Amazon, Wal-Mart, and a Success Story for the Interconnected Era

Jim Poole

It was hailed as a “passing of the torch” by the Wall Street Journal, and there’s no doubt it was a huge milestone for online retail when a stock surge pushed Amazon’s market capitalization past Wal-Mart’s for the first time ever.

Commentary since the story broke has made it clear that it is inaccurate to say that Amazon is now worth more than Wal-Mart, or to start planning which shade of black to wear to the long-anticipated funeral of bricks-and-mortar retail. But the news also makes it impossible to diminish the rapid ascension of online retail, as represented by the roaring success of Amazon, a company of the interconnected era if there ever was one.

Amazon’s sprawling network of buyers/sellers/shippers – encompassing everything from food, to fashion, to flip-flops – demands the simultaneous, high-performance interconnection with global markets and partners that’s a hallmark of the era and critical to growth in the digital economy.

A Surprise Surge

The Amazon/Wal-Mart story broke July 23 after Amazon reported strong earnings, and its stock surged to $564 a share, putting Amazon’s market capitalization (the combined value of its outstanding shares) at $262.7 billion. That surpassed Wal-Mart’s market cap ($233.5 billion that day) for the first time ever.

Market cap numbers can change quickly, and experts noted that – factoring in cash and debt – Wal-Mart was still worth more than Amazon. But there was no denying Amazon’s surge was what InformationWeek called “a poignant moment for the Internet economy.”

“The premier online retailer is beating the premier brick-and-mortar big-box store,” it wrote.

The AWS Factor

InformationWeek was also among the outlets to note that Amazon isn’t just an online retailer, and suggest that it’s expanding Amazon Web Services (AWS) cloud platform can’t be discounted as an important source of the company’s overall strength.

In its latest earnings call, Amazon reported that AWS revenues were up 81%, year-over-year, to $1.82 billion. The Motley Fool noted that AWS is growing much faster than Amazon’s other businesses. The 81% increase in revenues, for instance, far outpaced the company’s North America segment, which grew by about 25%.

The AWS cloud is just getting stronger, and amid all the good news for Amazon, its success there shouldn’t be overlooked any more than its success with books and Kindles.

A First-Hand View

As one of Amazon’s top AWS partners, Equinix has helped expedite the connections that have fed AWS’s rapid growth. We offer AWS Direct Connect at 18 data centers globally, so AWS customers can quickly and privately move large volumes of data directly to and from services and partners on the AWS cloud platform. It’s more cost effective, and more secure, than transferring data over the public Internet.

We also enable online retailers everywhere to execute sales worldwide with speed, security and superior connections. We run 105 data centers in 33 markets on five continents, so we can move retailers close to whatever markets or partners they need. That proximity means lower latency, higher performance connections and better conditions for sales growth.

We’re built to help Amazon, Wal-Mart, and online retailers worldwide do business. Learn more about Equinix’s interconnection leadership at the link.

 

Jim Poole
Jim Poole Vice President, Business Development, Equinix, Inc.