This report is the first in the author's Webscale Playbook series, which analyze the “Super 8” Webscale network operators (WNOs), i.e. Alibaba, Alphabet, Amazon, Apple, Baidu, Facebook, Microsoft, and Tencent. The objective of this report is to assess Amazon's:World’s Biggest R&D Spender Continues to Invest Heavily in Networks as it Disrupts New Markets
- Latest quarterly key performance indicators including revenues, capex, opex, R&D, etc.
- Network vendor relationships, M&A, and partnerships across different network product categories
- Network-related strategy
- Disruptive impact on the network infrastructure market.
- As a percentage of revenues, Amazon spends more on R&D than capex, which is typical of WNOs. The gap between the two spending, however, is somewhat shrinking which goes to show Amazon’s greater efforts in building datacenters and warehouses in the recent years. Amazon has emerged as the top R&D spender among WNOs over the past two years, due to Prime Video.
- Amazon currently manufactures some of the network components such as routers, chips, network interface cards, and network gears to meet the growing needs of its cloud business (AWS). The internet giant, known for disruption, could foray into the enterprise networking market and sell its own custom-made hardware by 2020, taking the incumbent network vendors head-on.
- However, Amazon is also creating a host of new opportunities for network vendors, as it looks to disrupt different industries such as automotive (driverless cars) and healthcare (online pharmacy and heart-rate detection device), both requiring a strong network infrastructure to enable data transfers and communication between sensors and components.
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List of Exhibits
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Companies Mentioned
- Alibaba
- Alphabet
- Amazon
- Apple
- Baidu
- Microsoft
- Tencent
- Acacia
- ADVA
- Cavium
- Ciena
- Finisar
- Neophotonics
- Oclaro
- Xilinx
- Annapurna Labs