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Amazon Analysis

In: Business and Management

Submitted By Baseball35
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In the first years, Amazon intentionally kept its website systems separate from its order-fulfillment system. The separation was partly due to the fact that they did not have the technical ability to connect them, and partly because the company wanted to improve security by keeping the order systems off the Web. By 1997, Amazon‘s sales had reached $148 million for the year. Their databases were being run on servers while applications were being written in house. By early 2000, the company had over 100 separate database instances running on a variety of servers. These servers were handing terabytes of data. In 2000, Amazon decided to overhaul its entire system. The company spent $200 million on new applications, including analysis software from Epiphany, logistics from Manugistics, and a new DBMS from Oracle. The company also signed off on deals to work with SAS for data mining and analysis. However, the biggest deal was with Excelon for business-to-business integration systems. The system enables suppliers to communicate in real time, even if they do not have sophisticated IT departments. It provides a direct connection to Amazon‘s ERP system either through programming connections or through a Web browser. About the same time (May 2000), Amazon inked a deal with HP to supply new servers for IT department. The new systems ran the open-source Linux operating system. The return on investment was seen in 2001. Amazon was able to cut their IT costs by 24 percent in 2001 when compared to their IT costs in 2000. By 2004, the supply chain system at Amazon was a critical factor in its success. Jeffrey Wilke, Senior VP of worldwide operations, observed that ― “When we think about how we‘re going to grow our company, we focus on price, selection, and availability. All three depend critically on the supply chain” [Bacheldor 2004]. Almost the entire system was built from...

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