Tuesday, March 5, 2019

Amazon Took Over The $176 Billion Market For Cloud Computing. Now It's Using The Same Playbook In Logistics.

Amazon announced the day after Christmas that it delivered an astounding 1 billion parcels over the holiday season "for free."
The complicated logistics network that allows Amazon to move goods from factory to ship to loading dock to train to truck to fulfillment center to van to your doorstep is anything but free.
Amazon's worldwide shipping costs have grown fifteenfold from 2009 to 2018. Net sales have increased by sevenfold in the same time.
"Amazon is doing everything possible to keep their shipping expense low because it's ballooning," Marc Wulfraat, the president and founder of supply-chain consultancy MWPVL International, told Business Insider.
One strategy to keep shipping costs low, according to Amazon CFO Brian Olsavsky, is moving more and more of the company's shipping in-house instead of relying on third parties such as UPS, FedEx, or USPS. He said on a recent investor call that Amazon can move its own packages more accurately and more cheaply.
Read more:It's becoming clearer than ever that Amazon is developing a 3rd-party logistics service to edge out FedEx and UPS now that Stamps.com has dumped USPS
"We have great third-party partners as well in the transportation space," Olsavsky said. "What we like about our ability to participate in transportation is that a lot of times we can do it at the same costs or better and we like the cost profile of it, too."
SEC filings; Andy Kiersz/Business Insider
But numerous industry experts point to another motivation for Amazon's sudden build-up of branded Amazon planes, trucks, and delivery vans, as well as its ever-expanding network of fulfillment centers.
Rather than simply looking to shrink its shipping cost, they told Business Insider that Amazon is adding yet another business to its roster: shipping and delivery. Amazon declared itself a transportation company in its most recent SEC filing and is rolling out a third-party shipping service for merchants on its website.
"The fact is that Amazon has always been a logistics and supply-chain company," Michael Zakkour, the vice president of global digital commerce and new retail at Tompkins International, told Business Insider. "The greatest trick that Jeff Bezos ever pulled is allowing people to believe that he wants to create the everything store. Bezos has concentrated his investments around logistics and technology."
'This is not a small network'
Morgan Stanley analyst Ravi Shanker said it's clear that Amazon is looking to break into third-party logistics by looking at its quickly expanding network.
"In the last three years, Amazon has built a global end-to-end logistics network that comprises of their own internal last-mile network, their own trucks, their own trains, their own planes, their own truck brokerage, and their own air and ocean freight forwarding," Shanker said.
"Even Amazon, as big as they are and growing as fast as they are, will not be able to fill up this network on day one," he added. "So similar to what they did with AWS, we think it's very logical for them to improve the utilization of their network and lower their own costs by opening up to third parties."
Amazon also relies on UPS, USPS, FedEx, and other delivery partners. Peter Wynn Thompson/AP Images for Amazon; Yutong Yuan/Business Insider
These moves are quick, too. Amazon's air cargo network, which launched only in late 2015, already consists of 40 Boeing 767s, with 10 more to deliver this year and in 2020.
Morgan Stanley analysts said Amazon could scale to 100 planes by 2025. It services more than 20 domestic locations, and three more Amazon Air gateways are underway to launch this year in Ohio, Illinois, and Texas.
After three years of being in air cargo, Amazon already has 760 cargo flights a week, according to Wulfraat.
"This is not a small network," Shanker said. "We believe that today Amazon can bring a box from China to my door entirely on their own network if they wanted to."
Wolfe Research; Andy Kiersz/Business Insider
These moves don't indicate that UPS or FedEx should be fearful for their businesses anytime soon. Both offer logistics services far beyond moving products from factory to fulfillment center to doorstep.
"We don't make comments about other companies' business strategies or decisions regarding UPS's services," a UPS spokesperson said. "We are confident in our strategies and believe there is tremendous opportunity for continued business-to-business (B2B) and business-to-consumer (B2C) growth."
UPS, for instance, provides logistics solutions for a slew of industries: high-security defense, complicated automotive manufacturing, and healthcare — even processes like liquid-nitrogen dry-vapor shipping of medicine.
Amazon's moves in logistics lines up with how it launched Amazon Web Services, the company's cloud-computing solution, which is now the leader in a $175.8 billion market. "They're copying the AWS model for logistics and supply chain," Ladd told Business Insider.
It's two different businesses," Helane Becker, the Cowen managing director and senior research analyst, previously told Business Insider. "What FedEx and UPS does is not the same thing that Amazon is doing."
Read more: UPS CEO David Abney has finally said he sees Amazon as a competitor
Moreover, Amazon's 50 planes — or even its potential for up to 100 by 2025 — doesn't quite stack up to the 550-plus aircraft that UPS owns or leases or FedEx's fleet of 678. And while the Seattle-based e-commerce giant has 760 flights a week, UPS has 16,100, according to a UPS spokesperson.
And some analysts like Bernstein's David Vernon doubt that customers would want to use Amazon Air. He wrote that airport to airport, Amazon Air is cheaper than UPS or FedEx because of Amazon Air pilots' lower salaries. Yet FedEx and UPS are still more cost effective door to door.
"It is reasonable to conclude that this service is neither a replacement for a FedEx of UPS network nor is it a viable commercial alternative for third party shippers," Vernon wrote in an analyst note in December.
Amazon did not provide a comment.
From cloud computing to logistics
While Amazon's logistics offerings are still meager compared to the massive global network that UPS and FedEx have, former Amazon executive Brittain Ladd, now an independent supply chain consultant, said it's clear that Amazon is indeed set on launching a third-party logistics service.
"They're copying the AWS model for logistics and supply chain," Ladd told Business Insider.
Attendees of AWS' 2017 conference Reuters
AWS began as an internal platform in 2002, and two years later Amazon opened it to the public. It was officially launched in 2006.
From those roots as an internal platform, AWS is now larger than its four major competitors combined, even though they're deep-pocketed, established tech companies including Microsoft, Google, Alibaba, and IBM. It offers services from blockchain to satellites to machine learning for customers like Kellogg's, the government of Singapore, and Spotify.
Read more:Amazon Web Services is underpinning the technology at a $1 billion driverless trucking startup — and it shows how Amazon wants to control its supply chain and cut its $28 billion yearly shipping bill
Amazon launched AWS as that industry was beginning to explode. In FedEx and UPS, Amazon faces two mature competitors that for now have far more in the way of planes, trains, and automobiles, not to mention a developed logistics offering that helps myriad industries keep their goods secure, temperature-controlled, and delivered in a timely manner.
But Ladd isn't the only industry insider to see similarities between Amazon's logistics moves and its AWS playbook. Morgan Stanley's Shanker and Stamps.com CEO Ken McBride, who told investors last month that Amazon's infant logistics network is better than the 227-year-old US Postal Service, have said the same.
"Amazon will only enter a category or acquire a business that they know they can scale," Ladd said. "When it comes to residential delivery, when it comes to contract commercial logistics, Amazon not only knows it can enter those categories, but they scale those categories and do a better job than UPS and FedEx can."

Roku Vs Amazon Fire TV: Which Streaming Device Is Best For Netflix, Hulu And YouTube In 2019?

roku stick amazon fire tv stickSarah Tew/CNET
Looking for a cheap, easy way to get streaming video from Netflix, Amazon Prime, Hulu, YouTube, HBO, ESPN and everything else on to your TV? You have two excellent choices: Roku and Amazon Fire TV. 
Roku has long been the most popular name in media streamers, but recently Amazon's Fire TV system has been gaining ground. In my in-depth reviews, both work great, and most of the Roku and Fire TV streamers I've reviewed have received an 8.0 (excellent) rating or higher. 
They have more similarities than differences.  
  • Both are super-affordable, starting at $30 for Roku and $40 for Fire TV. 
  • Both have access to approximately umpteen zillion TV apps, including all of the major ones (with some exceptions; see below), and most apps look and behave basically the same on both -- even YouTube on Fire TV.
  • The latest models are pretty much equally quick, responsive and reliable as long as you have a solid internet connection.
  • Both (except for the cheapest Rokus) offer remotes with TV volume and power buttons to control most TVs, so you can ditch the remote that came with your TV. 
  • Both have numerous models, starting with basic streamers up to 4K-compatible versions with voice, device control and headphone jacks built into the remote.
  • So which one's better? It depends on what you want. 
    Disclaimer: CNET may get a share of revenue from the sale of the products featured below.
    Best overall: Roku
    My go-to recommendation is Roku. Here's why.
    Better menus. Roku's no-nonsense menu system places the apps themselves front-and-center and lets you arrange them however you please, just like on your phone. It gets me to the apps and shows I want quickly, without filling the screen with other junk.   
    29-roku-screenshots29-roku-screenshots
    Roku's menus are all about the apps, just like your phone.
    Sarah Tew/CNET
    Using a Fire TV stick means wading through a bunch of TV shows and movies in addition to the apps themselves. That would be fine if they were the TV shows and movies I'm in the middle of watching, or might actually want to watch -- something Netflix's menus do well. But more often than not, I don't care about the TV shows and movies on Fire TV's screen. They just seem like stuff Amazon or its partners want me to watch.
    46-toshiba-insignia-amazon-fire-tv-edition46-toshiba-insignia-amazon-fire-tv-edition
    In addition to apps, Fire TV's menus are packed with stuff you may not care about -- much of it from Amazon itself.
    Sarah Tew/CNET
    Better search.  Search results on Roku are straightforward and price-centric. You're shown how much a movie or TV show costs and can click through to watch or buy it -- and if it's free because you're a subscriber, you'll see that, too. Fire TV's results are much more confusing, with multiple options and false positives. And once you find what you want, you're shown just one primary service, and you have to click through to see "more ways to watch."
    More apps. Roku has pretty much every app you could want, including Amazon Prime video, of course. Fire TV also has pretty much every app under the sun, so this isn't a huge differentiator -- unless you want YouTube TV, one of our favorite live TV streaming services, or Vudu or Google Play Movies and TV, two major sources of recent movies to buy or rent that compete directly against Amazon video itself. Fire TV's Movies Anywhere app is a good substitute for those latter two, however.
    Now playing: Watch this: Which is better: Roku or Amazon Fire TV? (The 3:59, Ep....
    4:56
    Cheapest: Roku Express (unless Fire TV is on sale)
    The cheapest Roku player is the $30 Roku Express, a fine choice for a bare-bones streamer. It brings all of the advantages of Roku I mentioned above, and performs perfectly well, but lacks any of the extras discussed below.
    The cheapest Fire TV is the $40 Fire TV Stick, which regularly sells for $40. It has more features than the Roku Express, including a voice remote and TV control, and often goes on sale for $30.
    See the Roku Express at AmazonSee the Fire TV Stick at Amazon
    Of course there are a bunch of other more-expensive Roku players -- six in all -- and two more-expensive Fire TV streamers. Many of them are better choices than these basic versions because they don't charge much more for additional very useful extras.
    Speaking of extras, there's a variant called the Roku Express Plus ($35) that's designed for older TVs that lack HDMI ports. Every Fire TV device requires a TV with HDMI. 
    See the Roku Express Plus at WalmartBest for 4K TVs: Roku Streaming Stick Plus
    This is a close one, but in my opinion the edge still goes to Roku. 
    The main battle is between the $60 Roku Streaming Stick Plus and the $50 Amazon Fire TV Stick 4K.
    See the Roku Streaming Stick Plus at AmazonSee the Fire TV Stick 4K at Amazon
    Aside from the main advantages above (interface, apps and search), Roku also has access to more 4K content via the Vudu and Google Play Movies and TV apps, which Fire TV lacks. Amazon's own library of 4K HDR movies to rent and buy is paltry in comparison to Vudu's. Yes, you can always rent and purchase stuff via those services (or iTunes) separately and use the Movies Anywhere app on Fire TV to watch it, but it's convenient to do everything on a single device.
    The Fire TV Stick 4K's main advantage over Roku is compatibility with the Dolby Vision HDR format, which might be important to you if your TV performs significantly better with DV than standard HDR. But for most people, that advantage doesn't overcome Roku's strengths, even at $10 cheaper.
    32-toshiba-insignia-amazon-fire-tv-edition32-toshiba-insignia-amazon-fire-tv-edition
    Want to watch TV hands-free, commanding the TV with just your voice? Fire TV + Alexa speaker, like this Echo Dot, works better than Roku + Google Home.
    Sarah Tew/CNET Best for voice: Fire TV + Alexa
    If you care about using voice control to find TV shows and movies, Fire TV wins.
    Yes, Roku offers voice search on its remote starting with the $50 Roku Streaming Stick and Premiere Plus, but every Fire TV has this feature, including the $40 basic Fire TV Stick. 
    Both let you easily search, launch apps and control playback (fast-forward, pause, etc.) via voice, but Fire TV also lets you do everything Alexa does, including control smart-home devices, get a weather report and answer questions, complete with on-screen results. Alexa's voice also talks back through the TV's speakers.
    If you have an Alexa speaker like an Echo Dot, you can do pretty much everything hands-free on Fire TV (no remote required) with standard Alexa commands. Say "Alexa, watch Roma" and Fire TV launches Netflix and starts playing the movie, for example. 
    See the Fire TV Stick + Echo Dot bundle at AmazonSee the Fire TV Stick 4K + Echo Dot bundle at Amazon
    Roku players work in the same way with Google Home speakers but not as well. Netflix doesn't work with Roku and Google Home and you have to remember to say "Roku" at the end of every command ("OK Google, launch Hulu on Roku"). Still, if you own a Google Home speaker already and want to use it for TV control, Fire TV isn't an option.
    Roku streamers also work with Alexa speakers subject to the same restrictions (no Netflix support, must say "Roku" in the command). 
    roku-streaming-stick-2016-product-17.jpgroku-streaming-stick-2016-product-17.jpg
    You can use the Roku app on your phone for private headphone listening with any Roku player
    Sarah Tew/CNET Best for private listening via headphones: Roku (especially Roku Ultra)
    Roku has long had a really cool feature on its higher-end players: A headphone jack built into the remote control itself. You just plug your headphones into the clicker and the audio on the TV or soundbar mutes automatically, and sound comes through the headphones instead, complete with volume control on the 'phones.
    Unfortunately, among the latest Rokus, only the $100 Roku Ultra comes with a headphone jack remote.
    See the Roku Ultra at Amazon
    If you don't want to spend all the way up for the Ultra you have two options. You can buy the Roku Enhanced Remote, which has a headphone jack, for $30. It pairs with any recent Roku streamer and even adds voice search. Or you can use the free Roku app on your phone. It works exactly the same as with the Ultra -- just fire up the app and attach headphones to your phone. 
    Fire TV's only option for private listening is to pair Bluetooth headphones, but it's not nearly as effective. Doing so can introduce audio lag (lip sync error) and you'll need to have a volume control built into the headphones.
    25-amazon-fire-tv-with-tv-control-alexa-voice-remote25-amazon-fire-tv-with-tv-control-alexa-voice-remote
    With a mute key and the ability to command sound bars and receivers in addition to your TV, Fire TV's remote is better for device control.
    Sarah Tew/CNET Best for TV and device control: Fire TV (especially Fire TV Cube)
    Both Roku and Fire TV offer devices with buttons on the remote designed to control your TV. It's a great feature, because it allows you to ditch your TV's own remote and use the streamer's clicker for everything. In both cases setup is dead-simple -- the streamer automatically recognizes your TV and programs the remote wirelessly, without you having to do anything besides confirm it works -- but Fire TV is cheaper and more capable.
    The cheapest Roku streamers that come with TV control remotes are the $50 Roku Streaming Stick and Premiere Plus. The Fire TV Stick 2019 has a TV control remote for $40.
    Roku's remotes have buttons for TV power and TV volume up/down. Fire TV's remotes have those too, but add a mute button.
    Roku's remotes can only control televisions, but with Fire TV you can also control sound bars and even AV receivers. Yes, if your TV supports HDMI CEC and you have an HDMI sound bar, the Roku's volume and power buttons can probably control it, but Fire TV's remote can control pretty much any bar.
    60-amazon-fire-tv-cube60-amazon-fire-tv-cube
    The unique Fire TV Cube can control your TV and a bunch of gear using "Alexa" voice commands.
    Sarah Tew/CNET
    And Roku doesn't have anything like the $120 Fire TV Cube. A little box designed to sit near your TV, it combines all the capabilities of the Fire TV Stick 4K (except for Dolby Vision HDR) and all the capabilities of an Echo Dot, plus the unique ability to control a full-on entertainment system via voice. Using it can sometimes feel like magic, but it's not for everyone. Check out the video below if you're curious.
    See the Fire TV Cube at Amazon
    Now playing: Watch this: Amazon's Fire TV Cube gives you and Alexa hands-free...
    3:06
    By this point you hopefully have enough info to decide for yourself which of the two most popular streamers works best for you. For our full reviews of Roku and Fire TV devices, as well as their competitors like Google Chromecast, Apple TV and Nvidia Shield, check out our list of Best Media Streamers. 

    Amazon, Long Seen As A Threat To Malls, Is Now A Hot Tenant

    Shopping center owners have long blasted Amazon.com Inc. as a destroyer of their business. Now some are starting to view Amazon as a potential savior.
    At a time when Sears Holdings Corp. and Macy’s Inc. are shutting down stores, and many malls are struggling to attract high-profile tenants to fill empty spaces, the giant online retailer has been ramping up its presence in physical retail.
    Amazon...

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