Like Tesla is a technology company that happens to make cars, Amazon is a data company that uses a webstore as its front end
Gammy Dodger stashed this in Ecommerce and Retail
Amazon's 1,263 Patents Reveal Retailing's High-Tech FutureRetailing powerhouse Amazon.com seldom pulls back the curtain on its high-tech operating secrets. This recent, minimalist interview with Amazon executive Andy Jassy is a case in point. But there’s one place where the online retailer is garrulous as can be: its filings with the U.S. Patent Office.
Since entrepreneur Jeff Bezos founded the company in 1994, engineers working at Amazon have obtained a remarkable 1,263 patents. Most of these have been assigned to Amazon Technologies, a Nevada unit of the Seattle retailer; some of the older patents ended up being assigned to Amazon.com itself. They cover everything from network encryption to a host of better ways of making Amazon’s shopping-recommendation engine work.
Why are Amazon’s lawyers wearing down the steps at the entrance to the Patent Office? Traditionally, gung-ho patenters like AT&T, IBM and Hewlett-Packard have used clusters of patents as a way of marking their territory, so that competitors can’t launch low-cost, copycat offerings without the expensive research necessary to earn market entry. Such classic reasoning may fuel Amazon’s patent enthusiasm, but there’s a lot more to the story.
In a recent article for MIT’s Technology Review, I argue that Amazon is approaching retailing as an engineering problem — not as the old-fashioned domain of inspired hunches and showmanship. After all, Amazon doesn’t have three crucial ingredients of a traditional store: showrooms where customers can touch the goods; onsite salespeople to talk up the wares, or an ability for customers to take purchases home with them instantly. As a result, I wrote, “everything that Amazon’s engineers create is meant to make these fundamental deficits vanish from sight.”
So Amazon’s patents are more than just a long recital of what the company regards as various patches of turf that must be protected. Taken in aggregate, the patents show the collective engineering mind at work.
For example, Amazon is highly iterative, returning 20 to 30 times to some areas of invention. Each additional patent is meant to expand or refine early ideas. Sometimes the incremental progress seems ridiculously small. But Amazon’s filings are reflective of a grind-it-out culture, based on the belief that a systematic series of small gains can add up to something big. To use a football analogy, Amazon wants engineers who think like fullbacks, not punt returners.
Amazon also is obsessed with data. As patent filings show, the company constantly hunts for ways to take the guesswork out of its business. Instead, it wants decision-making tools that make the best possible use of what customers have already done in the past. Watch Amazon closely, and you’ll see the rising impact of merchants with Ph.D.s. You’ll also see how much brainpower is being put to work to build newer operations, such as Amazon Web Services.
Finally, Amazon’s faith in new technology as the ultimate problem solver runs deep, deep, deep. One of my favorite oddities in the company’ portfolio of inventions is Patent No. 8,261,983. This creation enables Amazon’s fulfillment centers (or warehouses) to crank out custom-designed boxes for odd-shaped shipments that don’t fit into any of the company’s regular assortment of 40 different sized and shaped packages.
A less tech-minded retailer would simply use an oversized box for such unusual situations, deciding that the extra shipping costs were nothing more than a tiny, unavoidable inefficiency. But at Amazon, no inefficiencies are regarded as inevitable, even the tiny ones. Paying a few cents extra to ship a bulky box that includes a lot of air is regarded as an avoidable sin.
So if some engineers can devise a build-a-box scheme that takes only a few minutes in a shipment center to program and run, then they can win a patent for their trouble.
I had no idea that Amazon had a custom boxes patent.
Not sure whether to love them or fear them.
I think we need to love them. Feels clear that Apple's days as leader and innovator are numbered. I think that Amazon (and companies that are making long range investments in 'future') are going to be the source of innovation for the next 5-10 years. Jeff Bezos is very clearly playing a long game.
A while ago I visited St Vitus Cathedral in Prague, building who's construction outlived its architect and has now stood for 700 years. I remarked that there is no way that the investors in any architectural project would tolerate a payback period of 100 years leave alone 700.
So it is a remarkable feat in today's capital markets that Amazon is making the long term investments that it is making. The retail operation seems like the vehicle to hold the support of investors. If all goes to plan, I suspect that Amazon will be the source of interesting things in our lives. Hopefully some social good will be woven into that.