Post Corona: From Crisis to Opportunity

by Scott Galloway

One of Amazon’s arsenal of gangster moves is turning expense lines into revenue lines. It’s one of Bezos’s best tricks, and like so much else they do, it is made possible by a combination of scale and ultra-low-cost capital. This is how it works. First, a company gets really good at its essential, but non-core, business functions. Amazon is an online store, so it needs a great web back end, which means a superior data center. World-class data centers are essential to Amazon’s business, but running them is not its core business. The way most companies get really good at stuff like this is they pay someone else to do it. That’s what business gurus have preached for decades: focus on your “core competencies” and outsource everything else. Amazon flips this around. It doesn’t pay someone else to run its data center. It takes advantage of its massive data center volume, and its ability to invest essentially unlimited capital, and the company builds the best data center management competency on the planet. That’s step one. Step two is Amazon turns around and starts selling that competency to other companies as a service. Thus is born AWS, the largest cloud services provider by a wide margin.