How Amazon Is Becoming a Leader in IoT? Part 1.

The term “Internet of Things” was coined back in 1999, but it’s only now, well into the 21st century, that connected devices are becoming common. The world’s population of IoT devices is already many times larger than the world’s human population, with an estimated more than 16 billion connected devices already in place. That device population is growing by 20% in a single year, from 2013 to 2014; if Amazon sold only a fraction of that number, it would be a hefty boost to the firm’s revenue.

So there’s no surprise that Amazon’s working hard to find its place in the IoT market. What’s surprising is the multifaceted approach the company is using.

Selling IoT Devices

Amazon’s customer base is bigger than the population of Brazil, and for many of those customers, Amazon is a one-stop shopping destination. Amazon’s home automation shop gives customers a sleek entry point for purchasing everything a consumer needs to outfit their smart home. The site groups products into categories including Energy & Lighting, Monitoring & Security, and Entertainment.

For customers who are overwhelmed by the complexity of these new unfamiliar devices, the shop has a series of buying guides to help consumers decide what features they need and whether the products will be compatible with the rest of their home electronics. Kits and bundles make it easy for potential customers to get everything they need with a single click. The new Amazon Home Services market means consumers can even find the help they need to install their new purchase right on Amazon.

Making IoT Devices

You could say Amazon’s been making IoT devices since it sold the first Kindle in 2007, but it’s moved a long way from downloading eBooks to IoT.

It’s hard to imagine an errand less amenable to Internet of Things automation than grocery shopping, but when Amazon rolled out the AmazonFresh grocery delivery service nationwide earlier this year, it also rolled out Amazon Dash. The Dash wand let users create their grocery list on Amazon by scanning barcodes on products at home. It also let users add items to their shopping cart by speaking the product name.

Amazon also offers the Dash Button, which brings IoT functionality to shopping. The button is a small device programmed to order a specific item whenever it is clicked. The cleverness of this device is in branding that ties it to reorder decidedly non-IoT products like laundry detergent.

The microphone in the Dash wand requires the user to press and release the microphone button. Amazon took voice control and home automation one step further with Amazon Echo, a smart assistant for the home. Echo’s microphone can hear users from anywhere in the room, and the product does more than just add items to a shopping cart. Echo connects users to the Internet and answers spoken questions. It’s also an audio system, letting users control music services like Pandora and Amazon Music hands-free. Echo becomes a core part of a smart home with new functionality giving the ability to control Hue and WeMo devices. Since the WeMo family of products includes outlets, a crockpot, and a humidifier, this means Echo will be able to serve as a control hub for a smart home filled with smart devices. Like many IoT devices, Echo gets updated automatically via the cloud.

The last devices to remember when talking about Amazon and the Internet of Things are the delivery drones Amazon recently got FAA approval to test. They will undoubtedly send real-time communication over the Internet to allow customers to track their location and maintenance and logistics managers to address service and operational issues. With Amazon Prime Air’s stated goal of delivering within 30 minutes, items ordered online will be delivered more quickly than a pie from your neighborhood pizzeria.

Selling Software and Environments to Support Internet of Things Devices

Although retail in general is a low-tech industry, Amazon’s built such an advanced technology environment that it sells technical services to other companies. Amazon Web Services provides a suite of cloud-based services that are scalable and secure and easily adapted to support the computational needs of IoT devices.

Start by setting up an Amazon Elastic Compute Cloud (Amazon EC2). Companies can bring up new servers in a fraction of the time it would take to purchase, configure, and install hardware in their own data centers. Once the EC2 instance is up, Amazon’s software products provide the services companies need to manage and support their IoT devices.

Amazon Kinesis supports real time data processing for large streams, with capacity to handle terabytes of data per hour. That’s the kind of processing capacity needed to handle the data generated by those billions of IoT devices. Companies can trigger an automatic response to an event using AWS Lambda, which can get input from Kinesis or be called directly from IoT devices and respond both synchronously and asynchronously.

Amazon also provides ways to store all that data, using Amazon Simple Storage Services (Amazon S3) or the Amazon RedShift data warehouse. Once data is in RedShift, it can be analyzed using standard business intelligence tools, quickly enough to provide real-time metrics and real-time analytics. It can also be analyzed using AWS Elastic MapReduce, which is a Hadoop environment for big data analytics.

One of the biggest moves Amazon has made in their commitment to building—and selling—an environment to support IoT computation is further seen in its recent acquisition of 2lemetry, the builders of a highly sophisticated IoT platform. 2lemetry describes their ThingFabric Platform as an IoT version of enterprise middleware, providing connectivity, communication between applications, storage, and a rules engine, among other services. This, above much else, shows their plans of becoming big players in the world of IoT.

Shaping the Functionality of Future IoT Devices

The software products available through Amazon Web Services can be used for many purposes in addition to IoT. When Amazon rolled out the Dash Button, it also rolled out the Dash Replenishment Service, which integrates directly with IoT devices. DRS will let manufacturers use Dash functionality to reorder consumable supplies, either by integrating a Dash button into the device or reordering automatically when the device notices the supply level is low. They’ll allow DRS in products sold via Fulfillment by Amazon as well as those sold directly on Amazon.

Amazon is shaping future IoT products as well as selling them, and providing an environment to run their backend processes. With a presence in just about every facet of the Internet of Things and a worldwide reach that extends to consumers, businesses, and manufacturers, Amazon has the ability to influence the future of IoT like no other company before it.

In a follow up post, we’ll take a look at some other things we expect to see from Amazon in the near future. Stay tuned!

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