While blockchain deservedly continues to dominate major headlines, news channels and conversations all across the technology landscape, some of the most influential names from within the industry remain on the outside of this sector looking in at it. However, along with several high profile announcements over the last few months, it would appear as though one of those tech giants is fed up of just looking at it, and may, in fact, be ready to dive into the field.
The company is, of course, Amazon, which also ranks as one of the largest corporations in the world, and has spent the last few months exploring all of the possibilities that can come alongside researching, implementing and adopting blockchain for itself. Since earlier this year, however, these exploratory studies on blockchain have since translated into real actions after the company announced several partnerships and has announced that it wants to be put squarely in the conversation of the sector's future.
One of the concepts that it hopes to bring is its new ‘blockchain as a service' (BaaS) offering, and has coincided with a series of questions that surround Amazon's alliance with blockchain move from the theoretical to the all too practical.
A Multi-Faceted Motivation
There's very little to question the fact that blockchain is rapidly becoming a profitable sector for many businesses whether they're directly or indirectly linked to it. And while it was initially tied for a long time to the ebb and flow of cryptocurrency performance, the technology has since shed this relationship and become a power unto itself, making it a key driver of innovation.
Most of the change and disruption has been brought about by a major number of developers, entrepreneurs and smaller ventures and companies. But by this point, even larger multinational companies are starting to see the merits, values and virtues of this technology. This is evident from the many partnerships announced between blockchain startups and major corporations.
For Amazon, the need to incorporate blockchain tools has two distinct faces: changing trends in the eCommerce and consumer sector along with seeking avenues to expand its increasingly vital AWS platform.
The Changing Game of Retail
There is very little in the way of doubt that Amazon reigns on a tall throne when it comes to online retail. The company accounted for roughly 44% of all eCommerce sales in 2017, and a spectacular 4% of all retail from within the United States.
However, with this market dominance comes a high price, as most companies which operate their sales through Amazon illustrate a critical issue. According to Eran Eyal, CEO of blockchain-based customer intelligence firm Shopin,
“Amazon presents a conundrum: While also providing a huge platform for wide product distribution, logistical support and marketing, all of this comes at the expense of a personalized relationship between the brand and their customers.”
For a great deal of retailers, the biggest issue is the loss of the end users vital information, all of which is collected by Amazon. The reason this is such a problem is because it greatly damages the sales ability of the retailer, considering most modern customers want a personalized experience as possible, because of this, that's something . that Amazon-based retailers simply can't deliver.
This places them at a distinct disadvantage to other retailers, especially when taking into consideration the research conducted by a study from Accenture, which demonstrated that 91% of consumers prefer shopping with businesses that recognize them and remember their specific preferences, something that Amazon lacks. Along with this, if it's in exchange for a better shopping experience, 83% of shoppers are happy to share their data.
Along with getting any concessions from Amazon's data collection practices, many retailers on their platform are looking for various alternatives, and blockchain is leading the way in fulfilling their desires. With projects such as Shopin, which rewards users for loyalty while also providing retailers with vital information about their consumers, are becoming increasingly widespread.
For the likes of Amazon, working with these sorts of technologies would allow them to improve the services on their platform. Even so, the company's efforts appear to be largely focused on the opportunities that blockchain affords them in the B2B sector.
Expanding B2B Domination
When it comes to the Business to business front, Blockchain has a distinct value to Amazon, and it makes the company's initial splash into the domain all the more clear. For one, the B2B realm has a much more developed ecosystem for blockchain to take advantage of, and Amazon's existing platforms are already optimized to incorporate the . technology with little friction. Amazon's Web Services, the company's cloud server option for businesses, has all the pieces in place to adapt blockchain technology with little fuss.
The company has also been quite aggressive in the finding of ready made partners to integrate its new BaaS platform. One of these, for example, is the partnership with the Qtum foundation which Amazon announced relatively recently. The partnership allows for the provision of blockchain optimization for business users, and will help companies quickly create blockchain applications and smart contracts without having to handle the heavy labor involved with doing it themselves.
Just as significantly, perhaps, are the many other opportunities that are available in the realm of business intelligence when it comes to B2B solutions. These include blockchain-based supercomputers which leverage existing network resources in order to reduce costs while supporting a greater level of computational power.
These include Platforms such as blockchain-based AI computing platform Tatau, for instance, which deploy unused resources on its blockchain for data processing and graphics rendering, could thrive on AWS’ massive network. Moreover, AWS could supply these services as part of larger BaaS offerings, or even as standalone services that reduce its operational costs and dispense tremendous value.
“Considering that Amazon offers a huge range of services from streaming video, to cloud computing, to bricks and mortar retail. However, decentralized solutions will have a sustainable advantage over AWS in the foreseeable future as Amazon’s policy (unlike Google) is to only run ROI positive activities. AWS runs a model with slim margins and will not reduce prices significantly. That means that the decentralized p2p players will always have a price advantage.” said Martin Levy, the cofounder and CEO of Tatau.
For the likes of Amazon, entering the . world of blockchain is more than an ample opportunity at this point in time, it has become an utter necessity. A vast number of its largest competitors in the computing and business services sectors have had a head start as first movers and have already show initial success at their early stary.
The likes of IBM's Hyperledger, for example, continues to roll along, adding partners to its list and expanding its reach all the time. Network solutions provider Cisco has also had a service online since late 2017, and even Microsoft has entered the fray with its own enterprise blockchain.
“AWS is all about providing infrastructure as a service. Even though they have a nice set of proprietary services, their claim to fame is to deploy and scale any infrastructure service faster and easier than anyone out there. For example, they are not shy to claim that “88% of TensorFlow projects run on AWS” with TensorFlow being a proprietary technology of Google.
I believe that AWS will (and probably has already) be very serious about being one of the best and easiest ways to deploy a blockchain based infrastructure. Doing so by not only providing templates, like that already do for the likes of Hyperledger and Ethereum, but as a full stack blockchain service, interconnected with all other available products like storage, databases, development, IoT and Machine learning.” said Daniel Trachtenberg, CEO and Founder of Zinc, a user-centric blockchain based advertising protocol and app.
So Can Amazon Catch Up?
With all this in mind, Amazon is a relatively late entrant into the world of blockchain technology. The company has however already made a number of overtures as early as 2017, but 2018 has seen it grow to be more aggressive in its forays into blockchain. On the other hand, with the industry rapidly taking a more solid shape than before, Amazon has its work cut out for it if it's going to carve out its place in this industry.
While its use case in the B2B space is quickly obvious, ignoring the uses of blockchain technology in the retail sector may be a big mistake in the long rune, especially as shoppers feverishly demand a bespoke experience whenever they log in. While Amazon remains the de facto gatekeeper for most online retail, avoiding blockchain could derail this hegemony unless Amazon opts to join the race in a more serious fashion.