It’s been in the works for years. If you read their quarterly reports properly, you found that they were always spending an awful lot of money on software development. When I'd visit friends there, I was never able to look at anyone's computer screen. When you'd walk down the hallways, computer monitors were always positioned so the casual observer couldn't see the screens. It was clear that they were working on proprietary tools for their own in house use.
But you don’t make that much money on proprietary tools for in house use.
In a recent reorganization of the company, 2 of the five organizations were still devoted to software development.
What's going on here?
In addition to being a retail shopping store, Amazon is also a shopping platform. Sure, it’s had the associates program, affiliations with Target, Toys 'R Us and Pets.com over the years, being an electronic middleman.
But now they want to take that much further. They7 want to be software company. But if you were starting a software company now, would you sell software?
No.
Would you license software?
No.
You’d sell web services wouldn’t you?
Yes, but…
Of course, but… the problem with web services as they’re currently being sold is that there is no value inherent in the services. It’s a tool that you have to do all the work on. It’s a barrel you have to fill. It’s up the customer to add the value.
Amazon is wrapping the tools and the value up in one tight little package.
And maybe that’s a new economic model for selling software. The software disappears behind the service, and the service is integrated with a value delivery mechanism – in this case access to Amazon’s. and, in the online shopping space, it doesn’t get better than that.
This is a threat to Microsoft.... Read the press release. They're looking for developers.
1:35:09 PM 
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