Amazon is on a roll right now.
The company’s stock continues to see record highs, and its market value has soared to $740 billion dollars — almost three quarters of a trillion dollars.
That’s bigger than the GDPs of Switzerland and Saudi Arabia.
The reasons this is so impressive is because unlike Microsoft or Facebook, tech companies built on intangible products, Amazon has spent the past two decades building more than just technology. The company has poured billions into building warehouses and infrastructure, as well as sophisticated software, to run its extremely efficient e-commerce platform.
Why should we care now?
Well, Amazon is certainly not done building, but most of the “heavy lifting’ is complete and the company is operating on all cylinders. This means that as revenues continue to grow — as it has done remarkably for 20 years now — its profitability will continue to get stronger and stronger.
So Amazon — and Jeff Bezos — will undoubtedly continue to get stronger and stronger as well.
And while Amazon’s $740 billion dollar market cap is still far behind that of Apple ($910 billion) and slightly behind Google ($794 billion), and far from the inflation-adjusted peaks of Microsoft and GE over a decade ago, ask yourself who yields influence and power beyond market cap?
All of the other major tech giants — Apply, Google, Facebook, Microsoft — are influential and powerful, but when you consider these facts about Amazon, you will why it will be with us long into the future.
Retail is dying. The fact is that shoppers are moving online, and the ease and convenience of online browsing and shopping assures us that it will only become more widely adopted.
And Amazon is leading that charge.
Need proof? Consider that in addition to transacting 50 percent of all holiday e-commerce sales in 2017, Amazon is now worth more than the 15 most well-known retailers combined — and that includes Walmart, Target, Costco and Best Buy.
While building its infrastructure, Amazon understood it needed its own reliable and secure hosting service, so it created Amazon Web Services (AWS), which in 2017 accounted for more than 60 percent of Amazon’s operating income on only 10 percent of its total revenue.
Today, AWS is used by hundreds of companies like Netflix, Hulu, Comcast, McDonalds and Dow Jones, just to name a few. In 2016, Gartner’s Magic Quadrant ranked Amazon first in market share for cloud infrastructure service, with 31 percent — more than Microsoft, IBM and Google combined.
How powerful is AWS? In February 2017, a glitch in the AWS service brought countless websites and web services across the globe to a long, grueling and agonizing halt (5 hours), making painfully clear how dependent we are on its service.
Many people were up in arms about Amazon’s new proposed in-home delivery service, Amazon Key, that would allow delivery drivers the ability to enter your home and leave packages inside your door.
I am more worried about a quiet, unassuming virtual assistant, who is constantly monitoring our every conversation, than a guy rushing to catch the lunch special at 5 Guys Burgers.
And sure, there are more billionaires, and even billionaires with rockets that are bigger than those of Blue Origins, but you have to admit that when the richest one of all sheds the nerd image, shaves his head, pumps iron, surrounds himself with celebrities and at times looks like a character from a Deadpool movie, it might be time to pay a little more attention.