Scale Prevails with John Hale

Remember that fledgling discount on-line book store that paid no dividends, never turned a profit and seemed doomed (in the face of competition from different e-commerce stores and bricks and mortar retailers like Borders and Barnes & Noble)?

What a difference a decade makes!

Over the next decade, that firm will run a race with 3 other huge organizations to become the operating system for our lives. Think ‘Google Home’, ‘Amazon Echo’, ‘Apple HomePod’ and Facebook’s promised ‘Portal’.

Yes, Amazon is most likely to be the first firm ever to reach a market capitalisation of one trillion dollars. Why? Because, Amazon will not develop software for anything, unless they can scale it.

I recently purchased cloud space via the software company Articulate. Articulate, like millions of other global firms, lease storage from the world’s biggest Cloud provider, Amazon.

Today, Amazon is building the most robust logistics infrastructure in human history. Amazon has a fleet of 40 cargo places to help get packages to customers faster than UPS, DHL or FedEx.

Amazon figured out early on that pure e-commerce does not work. It is not economically viable, and no pure e-commerce firm will survive long-term. Rather, multi-channel retail does work. Look at what Apple stores did for Apple – at the end of the day, we want to ‘stroke the puppy’ before buying it!

Amazon warehouses and stores are coming to Australia. If our market passes Amazon’s scale tests, Amazon will keep coming, stores, cargo planes, cloud services, delivery drones and all!

2018-05-10T15:55:45+00:00By |Strategy|