger word. It also debuted its Alexa-powered smart camera, the Echo Look, which connects fashion-conscious consumers with human style-advisors.

The shape-shifting box shifter

In recent months, Amazon has further diversified into deliveries, content creation, premium subscription services, frictionless high street shopping, and more, and is eyeing banking and insurance. In May, Internet of Business reported that Amazon is building a healthcare team within its Alexa division.

Also on the roadmap are Amazon’s long-rumoured Alexa-powered ‘Vesta’ domestic robots, which are thought to include onboard cameras and sensors that can detect smoke, carbon monoxide, excess heat, and loud noises, and so could act as home security devices.

It seems inevitable that any such robots would also link to Amazon content, retail, and connected-home services. Concept models are thought to be being tested in employees’ homes this year, for potential release in 2019.

Plus: Prime candidate for security and protest?

In related news, a survey of 1,000 UK consumers claims that nearly half (49 percent) of individuals who do not yet own some form of digital assistant plan to buy one during Amazon Prime Day. However, the main reason for not purchasing one are concerns over security and privacy, cited by 20 percent of naysayers.

When it comes to security, six out of ten consumers (57 percent) don’t change the default settings on their connected devices, according to the survey from Thales eSecurity, with fewer than 40 percent of respondents knowing how to personalise their security settings.

In further related news, global advocacy organisation Sum of Us, which seeks to hold corporations to account on issues such as workers’ rights, is holding a global day of protest against Amazon to coincide with Prime Day, highlighting working conditions in the company’s warehouses.

Meanwhile, Amazon warehouse workers are striking in Germany, Spain, and Poland over labour contracts and working conditions. Germany is Amazon’s second largest market outside the US, with 2017 net sales hitting $17 billion (9.5 percent of all net sales).

The protests take place as Amazon CEO Jeff Bezos becomes the richest man in history, with a reported personal fortune of $150 billion.

Internet of Business says

An Amazon move into enterprise cloud hardware makes sense if you consider that ‘the cloud’ has long been a misnomer: cloud services all reside in hardware, built on land under national laws, and not in some imaginary fog of code in the sky.

Amazon recognised sooner than most that hardware is no longer an end in itself, but merely a route into cloud services and applications – and, therefore, to ongoing customer loyalty, subscriptions, and revenue.

Take that argument to its logical conclusion, and we can expect to see more and more Amazon-branded hardware in homes and offices – and data centres, whether its own or other people’s.

After all, manufacturing your own hardware also creates supply chain management and cost-control advantages: a fully integrated business, in which supply and logistics costs can be forced ever downwards.

Extend that realisation to every part of its business and Amazon’s mission becomes clearer: an all-embracing subscription service that extends from consumers’ homes and hallways to their workplaces, and every point in between, managing their health, lifestyle, education, training, finances, and more – along with their Web presences, of course.

But in any such business, questions increasingly need to be answered about data ownership, transparency, transfer, and trust – and the invisible commercial relationships that exist behind every service, special offer, and skill.

Not for nothing did Amazon and Google both oppose California’s new data protection laws.

Just as social networks have stumped the lawmakers and regulators who are tasked with managing and auditing our democratic processes, Amazon’s cloud business may prove too complex for antitrust/competition regulators to unravel – especially as Amazon can claim that it is merely offering a platform on which others can sell their goods.

But there’s another risk for any such business: over extension and lack of focus. Most enterprises can explain succinctly who or what their customers are. In Amazon’s case, the answer to that question is becoming ever broader and more opaque: everyone from police forces, patients, all types of consumer, and pre-schoolers, to CTOs and CDOs.

Can any company be all things to all people? It’s not impossible, but answering the question ‘What customer pain points do your products and services remove?’ becomes much harder – and the response less convincing – if the answer is “All of them, if it makes us money”.

Chris Middleton
Chris Middleton is former editor of Internet of Business, and now a key contributor to the title. He specialises in robotics, AI, the IoT, blockchain, and technology strategy. He is also former editor of Computing, Computer Business Review, and Professional Outsourcing, among others, and is a contributing editor to Diginomica, Computing, and Hack & Craft News. Over the years, he has also written for Computer Weekly, The Guardian, The Times, PC World, I-CIO, V3, The Inquirer, and Blockchain News, among many others. He is an acknowledged robotics expert who has appeared on BBC TV and radio, ITN, and Talk Radio, and is probably the only tech journalist in the UK to own a number of humanoid robots, which he hires out to events, exhibitions, universities, and schools. Chris has also chaired conferences on robotics, AI, IoT investment, digital marketing, blockchain, and space technologies, and has spoken at numerous other events.