Is AWS related to Amazon's core business? Why or why not? Some investors are pressuring Jeff Bezos to spin out AWS as a standalone company. Do you agree with this recommendation? Why or why not?

 

Amazon Web Services (AWS) is related to Amazon's core business. This is because it offers tech related services just as those offered by Amazon. It sells APIs and Cloud computing services to governments, individuals, and even companies. In addition, it has been a subsidiary of Amazon for many years. Amazon started as online bookstore before expanding to other products such as computers and basic needs.

I do not agree with spinning AWS out as a standalone company because of several reasons. Those pressuring Jeff Bezos to set the subsidiary aside do not understand the how the two benefit each other. To begin with, AWS benefits from good leadership of Jeff Bezos. Bezos has been the kingpin of Amazon since its initial stages and has seen it grow for tremendous. At the same time, the success of AWS can be attributed to his leadership skills. Sending the subsidiary alone may expose it to bad leadership hence making it fail.

Amazon and AWS combine efforts and capital to expand in new areas. When the two

operate under the same leadership, they are powerful when it comes to

advertising and investing. If AWS is left alone, it may lack money to publicize

its products and expand. This will be a great detriment.

When both Amazon and AWS work together, there is economies of scale. They use the

same leaders, the same transport media, the same communication media, and the

same infrastructures because they operate as one company. Taxes are relatively

lower than when they operate as two entities. This ensures they spend less

money and thus have ore capital to invest and expand. AWS and Amazon sell products

cheaply because of economies of scale.