INNOVATION AND ENTERPRISE PROPOSAL
Contents
Organization Background and a description of the Situation
Critical analysis of the Amazon Web Services
Introduction
Enterprise innovation is a complex, pertinent, dynamic subject that involves layers of processes and meticulous implementation strategies. At its center, however, it is a competitive advantage that drives research and innovation, particularly if the information technology sector is considered. In the assignment, an attempt is made to prepare an engaging proposal exploring the strength and the shortcomings of the web services offered by Amazon Corporation. In detail, the depth of research that goes on to develop a product or service is examined and substantiated by extensive literature. Credible emphasis is put to determine the role of innovation and the use of innovation theories and concepts in product planning and development. The product itself is critically analyzed to objectively determine its purpose and the extent to which it competently fulfills its objectives and in what and which manner it fails, and all possible recommendations are provided that can address those issues.
Organization Background and a description of the Situation
Amazon Corporation is an internationally acclaimed organization that was founded and is headed by Jeff Bezos. It was established in 1994 and since then has been in operation and has subsequently expanded to over 15 global marketplaces, including UK, Netherlands, France, India, Japan, Turkey, Australia, and many more. Amazon provides both products and services. It is among the largest selling e-commerce organizations in the world. Under its umbrella, it sells over 2,00,000 products in more than a thousand categories (amazon.com, 2020). It also has one of the most complex and diversified supply chain management systems in the world. However, besides retail and entertainment, Amazon also provides web services or, more specifically, cloud web services that can be availed by both consumers and traders alike to store data manage data and applications. Also known as AWS or Amazon Cloud Services, cloud computing technology is a developed technology or process that allows users to upload data or store data using the internet in virtual servers. In simple terms, cloud computing enables users to access data or services such as accessing databases, networks, emails, logistics, analytics, or other sensitive information from any server at any time very conveniently. Prior to the development of cloud computing services, data was conventionally stored physically, making it both a time consuming and cost-intensive process (Aws.amazon.com, 2020). The process of retrieving data was equally cumbersome, and in certain instances, data loss was inevitable, often causing disruption in services and financial loss. Cloud computing provided an innovative solution that shifted the onus of hardware system and data maintenance to vendors like Amazon, thereby considerably reducing the operational cost of organizations. Also, cloud services are stringently monitored for potential threats by competent professionals who make the platform much more secure than traditional systems. Moreover, the type of cloud services that are provided by Amazon, which is a mix of infrastructure, platform services, and packaged software services, is conveniently easy to use, inexpensive, and is able to maintain and perform several functions competently. However, AWS is not without its fault, and neither is cloud computing. Despite best efforts, commercial losses due to service outage are always a possibility, and in 2017, due to a technical glitch in AWS, public trading organizations had to bear losses that amounted to 150 Million Dollars. Further, cloud-based services are also prone and vulnerable to security threats. Shutdown, deletion, and addition of error-prone data have occurred in recent times that have questioned the security of data stored in cloud servers. Nevertheless, the benefits of availing of cloud services outweigh the concerns and the risks that it poses; however, by using innovative approaches, it is possible to improve service consistency and security.
Literature Review
The Merriam-Webster Dictionary defines innovation as “the introduction of something new, where something can be a service, product or process.” In entrepreneurship and as discussed while exploring literature, innovation becomes an incredible aspect of the entrepreneurial venture while expanding into new markets or niche and while investing in securing financial stability. In an aggressively competitive market, stagnancy is never an option, especially in information technology where developments occur every day and where problems that require immediate attention emerge on a daily basis (Christensen and Raynor, 2013). Jajjaet al. 2017, explores the link between a firm’s innovation strategy and product development with its performance using the resource dependence theory. The authors hypothesized that an organization’s intent to innovate its products, services, and processes plays a larger role in determining its organizational objectives and priorities (Jajjaet al. 2017). Backend supply chain and buyer-supplier relationship are also influenced by the purported intent of innovation on the part of the buyer as innovation within organizations and especially in product and service innovation organizations rarely possess the resources necessary to fully undertake the innovation process and at a certain point and on certain aspects must depend on its supply chain, and this mutual relationship is reflected in the firm’s overall performance. Moreover, the authors argue that by including suppliers in collaborative innovation, organizations improve their capacity to frequently address gaps in the market and cater to the developing needs of the consumers. For instance, Amazon introduced EMR or Elastic MapReduce, which provides the user with a Hadoop framework to enable them to conveniently work on Big Data analysis. A part of the reason Amazon has been able to introduce such innovative products in the market if analyzed using the resource dependency theory is because of its impeccable supply chain management and open collaboration (Demchenkoet al. 2017).
Innovation has always been eluded as a continuous process, and broadly speaking, the process can be further classified as either open or closed. In closed innovation, the organization maintains tight security around the details of product or service development implementing monopoly policies, excluding others from the knowledge of innovation and development (Keeley et al. 2013). The working environment in Apple Inc. is a prime example of closed innovation. Yun et al. 2016, links open innovation with business models to specifically understand the function of business models in an organizational framework and its importance in market expansion. The authors argue that business models are perhaps the most overlooked aspect of the organizational framework, and yet it performs a pertinent role in establishing economic sustainability. Despite this, an emphasis on business models is necessary for creating a competitive advantage in a market that is dominated by customer expectations (Yun et al. 2016). The developing principles of quality management and lean production also focus on delivering products and services that are tailored to meet customer expectations; however, cultivating innovation within organizations is not possible without addressing necessary changes in business models. Otherwise, a value proposition that is accepted as a core element of the business model cannot be adequately achieved. According to the authors, open innovation can yield the maximum benefits if it is adopted as a business model. The “customer open innovation-based business model” that the literature describes is composed of four steps, service business, co-creation, open innovation, and business model transformation. The basic founding rationale behind the idea is that collaboration can yield solutions that would have perhaps been overlooked otherwise, or collaboration favors the generation of new ideas, all of which, even though might not be equally effective but can be used to solve a certain problem more precisely and within a limited time frame. Amazon uses a similar approach; it uses “open source collaboration” to further its innovative technology and uses it effectively to make a profit (Ortiz-Villajos and Sotoca, 2018). A memorable example would be the enhancement of its Alexa product, a smart speaker, which can perform more than 30,000 functions and good three-quarters of which are a result of open source innovation. Amazon also uses open innovation in developing its cloud computing products. However, innovation for the sake of gaining a competitive advantage would be a disservice to the community, and it will also fuel unnecessary animosity. Responsible innovation is a concept that the entrepreneurial world considers as striking a balance between monetary profit and social benefit. According to Brand and Blok, 2019, responsible innovation is an attempt to assess the risks associated with a proposed development approach. Engaging in responsible innovation is important both for protecting the community and the environment as well as to ensure fair trade practices. The authors propose “deliberative engagement,” including both the stakeholders and the general population, as a mechanism to include ethics into innovative practices. It will address existing ethical concerns taking into consideration theories of ethical business practices that govern the competitive market (Brand and Blok, 2019).
Critical analysis of the Amazon Web Services
In a previous section, in brief details of the cloud computing service that Amazon provides has been touched upon and explored. Amazon Web Services is popularly known as is a virtual data center that is connected to the user through internet technology. It offers a host of data analytic, visualization, and storage services that can be accessed using the HTTP, SOAP, and REST protocol. A more recently developed version of cloud computing named the Amazon EC2 or “Amazon Elastic Compute Cloud” provides extended support for storing large volumes of data, preferably for Big Data analysis, and is also compatible with working with multi-core processors.
Traditionally, prior to the development of the cloud, computer data was stored in servers that are in simple language, either software or hardware components, or both that could both accept and process requests made by either computers or user clients over the network. There were many types of servers that performed the same task of accepting and responding to specific requests, namely web servers, mail servers, database servers, exchange servers, and many more. System administrators supervised the functioning of the servers, and in case the server was filled to the capacity, it was the responsibility of the administrator to incorporate a new server besides the old server; otherwise, the service would collapse, and the system would fail. Using the cloud computing technology, Amazon effectively eliminated the need for maintaining the hardware components, keeping only the operating system and the application making it redundant for organizations to invest in storage hardware’s and also removed the resource restriction that was previously there due to the inherent limitation of the computer hardware system. Amazon Web Services makes cloud computing service public, which implies that Amazon rents cloud services to organizations in exchange for a small price. According to Amazon, its web services is the most comprehensive service that is present in the market and can provide up to 175 categories of services, including financial services, manufacturing services, telecommunication services, hospitality services, advertising services, entertainment services, and healthcare services using its global data centers (aws.amazon.com, 2020).
AWS is indeed a popular cloud computing option among consumers and is evident from the fact that Amazon provides its services to more than a million customers that also include commonplace OTT entertainment service providers Netflix and their own Amazon Prime. And although cloud computing is neither a unique proposition nor exclusive to Amazon, yet it dominates the market since working with Amazon has multiple advantages. Using Amazon Web Services is cheap when compared to other similar services such as Microsoft Azure. For instance, Amazon charges 3.97 Dollars on an hourly basis for 3.84 TB RAM and 128 GB vCPU while its competitor Microsoft for similar service charges 6.79 Dollars, making an investment in Amazon services more valuable from the perspective of the cost compared to other reputed service providers. In retrospect, Amazon is able to keep the cost down since it provides aggregated service to several customers, making it easier for the company to achieve “economies of scale.” Another potential benefit of using AWS is obviously that the Amazon service is swift and agile.
However, AWS has disadvantages as well, and mostly it involves service quality and security issues. While discussed many times before, downtime or processing slowdown is a fundamental drawback of the system. Besides, there are other soft limitations of the system. For instance, Container networking is visibly a new concept that can be best described as a form of a virtual operating system similar to virtual machines, which are virtual hardware systems. Using AWS, it is not possible at present to deploy appropriate security policies at the Pods as it is possible to apply at each of the clusters, which creates a breach or blind spot as the consumer attempts to troubleshoot or enhance their visibility (cloudacademy.com, 2020).
Recommendation
Innovation is necessary for survival and is promoted for gaining competitive advantage within a stringently controlled aggressive market. It is an entrepreneurship approach that uses creativity to curate solutions to difficult problems (Drucker, 2014). As discussed, service outage is a primary concern regarding Amazon Web Services, and previously in multiple instances, it has happened that disruptions in web services have resulted in deep financial losses. As explained in the previous section, such incidences can occur due to several reasons, including human error. The recent AWS service failure was caused due to mistyping when an employee attempting to debug or fix a billing issue actually took down servers offline that were never meant to go offline. This resulted in a complete shutdown of services for over 4 hours. Absolutely unfortunate however it was preventable. Human errors are unpredictable and cannot be prevented indeed, yet its effect can be minimized if the data could have shifted to other available data centers. From the perspective of a consumer, an outage has serious economic implications, and certain strategies if implemented properly can indeed effectively minimise the impact. For instance, keeping slowdown or even outage in consideration it becomes pertinent to devise a disaster recovery plan that can take advantage of the “multi-availability zones” offered by Amazon. Prior to developing this contingency plan it will be essential to keep the organisational objectives in mind, for instance, if the business organisation is particularly sensitive to outage then a simple approach to mitigating the situation would be to assess the internal condition and set the minimum recovery time so as to maintain a continuous service. This strategy can potentially prevent damage to data even if it is caused due to mechanical or technology failure and will be invaluable for customers that are availing the service. Second issue that was identified through critical analysis is security issues or more specifically as described security issues that concern the network container.a credible solution for the issue would be to host the container in a focussed operating system. Besides, general security concerns that are associated with AWS cloud computing services can be reduced to an extent by deploying MFA or “multi-factor authentication” protocol. Another shortcoming of AWS is that the service can be technically daunting for amateur users. Oftentimes customers have difficulty while making a credible choice of instances or sometimes fail to make an appropriate tradeoff. Technical issues can be off putting for potential consumers and to attract more business it is necessary that Amazon creates a separate customised service for the benefit of untrained users.
Conclusion
The urge to create an innovative yet useful product drives business. Corporations invest in creating technology that will purposefully resolve an ongoing issue. Cloud computing technology was also developed to solve a particular problem that was the problem of storing and retrieving information. It was a disruptive innovation that in its initial years was limited but had immense potential and indeed in recent years to an extent has replaced traditional administrative and data storage systems. Google provides Cloud services, Microsoft does too, however the assignment focussed on the web services provided by Amazon Corporation. Amazon provides infrastructure, software and platform services that are easy to use, user friendly, and inexpensive. It is beneficial because it provides unlimited storage capacity and superior quality on demand data retrieval facilities. In conclusion, it can be stated that cloud computing services provided by Amazon is far from being perfect and it has several issues however these concerns can be addressed quite easily by developing a contingency plan and using the principles of customised services.
References
Books
Christensen, C. and Raynor, M., 2013. The innovator’s solution: Creating and sustaining successful growth. Harvard Business Review Press.
Drucker, P., 2014. Innovation and entrepreneurship.Routledge.
Keeley, L., Walters, H., Pikkel, R. and Quinn, B., 2013. Ten types of innovation: The discipline of building breakthroughs. John Wiley & Sons.
Journals
Brand, T. and Blok, V., 2019. Responsible innovation in business: A critical reflection on deliberative engagement as a central governance mechanism. Journal of responsible innovation, 6(1), pp.4-24. DOI: 10.1080/23299460.2019.1575681
Jajja, M.S.S., Kannan, V.R., Brah, S.A. and Hassan, S.Z., 2017. Linkages between firm innovation strategy, suppliers, product innovation, and business performance. International Journal of Operations & Production Management. DOI: https://doi.org/10.1108/IJOPM-09-2014-0424
Ortiz-Villajos, J.M. and Sotoca, S., 2018. Innovation and business survival: A long-term approach. Research Policy, 47(8), pp.1418-1436. DOI: https://doi.org/10.1016/j.respol.2018.04.019
Yun, J.J., Yang, J. and Park, K., 2016. Open innovation to business model: New perspective to connect between technology and market. Science, Technology and Society, 21(3), pp.324-348. DOI: 10.1177/0971721816661784
Online Articles
Demchenko, Y., Turkmen, F., de Laat, C., Hsu, C.H., Blanchet, C. and Loomis, C., 2017.Cloud computing infrastructure for data intensive applications.In Big Data Analytics for Sensor-Network Collected Intelligence (pp. 21-62).Academic Press. Available at: https://www.sciencedirect.com/topics/engineering/amazon-web-services [Accessed on: 12-11-2020]
Websites
amazon.com, (2020), About Us, available at: https://www.amazon.com/ [Accessed on: 12-11-2020]
aws.amazon.com, (2020), Amazon About Us, available at: https://aws.amazon.com/ [Accessed on: 12-11-2020]
Aws.amazon.com, (2020), Amazon Web Services Supply Chain, Available at: https://aws.amazon.com/automotive/manufacturing-supplychain/ [Accessed on: 12-11-2020]
cloudacademy.com, (2020), Limitations of Amazon Cloud, available at: https://cloudacademy.com/blog/5-aws-limitations-to-be-aware-of/ [Accessed on: 12-11-2020]