Pattern of Behavior: Did Amazon Steal Its Way to Cloud Computing Prominence?
Amazon Builds On…Other People’s Technology
I am beginning to wonder if Amazon has ever done anything straight-shooting and/or above board - to acquire its massive market dominance and cash cap ($744 billion).
Amazon Retail for nearly two decades has submarined and strip mined brick-and-mortar competitors by selling nigh everything during the retail-make-or-break Christmas season - at a loss.
“Black Friday in brick-and-mortar retail circles - is the day after Thanksgiving, and marks the start of the Christmas shopping season. It is called Black Friday because most retailers operate in the red (i.e. at a loss) – all year until then. It is that day they break through into the black. So obviously, Christmas for them is life-saving crucial.
“Amazon knows this. So what do they do?:
“‘Amazon is cutting prices ferociously on its products as Christmas shopping picks up, to levels that are break-even or below.’
“They cut prices to sell at a loss – right in the heart of retailers’ most important time of the year.
"Lather-rinse-repeat for a quarter century - and Amazon gets to a nearly $900 billion market cap. They are the biggest of behemoths - crowding out more and more and more competitors.”
Amazon almost single-handedly destroyed Toys ‘R’ Us - in absurdly corrupt fashion.
“Toys ‘R’ Us – got royally screwed by online retail monster Amazon. And said screwing – took place in the early 2000s…a crucial time in the evolutionary history of the Internet – and Internet retail.
“Richest-man-on-the-planet-Amazon-owner Jeff Bezos…was more than a little dishonest and unlawful in his dealings with the toymaker in question.
“In 2000 - when the Internet and Amazon were in their relative infancy - titan Toys ‘R’ Us cut with Amazon a deal to be the online retail platform’s sole toy seller….
“But then…Amazon started violating the exclusive deal - by offering toys from other retailers….
“‘In a strongly worded 133-page judgment, New Jersey Chancery Court Judge Margaret Mary McVeigh ruled in 2006 that Amazon had breached the agreement and damaged Toys ‘R’ Us’ unique position and ability to plan or craft strategies.’…
“‘Toys ‘R’ Us Inc. has won a lawsuit against Amazon.com Inc. that will allow the toy seller to set up its own Web site and end an agreement to sell products on Amazon’s site.’
“Wait a second – did you get that? Toys ‘R’ Us’ Amazon deal was so exclusive - they were precluded from building their own website.
“Get that? Toys ‘R’ Us - had no website at all…until 2006. Talk about being late to the game.
“By the time the toymaker began building its online presence – every single one of its competitors had about a decade head start on theirs.”
And most importantly - Amazon had already, utterly, criminally usurped Toys ‘R’ Us’ market position.
So when I saw this little news nugget - it totally matches Amazon’s scurrilous track record.
Amazon Web Services - is Amazon’s cloud backup computing wing.
This arm of the Amazon empire - has been crucially important to Amazon Retail’s no-profit business model.
“For the first time ever Amazon separated retail revenue from cloud services during a quarterly briefing last week and guess what? Amazon is a lousy retailer.
“It reported a loss of $57 million on $22.7 billion in revenue….Retailers have always suspected this, but now they have the facts. Amazon is subsidizing its retail division from profits made from cloud services.”
And now it appears Amazon stole the fundamental technology for its Web Services wing. Which then allowed it to be a successful mass subsidizer of its retail-murdering Retail wing:
“The (Kove IO) lawsuit challenges foundational aspects of AWS's cloud-based products and services, including how data is efficiently and scalable stored and retrieved.
“The patents asserted by the company cover technology that enables the modern cloud. The firm's inventors developed and patented technology that allowed hyperscalable distributed 'cloud' storage years before the advent of the cloud.
“The MIT Technology Review described distributed storage technology based on hash tables as a top ten emerging technology that will change the world. This was five years after the first of Kove's patent applications covering this technology….
“The lawsuit alleges that AWS uses the firm's technology as a building block of its cloud business.
“As explained by Dr. Overton, CEO, Kove IO: ‘As the amount of data stored in the cloud grew exponentially, there needed to be a way of storing and locating it that was more dynamic and adaptable, otherwise the system can only be so big.’”
Get all that? It seems the entirety of Amazon Web Services massive business - the for-profit side that mass-subsidizes Amazon Retail’s no-profit, retail-killing side - is built on stolen goods.
Now, this is America. We should await the rulings of the courts.
But the patent-theft accusation - certainly fits Amazon’s lifelong pattern of very bad behavior.
So I have my pre-judicial-decision suspicions.
This first appeared in Red State.