Summary: Amazon’s AWS service, which provides services to both large and small businesses via cloud services, unveiled a host of new features. Many of these new features either make competitors obsolete or make it easier to work with them, giving Amazon a competitive advantage in the platform. And while the additional features, available at no extra cost, make the platform more useful, it will likely also be used to increase market share and decrease competition in the market, making Amazon even more powerful than it already is.
Discussion Questions:
- The article mentions that Amazon has not increased the price of its AWS service. Is this what we would expect from an oligopoly market? Why or why not?
- The additional features provide greater value to customers. Explain how this may serve as an entry barrier in the industry?
- The article notes that Amazon will now be producing its own processing chips rather than relying on companies like Intel and AMD. What are the advantages and disadvantages to taking production in-house rather than relying on the market for these inputs?
- What are the pros and cons of Amazon designing its new features so that they are compatible with its competitors similar features?