Cloud Computing – Book Industry > Name the company in your mind now – Amazon!

A Perfect Storm Comes- Cloud Computing

https://www.youtube.com/watch?v=gY2cNPj_KeY

While many of us have already heard about the phrase “Cloud Computing”, as well as the comments from IT experts that cloud computing presents a strategic opportunity for many different kinds of businesses as “an engine of growth”, not all have a clear picture of what actually cloud computing is . In October 2007, IBM and Google announced collaboration in cloud computing. Soon the term “cloud computing” become popular. (Chungye G et al, 2010) “The services of cloud computing are broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS)” [L.M. Vaquero et al, 2009]. Cloud computing also is divided into five layers including clients, applications, platform, infrastructure and servers. Simply speaking, cloud computing relies on “sharing of resources to achieve coherence and economies of scale, similar to a utility (like the electricity grid) over a network”. [Peter M & Timothy G, 2011] 

Video: What’s cloud computing

Integrated Advantages of Cloud Computing

1.   Increased speed and flexibility 

“The cloud is cheaper, but that isn’t really what is driving companies into it,” said Greg DeMichillie, the director of Google’s cloud business for corporations. “They want to be more experimental, faster, data driven. This is part of a larger change inside companies.”The cloud is using virtualization and automation to provide users with self-service computing products that provide infinite scale at low cost.

2.   Automatically latest and greatest update

Cloud vendor renews and updates the software safely alongside with the business demand which enables companies a low cost and a large-scale resources of fulfilling their tasks.

3.   Adoption is quick and simple

“As mentioned earlier, users access cloud applications on standard web browsers anytime, anywhere. Using web style user interfaces, like that of eBay or Yahoo, allows for more widespread adoption across the company without the need for detailed training.” (Lindsey L, 2013)

Rapid Expansion of Cloud

Automation provides self-services, near infinite scale, utility-based pricing and service. Analysts believe the pace is picking up across the handful of big tech companies providing cloud services. “Two years ago, public clouds were maybe 2 percent of all computing workloads,” said Lydia Leong, a senior analyst at Gartner. “Now they are more than 10 percent. By 2018, it will be more than 50 percent.”

Cloud Computing-Radical Innovation for Book Industry 

Source: http://money.cnn.com/2012/04/25/technology/amazon-ebook-prices/

Now you probably got a general idea about cloud computing, but the surprising fact is, many of us use cloud computing service that providing technological advantages all day long without realizing it! For example, low price or even free e-books, featherweight libraries, etc. No matter at school or in the subway, you just need a hand-hold tablet or mobile device. Have you noticed that, the printed book you once fell in love with already shifted to digital one, and the sales in bookshop dropped silently…?  There is no doubt that, the traditional book industry is going through a big revolution emerged by the storm power of cloud computing technology…

Video: Changing face of publishing industry

Video: Publishing industry evolution

By running the customers’ software within their own data centers and listening closely to their needs, cloud companies learn more quickly about customer behavior, figuring out which incremental improvement they can immediately deploy across their networks. And then they can turn around and give those customers exactly what they want.Cloud computing is the result of evolution and adoption of existing technologies and paradigms.Cloud computing shares characteristics with agility which could improve with users’ ability to re-provision technological infrastructure resources, the performance of cloud is monitored and consistent and loosely coupled architectures are constructed using web services as the system interface.

Vedio: You would be Surprised how much the global e-Book Industry is Worth

Video: From Print to 2.0: the Rise of the New Publishing Industry

There are various advantages of cloud book compared to traditional books.

Space and weight savings: Multimedia benefits, Depending upon the software support and used formats, non-textual multimedia can also be embedded into e-book pages as widgets, including images(and image galleries), videos, audio files and interactive (still or animated) models; This results in the ability of e-book to offer richer reading experiences than is possible through traditional, physical books.

Environmental savings: Printed books use three times more raw materials and 78 times more water to produce when compared to e-books. However, the manufacture and distribution of e-book hardware(both the readers and the servers where e-books are downloaded) consume materials and energy; the disposal of e-readers create electronic waste, and the storage, distribution, and reading of e-books consumer energy. But this problem could be solved through cloud computing application into book industry.

Automatic back-up: Depending on possible digital rights management, e-books (unlike physical books) can be backed up and recovered in the case of loss or damage to the device on which they are stored, and it may be possible to recover a new copy without incurring an additional cost from the distributor, as well as to synchronize the text, highlights and bookmarks across several devices.

source: http://teacherytidbits.blogspot.hk/2012/10/webquest-freebie-and-winners.html

“Electronic books are ideal for people who value the information contained in them, or who have vision problems, or who like to read on the subway, or who do not want other people to see how they are amusing themselves, or who are useless for people who are engaged in an intense, lifelong love affair with books. Books that we can touch, books that we can smell, books that we can depend on.”

source: http://solmagazine.wordpress.com/2012/10/28/journey-to-the-cloud/

Is the publishing industry somehow being destroyed by a combination of Amazon price cutting and a wave of Netflix watching, iPhone gaming and tweeting? Definitely not, though you might come away with that ridiculously pessimistic view from some recent coverage trashing Amazon’s role in the industry. Actually, book sales have risen strongly since 2008, not coincidentally since e-books came on the scene. There’s more than ever to read-thus people are reading more than ever. In addition, innovations have changed the way that people interact with each other, except for the increasingly more readers, but also more writers with disruptive way of publishing.

Amazon:The Virtual Book Giant

Well, when the Internet is there so why the hassle of carrying loads of books in your bag packs or hands. Cloud computing takes it all. No matter where you are, all you need is Internet connection to read while the clouds are in your pocket. And Amazon is there to get you the clouds.

With the emergence of technological world, the radical transformation of physical books into data, which is incremental technology and are available anywhere anytime. Amazon works usually starts with a company occupying the lowest cost, lowest quality part of a market. That’s precisely what Amazon is doing now: Offering cloud services at rock-bottom prices. Startups love it, and everyone from location-based social network Foursquare to document sharing site Scribed uses Amazon’s web services (AWS).For pitfalls Amazon should observe how the companies like HMV failed badly in CD/DVD business for not entering into the right technology at the right time.

The book industry has long had an uneasy relationship with Amazon since Kindle’s launch which built Amazon’s e-book kingdom while triggered a revolution of physical books reading at the same time. Kindle is Amazon's portable reader that could wirelessly download books, blogs, magazines and newspapers to a high-resolution electronic paper display that looks like real paper. Since the first generation of Kindle released in November 2007 which sold out in five and a half hours and remained out of stock for five months, Amazon has launched more advanced versions of Kindle with cheaper price and more function. In addition, Amazon is also the world’s largest seller and producer of audio books, with close to 600 million listening hours downloaded in 2013. One of its spoken-word programming called Whispersync for Voice, which allows customers to switch seamlessly between reading a book on Kindle and listening to the corresponding audio book on smart phone, is called “Amazon’s new killer app for books” by The Wall Street Journal.

Vedio: Amazon Kindle Voyage

One of the advantages Amazon offers book buyers that bookstores don’t is the breadth of selection. Amazon has a wider selection of books than bookstores. The second advantage is Low Cost Strategy. The price to purchase a book online is often lower than the cost bookstores offer. Amazon doesn’t have to pay for store furniture, decorations, floorwalkers, fancy buildings, etc. With lower operating costs per book and greater volume, Amazon can keep prices down.

Strategic Fit Analysis of Amazon’s E-book Business

With the view that Amazon’s resources and capabilities match the eternal reading demand and growth potential of cloud computing, Amazon’s e-book business is considered a competitive advantage of the company.

Business Environment
The potential opportunities for Amazon, books on cloud computing is the low cost strategy with no hassle of physical carrying of books. Readers who want to have hands on more than one book at a time have started this technology. In cloud computing finding book in lesser time, can download the books anywhere.

Growing Sales of E-book and E-reader

Introduction of e-book and e-reader, which is fashion, convenient and environmental friendly, has changed people’s reading habits and forced print media and book seller to conform to the new consumer behavior. Based on the huge world-wide demand for literature, increasing demand of e-book and e-reader becomes a global trend. According to industry estimates, e-book share of total book sales has been and will keep growing, which secures a steady stream of income for the company.

Growing Demand for Cloud Computing Services
The demand for cloud computing services is expected to grow significantly in the medium to long term. As stated, proportion of public clouds over all computing workloads has been increased rapidly, and spending on public cloud computing services is expected to grow at a compound annual growth rate of 23% during 2013-2017. Growing demand for cloud computing services is considered as an opportunity for Amazon.

Intense Competition in the E-reader Market
Competition in the e-reader market is extremely keen as not only the e-reader devices from industry players such as Barnes & Noble and Sony competing for a share in this growing market, but also the tablet including the Apple iPad and Android tablet acts as a substitute for e-reader device. Under such circumstance, price war is inevitable, which depress the price of Amazon’s Kindle series.

Core Competence

Leading Position in the E-book Market
Amazon has established and maintained its leading position in the e-book market. As of February 2015, there are over 3.2 million e-books available in the Kindle Store. Disregard the dropping selling price, sales of Kindle, as well as the e-books, has always been solid and satisfying, which contributes to Amazon’s earning growth. In addition to its strong research and development ability currently, Amazon’s strong financial performance enables the company to extend product lines and strengthen technical platform through strategic acquisitions. Plus the brand’s reputation, Amazon’s leading position is expected to continue.

Solid Background Operation Support
In addition to Amazon’s abundant financial resource, its technology resource is also considered as a competitive advantage of the company. AWS provides a highly reliable, scalable, low-cost infrastructure platform in the cloud that powers hundreds of thousands of businesses in 190 countries around the world. Backup by the solid background operation support from AWS, Amazon’s e-book business could benefit from the increasing demand for cloud computing services with less risks and more profitability, comparing to the case that depends on a third party cloud computing provider.

Business Elite
Jeff Bezos, founder and CEO of Amazon, is one of the most important reasons that lead to Amazon’s success. Bezos is a technology entrepreneur who has played a key role in the growth of e-commerce. With solid education background in electrical engineering and computer science, Bezos is sensitive to the business opportunities in information technology industry, proved by the step-ahead move before the boost of internet and cloud computing technology. Bezos once stated in an interview that, companies which innovate within their existing competencies are doomed to fail; innovation means building new competencies. Bezons acts just as what he said, which enables him to find good timing of new product entries, make quick and correct judgments and decisions, to lead Amazon to success.

Porter’s Five Forces Model Analysis for Amazon in E-books Business

1) Degree of existing rivalry: There are few existing competitors with the giant company like Amazon who has huge significant presence in the internet online industry. Amazon has competitive edge in IT sector of cloud computing for the e-books.

2) Threat of potential entrants: There is less chance of potential entrants with Amazon as the setup in IT business what Amazon has it is difficult to build similar huge IT setup.

3) Bargaining power of suppliers: Amazon has an advantage of large selection of books than bookstores.

4) Bargaining power of buyers: Amazon has advantage of having huge chain of customers due to its expanded business.

5) Threat of substitute: There is less chance of substitutes for Amazon due to its expanded business and high presence in market for a long time with huge quantity of customers.

Another potential opportunity for Amazon in e-books business, there is high flexibility and multiple players in market. It’s an emerging business for both buyers and sellers. The following video helps in determining Amazon’s flexibility and the multiple players who get associated with e-books business.

Vedio: How to self-publish your ebook on Amazon Kindle in 4 minutes

Recommendations

I.      We believe this is the right time for Amazon to expand in the field of cloud computing for e-books. As readers are looking for cost effective and convenient reading. And the trend of smartphones and tablets has been increasing and people like carrying tablets and smartphones instead of books so to perform multiple tasking. Like in one device they can do reading, browsing, communication, gaming, photography etc.

II.     Amazon should make deal with major big bookstores and should start doing either mergers or acquisitions with the bookseller companies. This is how they will expand the online book reading business. As Amazon has good technology setup both online and cloud computing and it will help the booksellers in setting and entering in online business.

III.   Amazon should make a flexible, smooth and efficient search engine to search the books. This would save a lot of time of the readers to search books and maintain their interest in reading.

References

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