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Amazon.com, Inc.’s (AMZN) Cloud Reels in Salesforce in Major Coup

Amazon.com Inc (AMZN) Salesforce

Amazon.com, Inc.’s cloud service Amazon Web Services (AWS) has gained a new client – Salesforce.com, Inc. . This is good news after losing key clients to both Microsoft Corporation and Alphabet Inc’s Google .

Amazon.com Inc (AMZN) Salesforce

Salesforce, a $50bn vendor of cloud software, will build portions of Internet of Things (IoT) cloud software. The deal offers it a chance to test its new software on Amazon’s cloud-computing platform.

Salesforce first announced its IoT Cloud last fall. The service gathers data from connected devices, analyzes it, and then suggests the best action for customer service and sales reps to take. It will be available by the end of this year.

Salesforce Won’t Transfer All Data Services to Cloud

While Salesforce has its own private data centers, it has shifted some of it to public cloud firms such as AWS. Tuesday’s deal means that it could transfer much of its data center functions to public cloud.

For Amazon, the Salesforce’s deal means big firms still find AWS reliable and suitable for their needs. Banks such as Capital One, as well as fast-growing startups such as Netflix remain on AWS for now. 

A huge test for AWS right now is for it to convince Uber, which is currently looking at bids from Amazon, Microsoft and Google, to sign up its cloud service. If the firm can get this big fish on board, it will show that Google and Microsoft still have a long way to go before they can catch up. 

Amazon’s AWS is currently the global market leader in the provision of public cloud infrastructure services. It has also been credited with pioneering the idea of having companies store their data in the cloud and manage their web services online for a fee.

However, Amazon shouldn’t expect Salesforce to fully migrate to its cloud service. This is due to the fact that Salesforce has several clients, some of which have stringent regulatory compliance requirements. This stance has been reinforced by Adam Bosworth, Salesforce executive vice president of IoT Cloud, who says the company will use both public cloud and in-house data centers.

Amazon’s cloud platform has been growing in leaps and bounds. Last quarter, its AWS division netted $2.6bn in revenue. Operating income stood at $604 million, which makes it the group’s most profitable unit. The revenue also grew 64 percent from the previous period a year earlier.

Salesforce introduced its IoT Cloud to assist its clients benefit from the massive trove of data collected from connected devices such as industrial sensors, smartphones and wearable devices. Trials are currently being conducted on the service with a few undisclosed customers and will be launched later this year.

Amazon Diversifies into Paid Video Services

Amazon has been diversifying its revenue streams away from its core ecommerce division. On Tuesday, it launched a war against YouTube by including an interface on its video service to allow users to post their works online to generate revenue.

The online retailer launched Amazon Video Direct which will enable users to upload videos to be viewed online and earn ad revenues. This makes it similar to YouTube, where video uploaders also earn revenue on ads.

Amazon Video Direct was launched hours after the parent company turned Amazon Prime Video into a standalone subscription service. This is part of the company’s efforts to dislodge Alphabet’s YouTube from its enviable perch. YouTube already has an ad-free subscription service known as YouTube Red. Users pay a monthly fee of $10 to access the site.

Amazon offers video developers the option of renting their works, providing them on subscription channels or for purchase. This means Amazon now has several options for distributing videos. This includes the self-service option that is associated with Amazon Video Direct. The service will enable video producers to market their content as premium subscription service.

Hence the platform makes it easier for content creators to connect with their audience, and for the audience to access interesting content.

Amazon also used the occasion to unveil a Stars program that aims at attracting video developers to its site. The program offers content creators a chance to share a million dollars every month. However, the amount will be shared based on how many views are generated.

Some of the big names that partnered with Amazon to launch Amazon Video Direct include Samuel Goldwyn Films, Conde Nast Entertainment, Machinima, Mattel, Mashable and The Guardian.

The Seattle-based Amazon has touted Direct as augmenting a video service with unlimited access to tons of TV episodes and movies. It also includes original productions. For a start, Amazon Video Direct will be available in the U.K., US, Japan, Austria and Germany.

The launch of Direct comes almost a month after online talent company Fullscreen unveiled a subscription video service. The company used to publish its content on free sites such as Instagram, YouTube and Snapchat.

Analysts are wondering how Direct will outdo YouTube, the world’s biggest video platform. This could be possible with the incentives offered to the content creators, but it remains a wait-and-see proposition.

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