And almost two times the amount of apple, where did the 22 billion 600 million us go?
Until 2013, there was no Amazon in the global corporate R & D list, but the company, which was famous for its business business, continued to dominate the list in recent years, even far away from the second.
In the early April, Bloomberg published the list of global corporate R & D investment in 2017, and Amazon topped the list with a huge investment of $22 billion 600 million, a full $6 billion higher than second Alphabet, which doubled in 2016.
Ranking of global R & D expenditure in 2017; source: Bloomberg
Amazon is indeed a special case of the entire list, with almost no other companies listed on the business sector. China's Alibaba, which has little gap in market value with Amazon, has grown to a market value of about five hundred billion of the international giants, but the R & D investment is fifty.
Why does Amazon invest so much in R & D costs? In fact, Amazon is no longer a simple e-commerce company. Its business is slanting in the Xiang Yun computing, hardware and content areas, which have brought more revenue to Amazon and need Amazon to continue to invest in it.
Cloud service AWS
The first is the fast growing cloud service AWS. In terms of revenue, AWS is becoming one of Amazon's most important business. Its revenue rose 43% in 2017 to $17 billion 500 million, accounting for 10% of Amazon's overall revenue, which made Amazon the top five in the business software industry. Analysts predict that the business will grow by 38% in 2018, and analysts at Morgan and Stanley forecast that in 2020, AWS will bring in more than $40 billion in revenue for Amazon.
Business software giant; map source:Flickr
But AWS revenues are increasing while costs are soaring, setting up cloud services in the new market needs to build infrastructure such as data centers, and Amazon is actively developing new services and skills built on AWS. For this reason, Amazon will convene a AWS developer conference every year to release its business users on AWS. The latest features and services.
The pressure of growth has been hanging over the Amazon's cloud computing sector, and Microsoft launched a cloud service Azure, which is directly competing with Amazon in 2010, and Azure is eating out of Amazon's earlier market with the help of Microsoft's long - accumulated corporate advantage. According to market research firm Canalys in February, Azure has already taken Microsoft's market share of 14% in the cloud computing market, worth $15 billion 600 million, second only to the 32% Amazon AWS. In addition, according to Microsoft's earnings by the end of April, Azure's revenue growth reached 93% in the quarter, which means that Azure has grown more than 90% in more than ten quarters, far higher than the growth rate of AWS.
In order to ensure the advantage, Amazon must invest heavily in infrastructure, develop new services and functions in the field of cloud services to open new markets and retain existing users.
Many people may not have heard of Lab126, but you must have heard of the products it developed: Kindle and Echo series.
Lab126 is a wholly-owned subsidiary of Amazon, founded in 2004. Its main business is hardware research and development, the most famous of which is the Kindle series of electrical paper products that began to be developed at the beginning of the company. Later, the company also launched the Kindle Fire Tablet PC, Fire Phone smart phone and the leading intelligence in recent years. Amazon Echo series smart speakers that can interact with the voice.
It can be said that Amazon and CEO Jeff have been known for their success since Kindle
However, Lab126, in the name of "laboratory", naturally has many cases of failure, such as the Fire Phone, which was mentioned earlier, the product line was called out a year after the launch. According to the research of third parties, the sales of Fire Phone may be less than fifty thousand. The failure made Bezos a big fire. He shut off the product line and cut out a lot of Lab126 employees. It was around 2014, and the iPhone and Android handsets had almost taken all the markets, and Bezos's gamble ended without a doubt.
But as Bezos himself often said, "if you know one thing is feasible, it will not be called an experiment. "Persistent exploration of new technologies and new products is what the founder of the self proclaimed" nerdy "appreciates for Wall Street.
Amazon Echo series of intelligent sound box products
Not long ago, the media reported that Lab126 was secretly developing a family robot named "Vesta", which lasted for seven years and is now in the end. In order to develop this robot, Amason has been recruiting a lot of robot experts. Up to now, the R & D based subsidiary already has more than 3000 employees, far exceeding the scale of a so-called "laboratory".
To some extent, Lab126 is the most traditional concept of R & D in Amazon's R & D expenditure. To the outside world, cool hardware is almost the most attractive place for technology companies, and for Amazon, who is starting up with online bookstores, it continues to be a local investment in Lab126, more like trying to maintain its own "technology Cool Company" label, because Lab126, Amazon can become more cool.
Amazon is particularly different from other companies on the list, and its R & D input includes input to original content. In Amazon's own financial statements, the expenditure was named "technology and content", which is positioned to be as important as the entire technology research and development.
According to Recode, Amazon invested $4 billion 500 million in the original video field in 2017, 6 billion 300 million dollars behind Netflix in the streaming media giant.
This investment is significant to Amazon. Amazon's Prime membership service has grown rapidly in recent years, which is related to its binding on Amazon's many businesses and product lines. With Prime members, users can enjoy the fastest day of Amazon's shopping services, streaming video and music, as well as online paper book reading services, which run through all aspects of people's lives in the United States, so the subscriptions of Prime members have maintained a good growth.
Original content is one of the most attractive services among Prime members. According to CNBC, Amazon's video service brought Amazon more than 500, 000 new Prime members in early 2017. These users who are interested in the original content of the Amazon, and subscribe to Prime members, will also use other services (such as e-commerce) from Prime members to allow the membership to be "out of value", as Bezos said, "to win a golden ball award, we can sell more shoes." "
Bezos, who is present at the Golden Globe Award
Amazon is reported to have invested as much as $5 billion in original video content such as movies and television in 2018, after Reuters reported that Amazon had pulled out of a number of independent film projects
In addition, Amazon also aimed at some large IP, such as the magic classic "the Lord of the rings". In early March, the Reuters announced that Amazon would add $250 million to the TV series "the ring king", raising the budget to $500 million, much more than the $280 million of the film trilogy. There is unconfirmed news that Amazon has stared at Liu Cixin's sci-fi masterpiece "three bodies", or will invest one billion dollars in making a collection of more than "game of power".
Amazon's commitment to original content is evident. Not long ago, Amazon's Prime membership price in the United States rose from $99 to $119, which showed Amazon's confidence in its membership service. After the high investment, Amazon is also asking for more returns and more Amazon members, and of course not wanting the $119 annual fee to buy only a few sci-fi blockbusters.
Closer to the future, closer to history
In addition to a few large expenses, Amazon has continued to invest in R & D in its retail network, UAV express and unmanned convenience stores, which have made Amazon face the challenges of the next five to ten years.
Amazon Prime Air distribution UAV
Amazon's share price has doubled over two years ago, and the market value also surpassed Google and Microsoft in the long run, the second largest company next to apple. Even a lot of Wall Street analysts predict that Amazon will probably reach the peak of trillion market capitalization before apple with nine hundred billion market capitalization.
Nineteen years ago, the famous interview program "60 Minutes" was explained by Wall Street's nearly supernatural optimism about Amazon: "investors like future companies, Amazon has a future, and Sears (Sears, a retail giant) does not, and that's the beauty of technology. "
In addition to the future, high R & D investment is Amazon's best chance to go into history. Like Bell Labs and Parc, once famous in Silicon Valley, people may forget their parent company AT
It's about Amazon, changing retail, changing people's reading habits, and even pushing voice interactions to thousands of families, perhaps what Bezos really wants Amazon to remember.