Bookstore Gone Wild: The Cultural, Political and Financial Landscapes That Amazon Changed

Jeff Bezos, Time Magazine, 1999. All Rights Reserved, Time.

In examining our globalised society, it is difficult extricate the innumerable influences of technology on the social, political and cultural spheres of contemporary life. Similarly, it is challenging to untwine transformative technologies from the companies who develop and maintain them. One such example is Amazon, the bookstore turned conglomerate. Facilitating everything from military security to fast food orders, Amazon and its subsidiaries are undeniable source of change in our internetworked world. Through an examination of their far-reaching eCommerce and cloud computing offerings, Amazon’s global influence on socio-cultural and political change is evident.

The Origins of Amazon

Amazon famously started as an online bookstore in 1994. The company was founded on a consumer-oriented business model, attempting to simplify all aspects of e-commerce. Through fast and reliable shipping and a simple user interface, the organisation grew quickly, with a customer base of over 1 million by 1997. By 1999, Amazon’s American founder, Jeff Bezos, was Time magazine’s Person of the Year. Now the wealthiest man in the world, Bezos sits at the helm of the largest internet conglomerate in the world (Bloomenthal, 2020), with annual revenues of $280 billion USD in 2019. The business now consists of over 40 subsidiaries, in a network that seriously competes in many aspects of the global digital landscape. To best understand this powerhouse as an agent of internetworked change, we must understand the histories and purposes of the businesses that buttress it.

Amazon’s ecosystem is comprised of over 40 (Hall, 2020) organisations in total. Although the Amazon brand sits at its centre, it must be understood that all Amazon businesses are operated on their own cloud computing services. Something this text will explore.

The Amazon Ecosystem

 

A Digital Retail Empire: Amazon.com

‘The Everything Store’ (Stone, 2013) as it has come to be known, Amazon.com is the 9th most popular website in the world. The e-tailer is home to a plethora of goods, many of which they manufacture themselves. Apparel, toys and of course books, the online store is home to 353 million unique items (Retail Touch Points, 2019). Much of this can be attributed to third-party sellers, who comprise 40% of annual sales (Retail Touch Points, 2019). The success of this consumer wonderland can be attributed to key developments in the user experience, all of which are underpinned by data.

Simplicity of the consumer journey was the key to the success of Amazon’s early retail operations (Wager, 2017), as customers were drawn to the ease promised by so many online stores. Their patented “1-Click” ordering was hugely disruptive in the digital marketplace as payment and shipping information could be stored by Amazon, meaning returning customers need only click once on an item to complete the transaction process. Wharton’s professor of operations, information and decisions, Kartic Hosanagar, recognised this “huge asset” for the e-tailer as it enabled “growth in the broader retailing sphere where others had trouble” (Wager, 2017). This asset, Hosanagar finds, serves as “flag bearer for the convenient shopping experience that Amazon came to be known for”.

This sense of seamlessness in the the shopping experience became increasingly valuable to the company with the introduction of product recommendations (Siegel, 2008). In his 1999 interview for 60 Minutes seen above, Bezos spoke of the “350 floppy discs” of information collected about consumers each day. This information enabled the organisation to track movement on the platform, creating computerised consumer profiles, to suggest books and music which were most likely to appeal to the them . Now labeled “collaborative filtering engines”, these recommendation algorithms enabled a superior shopping experience with Amazon. The “scalability” of the item-to-item collaborative filtering developed by Amazon, Linden (et al, 2003) finds, produces “compelling” user interactions. The significance of this data mining technique is affirmed by its’ accounting for 35% of annual Amazon sales (McKinsey, 2014).

The developments of “1-Click” and collaborative filtering were not only significant for the business, but culturally (Siegel, 2008). Professor Wager, of the University of Pennsylvania Law School, finds that the true legacies of these technologies was their role in “showing customers that there was a good reason to give (Amazon) their data”. As a result of the successful implementation of these early internet technologies, the organisation was able to establish positive connotations with data collection and mining (Siegel, 2008). Thus beginning their role as agents of internetworked change.

 

The Business of Global Data Management: Amazon Web Services

“You don’t generate your own electricity, why generate your own computing?” – Jeff Bezos, 2008 (Wired Magazine)

With a growing data-centric empire, Amazon developed digital infrastructure to support the front and back ends of their retail operations. In the process, the organisation created Amazon Web Services (AWS), a series of cloud computing offerings for businesses and consumers. Launched in 2002 and now a market leader in cloud computing, AWS oversee the processing and storage of data for businesses and consumers. As asserted by Bezos in his in interview with Wired Magazine (2008), this outsourced data management enables businesses to access global internetworks, without the significant associated costs of physical infrastructure.

The largest arm of AWS’s cloud computing offering is their ‘Infrastructure-as-a-Service’ (IaaS) product EC2 (Gartner, 2020). Representing half of the $44.5 billion USD market for IaaS, EC2 provides virtual computing to businesses (Gartner, 2020). Through EC2, businesses rent the processing capacities of AWS’s network on a monthly basis (Dignan, 2020). Similarly, with AWS’s ‘Storage-as-a-Service’ (SaaS) offering, S3, organisations are able to outsource storage of their data, placing it within the Amazon network. Combined, these services have revolutionised the digital landscape for businesses and individuals.

The transformative elements of this technology are highlighted by the two key factors contributing to the success of EC2 and S3 (Siegel, 2008); Amazon’s real-time scaling capacity and computing infrastructure.

Firstly, the scaling capacity of AWS’s IaaS and SaaS products is the foundation of its business model (Siegel, 2008). As the processing and storage demands of businesses fluctuate, the subscription model enables organisations for pay only for the capacity they require at a given moment. This ‘elastic’ computing model is remarkably efficient for a business’ bottom line, accommodating seasonal demand for businesses (Chaisiri et al, 2011). As a result of the accessibility that this elasticity affords, organisations are able to economically justify significant data stores (Chaisiri et al, 2011).

Amazon’s seemingly intangible cloud computing and storage power is in fact fostered by a significant Content Delivery Network (CDN). This global network of data storage and processing facilities makes information omnipresent (Winseck, 2017), as businesses and their consumers can access data instantaneously through the internet. With over 100 known data centres (Moss, 2018) across 5 continents, AWS maintains the largest and most sophisticated CDN in the world. The reputation of this network and the EC2 and S3 services, is exemplified by AWS’s extensive list of clientele, which includes:

  • Netflix, the website responsible for 15% of global internet bandwidth (Fortune, 2018), who utilise S3 to deliver thousands of terabytes of content to the devices of all users (Amazon Web Services, 2020).

 

  • McDonalds, who used S3 and EC2 micro-services architecture to execute 8600 point of sale transactions per second (Amazon Web Services, 2020).

 

  • Facebook, who use EC2 service enables developers to process the data of some of the social media juggernaut’s 2.3 billion monthly users (Lua, 2020).

 

  • The Central Intelligence Agency, who signed a $600 million USD contract with AWS to manage all computing services, including the management of the US Intelligence Community Firewall (Konkel, 2014).

Thus the ability of businesses to perform in our digitised world is evidently enabled by the cloud computing services that AWS provide.

 

Bringing the network together: The influence and consequences of Amazon

 

So how have these technologies changed the socio-cultural and political aspects of life?

Whilst changes to online shopping may appear superficial, they are evidently a catalyst for a data revolution which is making a deep impression on our world.

Data has become a multi-trillion dollar business, with its invisible infrastructure controlling the content we view and the experiences we have online (Barbier et al, 2011). As an organisation responsible for the provision of storage and computer output required for our digital interactions, AWS plays a clear role society’s sharing ecology (John, 2016). This is exemplified best through social media. A medium whose primary affordance of scalability (Marwick and Boyd, 2011) is enabled by Amazon’s content delivery networks (Lua, 2020).

It is the ability of social media to bring together communities of shared thought, amplifying their voices across the world, which is most deeply connected to Amazon. Networked publics operating on sites like Facebook, depend upon the instantaneous and remote accessibility of information in order to function (Crivellaro et al, 2014). Movements such as #MarchForOurLives, which called for increased gun regulation in the United States, was underpinned by digital connections between a geographically dispersed, but idealistically aligned group. Thus, it is through Amazon’s internetworked systems of data storage, processing and dispersion that contemporary social and cultural change is organised and mobilised.

Data storage and processing has impacted the international political landscape. Now the underpinning of “financial markets, business, and trade, as well as diplomacy, spying, national security, and war” (Winseck, 2017), data has increasingly become a weapon of global governance and territorial imperialism (Harley, 2005). With content delivery networks dispersed internationally, governments’ have struggled for control of their citizen’s data. This is exemplified by the forced sale of TikTok’s US division to American-based Oracle, with the United States Government recognising the vulnerability it posed to the security of its population (The Guardian, 2020).

Similarly, for governments and private organisations like Amazon, the existence of data as a commodity brings into question “who has the authority and the ability” to oversee its management, “and in response to what goals” (Mansell 2012: 171). As we continue to enact more of our lives online, human rights have expanded to include digital privacy and organisational transparency (Karppinen, 2017). The establishment of such legislation of the European Union General Data Protection Regulation (EUGDPR) represent a global mobilisation of cultural and political thought, as the international community bands together to protect its undeniably connected citizens Buttarelli (2016).

 

 

 

References

 

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Barbier G., Liu H. (2011) Data Mining in Social Media. In: Aggarwal C. (eds) Social Network Data Analytics. Springer, Boston, MA. https://doi.org/10.1007/978-1-4419-8462-3_12

Bloomenthal, A. (2020). Investopedia. World’s Top 10 Internet Companies. Retrieved 10 November, 2020, from https://www.investopedia.com/articles/personal-finance/030415/worlds-top-10-internet-companies.asp

Buttarelli, G. (2016) The EU GDPR as a clarion call for a new global digital gold standard. International Data Privacy Law (6). pp. 77–78, https://doi.org/10.1093/idpl/ipw006

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About Henry O'Sullivan 4 Articles
Student of media and marketing at The University of Sydney