Long known for its ubiquitous website that sells everything, cheap, some of Amazon's biggest moves in recent years have largely been out of sight of everyday shoppers.
The company is aggressively pushing into enterprise markets long dominated by companies not normally thought of as direct competitors — including Google, IBM, Microsoft, Oracle and SAP — like cloud computing and business intelligence.
All of this was underscored by several product launches this past week at AWS re:Invent, including business intelligence tool QuickSight, and database engine Aurora.
In going after the enterprise sector, CEO Jeff Bezos is targeting a giant opportunity. Baird Equity Research said Amazon's Web Services currently represents less than 5 percent of global data spend — which is around $150 billion — and less than 1 percent of the $1.2 trillion to $1.4 trillion enterprise/software IT services market.
And the company has already made inroads. On stage at AWS re:Invent, Andy Jassy, senior vice president, announced that Amazon Web Services (AWS) now counts more than a million business as customers, and the division has grown 81 percent year over year.
How is Amazon able to do this? By being scrappy. Traditional enterprise software companies need to sell high-margin products to support costly legacy sales and marketing teams. Instead, Amazon has targeted start-ups for cloud services, and is now offering products aimed at bigger customers.
Plus, of course, trying to undercut everyone else on price — a traditional Amazon tactic.
"Whenever Amazon moves into a new market they bring a low margin, direct sales, price penetration model in that upsets the established market order. They unlock lower-level buyers with a lower cost of sales, and redirect the growth in the market away from the incumbents," said Forrester analyst Jeffrey Hammond.