The Business Value of Information Systems. Case Study: Amazon.Com
Amazon.com
In 1994, with a handful of programmers and a few thousand dollars in workstations and servers, Jeff Bezos set out to change the retail world when he created Amazon.com (ticker: AMZN). Shel Kaphan, Amazon’s first programmer, assisted by others, including Paul Barton-Davis, used a collection of tools to create Web pages based on a database of 1 million book titles compiled from the Library of Congress and Books in Print databases. Kaphan notes that “Amazon was dependent on commercial and free database systems, as well as HTTP server software from commercial and free sources. Many of the programming tools were free software” [Collett 2002]. In July 1995, Amazon opened its website for sales. Using heavily discounted book prices (20 to 30 percent below common retail prices); Ama-zon advertised heavily and became the leading celebrity of the Internet and e-commerce.
Sales and Relationships
Amazon made its initial mark selling books, and many people still think of the com-pany in terms of books. However, almost from the start, the company has worked to expand into additional areas—striving to become a global retailer of almost anything. Some of the main events include: 1995 books, 1998 music and DVD/video, 1999 auctions, electronics, toys, zShops, home improvement, software, and video games [1999 annual report].
By the end of 1999, the company had forged partnerships with several other online stores, including Ashford.com, Audible, Della.com, drugstore.com, Gear.com, Greenlight.com, HomeGrocer.com, Kozmo.com, living.com, NextCard.com, Pets.com, and Sothebys. Of course, most of those firms and websites later died in the dot-com crash of 2000/2001.
Amazon also established partnerships with several large retailers, including Target, Toys ‘R’ Us, Babies ‘R’ Us, and Circuit City. Effectively, Amazon became a service organiza-tion to manage the online presence of these large retailers. However, it also uses its distri-bution system to deliver the products.
In 1994, with a handful of programmers and a few thousand dollars in workstations and servers, Jeff Bezos set out to change the retail world when he created Amazon.com (ticker: AMZN). Shel Kaphan, Amazon’s first programmer, assisted by others, including Paul Barton-Davis, used a collection of tools to create Web pages based on a database of 1 million book titles compiled from the Library of Congress and Books in Print databases. Kaphan notes that “Amazon was dependent on commercial and free database systems, as well as HTTP server software from commercial and free sources. Many of the programming tools were free software” [Collett 2002]. In July 1995, Amazon opened its website for sales. Using heavily discounted book prices (20 to 30 percent below common retail prices); Ama-zon advertised heavily and became the leading celebrity of the Internet and e-commerce.
Sales and Relationships
Amazon made its initial mark selling books, and many people still think of the com-pany in terms of books. However, almost from the start, the company has worked to expand into additional areas—striving to become a global retailer of almost anything. Some of the main events include: 1995 books, 1998 music and DVD/video, 1999 auctions, electronics, toys, zShops, home improvement, software, and video games [1999 annual report].
By the end of 1999, the company had forged partnerships with several other online stores, including Ashford.com, Audible, Della.com, drugstore.com, Gear.com, Greenlight.com, HomeGrocer.com, Kozmo.com, living.com, NextCard.com, Pets.com, and Sothebys. Of course, most of those firms and websites later died in the dot-com crash of 2000/2001.
Amazon also established partnerships with several large retailers, including Target, Toys ‘R’ Us, Babies ‘R’ Us, and Circuit City. Effectively, Amazon became a service organiza-tion to manage the online presence of these large retailers. However, it also uses its distri-bution system to deliver the products.