The Amazon Way on IoT

An insightful study of Amazon.com’s Internet of Things practices that aims to help guide business leaders in applying this emerging technology.

While some executives may perceive that the “Internet of Things” is merely a catchphrase, Rossman (The Amazon Way, 2014) thinks differently. He cites studies that suggest that nearly 20 billion devices will be connected via the internet by 2020 and that as much as $11 trillion annually will be saved through IoT–related efficiencies by 2025. As a former Amazon executive, Rossman has an insider’s perspective on exactly how that company has been pursuing its IoT strategy. Before he explores “the Amazon way,” however, he offers a cogent, detailed overview of IoT itself, which he characterizes as “the ability to create digital awareness of the physical world we live in.” He provides several illustrations of how cities are already employing IoT to improve the lives of ordinary citizens; people in Santander, Spain, he notes, use a smartphone app that offers “services like parking search, environmental monitoring, the digital city agenda, and deals from local merchants.” This background helpfully demonstrates that IoT is far from theoretical. The bulk of the book is centered on 10 principles, one per chapter, that Rossman believes represent Amazon’s strategic use of IoT. He describes each in detail and supports it with numerous specific examples of Amazon’s own applications. For instance, Principle 1, “Reinvent Customer Experiences with Connected Devices,” discusses Amazon’s obsession with its customers, highlighting breakthrough features such as customer reviews, free everyday shipping, one-click shopping, and Prime membership. Particularly interesting is the behind-the-scenes detail surrounding two newer innovations, “Dash buttons,” which allow automatic orders by the pressing of a single button, and drones. Other principles, which include “Do the Math: How IoT Enables Data Collection, Metrics, and Algorithms” and “How to Become a Platform Business Using the Internet of Things,” are no less intriguing. Rossman’s observations throughout are really the heart of the book, as he breaks each principle down into logical steps and, more importantly, counsels readers about how to apply Amazon’s lessons to any business. Sagacious advice, such as “Successfully innovating with the Internet of Things requires a big and powerful vision, but to reach that vision, you’ll need to create and learn from a series of small, agile experiments,” is both sensible and reassuring.

A futuristic yet pragmatic work that provides a peek into Amazon’s IoT prowess.