Who is set to benefit from the COVID-19 outbreak?

For millions of individuals and businesses, the threat of COVID-19 is financial ruin, but there are parts of the technology industry that are benefiting from the considerable changes forced on society.

The FTSE 100 Index is likely to close below 5,000 today, a 27% decline in a month, while the Dow Jones is currently down (at the time of writing) 31% over the same period. Economies around the world are being hit disastrously hard, but some will see gains out of this pandemic at least temporarily, if not permanently.

Cloud Computing

The cloud computing segment has been on the rise for years, though as more employees find themselves restricted to their homes more workloads will have to be migrated to the cloud to ensure the business can function as usual.

For the cloud companies, the coronavirus outbreak is effectively forcing some organisations through a very rapid digital transformation project, to embrace the cloud and mobility trends. From an IaaS perspective it means more money, from SaaS it means more engagement and PaaS more opportunity.

Amazon Web Services, Microsoft Azure and Google Cloud are the obvious beneficiaries as market leaders, though for companies like Oracle, who might be working with more traditional industries that have resisted evolution to date, new conversations about enabling the workforce will have to occur.

Interestingly enough, once these businesses have begun their journey towards a cloud-based business model and environment, it is highly unlikely they will go into reverse. This could be a catalyst for accelerating the already fast-blossoming cloud segments.

Video conferencing and collaboration

Although there is no substitute for a face-to-face meeting to progress and complete complicated projects, alternatives have to be sought today. Many businesses are encouraging more meetings to be conducted via video links rather than email to not only ensure effective communication but ensure well-being of employees. Contact with colleagues via video link is not perfect by any stretch, but it might assist some who are feeling the loneliness of remote working.

Microsoft is an obvious beneficiary here, it announced last week the number of daily active users for its Teams collaboration suite increased by 12 million, though there are many others who are financially better off also.

Zoom Video Communications, a remote conferencing services company headquartered in San Jose, has seen share price increase 130% since the beginning of the year, while more marketers are turning to companies like ON24 to purchase webcasting and webinar services to ensure lead generation projects can continue.

As mentioned above, some companies are being forced into a digital transformation project meaning some of the remote working capabilities might be retained in the long-term, but virtual alternatives are never going to be a complete replacement for face-to-face meetings, where we can subconsciously pick up non-verbal communication cues so easily.

Electronic payments

The likes of Visa, Mastercard and AMEX are already benefitting from long-standing trends where physical cash is quickly becoming a thing of the past, though the COVID-19 outbreak could accelerate this.

In the short-term, some shops are now only accepting digital payments, though as the total number of transactions are decreasing, so will revenues. That said, in the long-term it could force customers into adopting digital payments.

Although cash is quickly becoming a thing of the past, some from the traditional generations still resist the use of digital currency. The chequebook took years to fall out of common usage as banks and shops were still compelled to accept such payment when offered. The same could be said of physical cash; as long as some still want to use it, it will persist. But in refusing to accept physical payments, shops are forcing some individuals to adopt digital payments.

This is not a likely to be a permanent change for all, but it might be for some, both in terms of consumers who adopt digital payments and the shops who will now only accept digital currency.

Ecommerce

The more people are at home bored, the more likely fingers are going to venture towards the eCommerce apps to spend the money which has been saved from not going to the pub. Your correspondent’s household has turned into a satellite Amazon storeroom thanks to certain individuals in the flat.

Streaming, gaming and video content platforms

This is perhaps the most obvious example of a beneficial segment.

In terms of video streaming, parents will need to occupy children, while adults will also need entertaining as pubs, clubs, theatres, parks, beaches, holidays and gigs all disappear. Netflix is already immensely popular, but with more people stuck at home in the evenings, it may well become more so, but this benefit is not limited to the content king. All streaming platforms could benefit, while Disney+ is launching at a good time to capture the attention of European consumers.

In terms of video platforms outside of streaming, YouTube is enjoying particular success. Not only are there those who are trying to entertain themselves, but there is also millions of hours of information (some much more accurate than others) on the pandemic itself.

From a gaming perspective, this is back to the boredom conundrum. With the usual entertainment venues shut down, consumers will need to be entertained. The likes of Microsoft Xbox, Google Stadia and PlayStation are likely securing additional subscriptions as well as in-game purchases.

Savvy corporates

For those corporations who in a more fortunate cash position than others, the shock to the financial markets could be viewed as an opportunity. Softbank is a perfect example.

Today (March 23), Softbank announced it was selling off certain unnamed assets to fund a second share buyback programme. Combined with the first announced on March 13, Softbank will be able to retire 45% of Softbank shares which are currently on the open market.

Generally speaking, the fewer shares which are on the open market, the less exposed a company is to external influences. All you have to do is look at the conflict between Elliott Management and Twitter/AT&T/Telecom Italia to see what influence an activist investor can have on a business where share price has taken a decline. Share buyback programmes could be viewed as a way to protect a corporate strategy from short-term influences and aggressive investors.

Online grocery delivery

With the rush on supermarkets persisting as the days turn into weeks, online grocery delivery companies are seeing a surge in popularity.

Online shopping delivery service Ocado suspended its website last week, telling customers demand exceeded its capacity to deliver. The firm has said it would fulfil its orders and will soon reopen, with rations placed on certain food items. Share price for Ocado has surged this month, though it did decline once it announced it would temporarily stop taking orders.

The telecommunications industry

The telecommunications industry is critical to today’s society functioning seamlessly, though it has traditionally been ignored. Consumers have simply expected the internet to work without appreciating the importance of the telecommunications industry. Telcos are viewed as boring companies, paid little attention in everyday life.

Thanks to the number of people attempting to entertain themselves, work from home or access educational resources the telco industry has been thrust into the limelight. Authorities are putting in measures to protect these valuable assets, not only to ensure consumers are able to continue their daily lives but so emergency services can continue to function, or research labs can collaborate to create a vaccine.

The telco industry underpins the success of almost every element and facet of society, and now the networks are under pressure, everyone realises it.

Amazon makes retail automation tech available to everyone else

Novel technology that promises to make cashiers a thing of the past is now being offered by Amazon to other retailers.

Amazon has become one of the biggest companies in the world by solving first world retail problems such as having to leave the house and delayed gratification. That same devotion to optimising the customer experience has more recently leaked from etail to bricks-and-mortar in the form of the Amazon Go cashierless store.

The technology that enables Amazon to have shops without any staff in them, without getting ripped off, is called Just Walk Out. Today Amazon announced it’s offering the tech to other retailers in a move that could not only add significantly more cash to Amazon’s already obscene pile, but significantly disrupt the retail experience once more.

On the surface Just Walk Out looks incredibly simple. The busy punter just swipes their credit card to enter the store, grabs a bunch of stuff and then clears off without having to queue for a checkout or even use one of those DIY checkouts. The smart shop just knows what they’ve walked out with and charges them accordingly, automatically emailing the receipt.

“We built Just Walk Out technology leveraging the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning,” explains the site. “Since launching Amazon Go years ago, many retailers have expressed an interest in offering similar checkout-free shopping experiences to their customers.”

It looks like cameras form the backbone of the technology, augmented by things like pressure sensors and RFID. The cameras are presumably handy for things like facial recognition as well as capturing footage of anyone who reckons they can beat the system and nick stuff. Taking items off the shelf and then putting them back isn’t a problem, apparently.

Amazon seems to have spent its entire history trying to destroy retail jobs and if Just Walk Out takes off this could be its biggest victory yet. The mobile commerce implications could be positive, however, as retailers will presumably insist customers use their app to access the store, all the better to track their buying habits and offer them things they didn’t even know they wanted.

Congress asks Amazon whether it is becoming a police snitch

The Subcommittee on Economic and Consumer Policy has written to Amazon asking the internet to explain partnerships between surveillance company Ring and local police departments.

Home security and surveillance products are becoming increasingly popular with the consumer, though it appears the subcommittee is asking Amazon to explain the fine print. As with most products and services launched by Silicon Valley residents, Ring seems to be accompanied with legal jargon few will understand and may well compromise privacy and data protection principles.

“The Subcommittee on Economic and Consumer Policy is writing to request documents and information about Ring’s partnerships with city governments and local police departments, along with the company’s policies governing the data it collects,” the letter states.

“The Subcommittee is examining traditional constitutional protections against surveilling Americans and the balancing of civil liberties and security interests.”

The question which the politicians seem to be asking is how compliant Ring will in handing over information to law enforcement agencies or local government authorities, as well as the fundamentals of the partnerships themselves. Once again it appears the technology industry is revelling in the grey lands of nuance and half-statements.

Ring currently has partnerships with more than 900 law enforcement and local government agencies, it is critically important that everything is above board. This isn’t just a quirky product adopted by a few individuals anymore, this is potentially a scaled-surveillance programme. The opportunity for abuse is present once again, offering validity for Congress to wade into the situation and start splashing.

Optimists might suggest Ring is being a good corporate citizen, aiding police and security forces where possible. Cynics, on the other hand, would question whether Amazon is attempting to create a private, for-profit surveillance network.

One area which the Subcommittee would like some clarification on is to do with how compliant Ring would be when offering data to government agencies. Ring has said it would not turn over data unless it is “required to do so to comply with a legally valid and binding order”, though the wording of the terms of service seem to undermine this firm stance.

Ring may access, use, preserve and/or disclose your Content to law enforcement authorities, government officials and/or third parties, if legally required to do so or if we have a good faith belief that such access, use, preservation or disclosure is reasonably necessary to: (a) comply with applicable law, regulation, legal process or reasonable governmental request.

The final point of this clause, reasonable government request, is what should be considered worrying. This is unnecessarily vague and flexible language which can be used for a wide range of justifications or explanations for wrongdoing.

More often than not, politicians on such subcommittees are usually chasing a headline, but this seems to be a case where proper investigation is warranted. Law enforcement agencies and the internet giants have shown themselves on numerous occasions not to be trustworthy with minimal oversight. And when you are talking about a topic as sensitive as data privacy, no blind trust should be afforded at all.

FTC starts turning the screw on Big Tech

The Federal Trade Commission (FTC) has issued Special Orders to five of the technology industry’s biggest hitters as it takes a more forensic look at acquisition regulation.

Under the Hart-Scott-Rodino Act, certain acquisitions or mergers are required to be greenlit by the regulatory authorities in the US before completion. This is supposed to be a measure to ensure an appropriate marketplace is maintained, though there are certain exceptions to the rule. It appears the FTC is making moves to combat the free-wheeling acquisition activities of Big Tech.

Under the Special Orders, Google, Amazon, Apple, Facebook and Microsoft now have to disclose all acquisitions which took place over the last decade. It appears the FTC believes the current rules on acquisition need to be reconsidered.

“Digital technology companies are a big part of the economy and our daily lives,” said FTC Chairman Joe Simons. “This initiative will enable the Commission to take a closer look at acquisitions in this important sector, and also to evaluate whether the federal agencies are getting adequate notice of transactions that might harm competition. This will help us continue to keep tech markets open and competitive, for the benefit of consumers.”

While authorities have already questioned whether some acquisitions are in the best interest of a sustainable industry, in fairness, Big Tech has done nothing wrong. Where relevant, the authorities have been notified regarding acquisitions, and they have generally been approved. If the FTC and its cousins in other regulatory authorities believe the current status quo is unappealing, they only have themselves to blame.

In general, an acquisition will always have to be reported if the following three criteria are met:

  1. The transaction would have an impact on US commerce
  2. One of the parties has annual sales or total assets of $151.7 million, and the other party has sales or assets of $15.2 million or more
  3. The value of the securities or assets of the other party held by the acquirer after the transaction is $68.2 million or more

All three of these criteria have to be met before the potential acquisition has to be approved by the regulators.

Interestingly enough, the Android acquisition by Google is rumoured to be for roughly $50 million, therefore the third criteria was not met, and the team did not need to gain regulatory approval for the deal. This is perhaps what the FTC is attempting to avoid in the future, as while we suspect there was no-one in the office at the time with enough foresight to understand the implications, the regulator might suggest it would not have approved the deal in hindsight.

One of the issues being faced currently, and this is true around the world not just in the US, is that authorities feel they have lost control of the technology industry. Companies like Google and Facebook arguably wield more influence than politicians and regulatory authorities, a position few will be comfortable with outside of Silicon Valley.

Aside from this investigation, the FTC is also exploring Amazon in an antitrust probe, while Google and Facebook are facing their own scrutiny on the grounds of competition. There have also been calls to break-up the power of the technology companies, while European nations are looking into ways to force these companies to pay fair and reasonable tax. Across the world, authorities are looking for ways to hold Big Tech more accountable and to dilute influence.

Interestingly enough, we don’t actually know what the outcome of the latest FTC foray will be. It will of course have one eye on updating acquisition rules, though as Section 6(b) of the FTC Act allows the regulator to conduct investigations that do not have a specific law enforcement purpose; it’s a blank cheque and the potential outcome could head down numerous routes.

AWS sues US Government for Trump hatred

Amazon has launched a legal challenge against the Department of Defense’s preference to Microsoft Azure, suggesting the decision is linked back to President Trump’s hostility towards CEO Jeff Bezos.

The animosity between the pair has been anything but private, and now it appears the public display of difference is causing complications for the White House. Amazon is suggesting the Department of Defense’s decision to award the $10 billion Joint Enterprise Defense Infrastructure deal, known by the acronym JEDI, to Microsoft was compromised by the actions of Trump.

“This case demands an expanded AR [administrative record] so that the Court may fully assess AWS’s well-grounded claims of bias and bad faith,” the filing states.

“President Donald J. Trump has repeatedly demonstrated his willingness to use his position as President and Commander in Chief to disrupt the orderly administration of government functions-including federal procurements-to advance personal motives. There is no question he did so here.”

Amazon is requesting greater access to internal documentation to further build a case against the US under the assumption the President’s hatred towards Amazon CEO Jeff Bezos saw pressure placed on the Department of Defense to award the contract elsewhere. Aside from Amazon and Microsoft, IBM and Oracle were also in the running for the cloud infrastructure and migration services contract.

The contract itself was awarded to Microsoft back in October, though it was not without controversy at the time. Several Senators wrote to President Trump asking the decision to be re-evaluated in favour of splitting the contract to more than one supplier. These pleas were ignored, and AWS even released a statement questioning the logic of the decision on the grounds it believed it was the market leader.

To make matters a bit messier, a Seattle Judge ruled Government employees were unfairly favouring AWS in July. This ruling followed a lawsuit filed by Oracle which claimed there were conflicts of interest with past employees which led to AWS gaining an upper hand due to the way the contract was drawn up.

This has been a scruffy process from start to finish, and thanks to the President’s apparent personal feelings towards Amazon CEO Jeff Bezos, it might be extended further.

The conflict between the two has been on-going for years, and AWS is now alleging the President pressured Government officials to ensure the Amazon company did not profit from Government contracts. The President reported ordered former Defense Secretary James Mattis to ‘screw Amazon’ out of the contract. Following these comments, procurement reports allegedly leaned towards Microsoft.

Amazon now claims the Department of Defense committed ‘numerous and compounding prejudicial errors’ which led to the team disfavouring AWS. These errors included relying on an outdated, superseded version of AWS’ proposal, misstating facts from the proposal, downplaying failures in the Microsoft proposal and fabricating areas of superiority in the final stages of evaluation to favour Microsoft.

This is only one incident, though Trump has a history of targeting Amazon and its CEO Jeff Bezos.

Prior to entering the White House, Trump had warned that it would be bad news for Amazon if he assumed power, while the filing aims to prove many of his actions have been used to punish enemies or advance his own personal agenda. The decision to award a $400 million contract to build the controversial wall to Fischer Industries and intervention to prevent the relocation of the FBI headquarters away from the nearby Trump International Hotel in downtown Washington are two more examples offered by AWS to demonstrate inappropriate influence and pressure from the Oval Office.

Another example is the removal of press credentials for CNN’s Jim Acosta just hours after the President branded the reporter a ‘rude, terrible person’. Although these examples are not directly relevant, if AWS is able to prove the President unduly influences Government decisions based on grudges or personal grudges it might be able to gain some traction.

The end game has not been explicitly mentioned in the filing, just that AWS lawyers want to begin a ‘discovery’ process which would be used to fuel future legal action. AWS clearly feels it has something to gain here, either by halting the President’s alleged bias against the firm or forcing the Department of Defense to restart the

MWC cancellations snowball as show implements strict coronavirus precautions

At least four more major participants pulled out of MWC 2020 over the weekend, while restrictions on visitors from China have been tightened.

Amazon, Nvidia, Sony and Viavi have now all confirmed they’ve decided the risk of coronavirus infection is too great for them to allow their formal presence to go ahead. Here are their statements.

Amazon: “Due to the outbreak and continued concerns about novel coronavirus, Amazon will withdraw from exhibiting and participating in Mobile World Congress 2020, scheduled for Feb. 24-27 in Barcelona, Spain.”

Nvidia: “We’ve informed GSMA, the organizers of MWC Barcelona, that we won’t be sending our employees to this year’s event. Given public health risks around the coronavirus, ensuring the safety of our colleagues, partners and customers is our highest concern.

“MWC Barcelona is one of the world’s most important technology conferences. We’ve been looking forward to sharing our work in AI, 5G and vRAN with the industry. We regret not attending, but believe this is the right decision. We’re grateful for GSMA’s leadership and continued efforts to ensure the safety of all attendees.”

Sony: “Sony has been closely monitoring the evolving situation following the novel coronavirus outbreak, which was declared a global emergency by the World Health Organization on January 30th, 2020. As we place the utmost importance on the safety and wellbeing of our customers, partners, media and employees, we have taken the difficult decision to withdraw from exhibiting and participating at MWC 2020 in Barcelona, Spain.

“The Sony press conference will now instead take place at the scheduled time of 8:30am (CET) on February 24, 2020 as a video via our official Xperia YouTube channel to share our exciting product news. https://www.youtube.com/user/sonyxperia. Sony would like to thank everyone for their understanding and ongoing support during these challenging times.”

Viavi: “After reviewing all available data, VIAVI has chosen to cancel participation in this year’s Mobile World Congress in Barcelona out of an abundance of caution and concern for our employees, customers and partners.”

There are, of course, rumours of other cancellations, but none confirmed at time of writing. Cnet reports that Samsung is still exhibiting, but is acting to protect just its senior execs, which isn’t a great look if it’s true. We asked Samsung for comment and were told that, while there is no official statement, the company is still attending.

Meanwhile the organisers of MWC 2020, the GSMA, issued another update over the weekend, affirming once more that the event is still going ahead, but announcing a raft of new precautions and restrictions designed to mitigate the risk of coronavirus infection to exhibitors and attendees.

  • All travellers from the Hubei province will not be permitted access to the event (MWC Barcelona, Four Years From Now (4YFN), xside and YoMo)
  • All travellers who have been in China will need to demonstrate proof they have been outside of China 14 days prior to the event (passport stamp, health certificate)
  • Temperature screening will be implemented
  • Attendees will need to self-certify they have not been in contact with anyone infected.

While it’s totally understandable that the GSMA will do everything in its power to make the show as safe as possible, it’s hard to se how some of those measures will be enforceable. What does ‘self-certify’ even mean? Also this advice was issued yesterday, 15 days before the official start of the event. So, essentially, if you haven’t left China for the event already, don’t bother.

The whole event feels like it’s balancing on a knife-edge, with just one more negative development potentially enough to tip the balance towards outright cancellation. We understand many companies are following Ericsson’s lead and conducting formal risk assessments, the results of which are probably already being analysed. The smart money was on Nokia pulling out after the Ericsson decision, but we’ve heard nothing from them yet. The biggest exhibitor, however, is Chinese firm Huawei, and the fate of MWC could lie in their hands.

Amazon and Microsoft are proving to be a different class in the cloud game

Amazon and Microsoft have unveiled bumper financial results and now it is over to Google to prove it can keep pace with the two clear leaders in the cloud segment.

For years, it was Amazon’s cloud business unit, AWS, which was incomparable to the rest of the cloud segment. No-one could get anywhere near this trailblazer, though Microsoft has closed that gap recently. The question is whether anyone else has? The likes of Google, IBM and Oracle claim to be in the same league, but there is little evidence to support this, but Google has a chance to set the record straight next week.

Amazon and Microsoft have now revealed their numbers for the final three-month period of 2019. The story is not quite complete without Google’s numbers, realistically the only competitor who has a credible claim to be in the same league, but the numbers are eye-watering.

At group level, Amazon increased revenues by 21% during the last quarter, with the cloud business bringing in $9.9 billion, an increase of 23% year-on-year. While net income only increased 19% to $2.6 billion, this was actually 79% of the total net income across the group. The cloud business unit at AWS is a profit machine.

Over at Microsoft, group revenues increased by 14% to $36.9 billion, while net income was up 38% to $11.6 billion. Revenue in the ‘Intelligent Cloud’ unit increased 27% to $11.9 billion with Azure’s revenue up 62% for the quarter. Cloud products and services of course factor into the other Microsoft business units, but the ‘Intelligent Cloud’ group is showing the most aggressive growth.

Business unit Total revenue Growth
Intelligent Cloud $11.9 billion 27%
Productivity and Business Processes $11.8 billion 17%
More Personal Computing $13.2 billion 2%

Although revenues are only one part of the picture, market share estimates also tell another story.

Looking at the most recent estimates from Synergy Research Group, Amazon is leading the cloud segment with 39%, Microsoft sits in second with 19%, Google is on 9% and 5% for Alibaba. Salesforce now has 4% and IBM is on 3%, while no-one else has more than a 2% share. These figures are for the Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) segments.

As mentioned before, the landscape is not complete until Google releases its numbers next week, though IBM and Salesforce have released theirs. At IBM, total cloud revenues stood at $6.8 billion, up 21% year-on-year, while Salesforce reported group revenues of $4.5 billion for the last quarter, an increase of 33%. These numbers are attractive, investors might well be pleased, but Microsoft and Amazon look like they are sitting alone in the top tier of the cloud industry.

Another factor to consider are the deal wins.

While Amazon has been hoovering up deals with SMEs and the emerging digital businesses, Microsoft has extensive existing relationships with almost every major corporation in the Western world. The firm claims to currently be working with 95 of the Fortune 100 companies on cloud infrastructure. These companies like the look of Microsoft, thanks to a stronger focus on hybrid-cloud, whereas Amazon has a better reputation for the speed and scale of cloud-only strategies.

During the last period, Microsoft secured the US Department of Defense $10 billion JEDI cloud contract, which will cover 1,700 data centres and the transition of millions of devices from on-premise servers to the cloud. AWS lost out on this deal, but it has got plenty of significant customer wins to boast of; Western Union, media firm Fox, the NFL, pharmaceutical giant Novartis and Best Western Hotels & Resorts.

Interestingly enough, the rapid expansion of these internet giants might well start to encroach potential revenues which have been earmarked for the telcos.

The last few months have not only seen CAPEX investment from the likes of AWS and Microsoft, but also picking up industry executives. An excellent example of this is Alex Clauberg, a former Deutsche Telekom executive.

As the connected world starts to spread to more corners of society and the ‘edge’ develops, there are plenty of opportunities for telcos to make more money from what is quickly becoming a commoditised service. However, there is no guarantee the newly created ‘service’ revenues will be reserved for the telcos themselves. Clauberg’s move is evidence the internet players are attempting to muscle in on telco revenues.

Clauberg is a well-known name in the SDN and NFV sector and is the current Chairman of the Telecom Infra Project (TIP). He was previously VP and CTO at T-Systems International, the global services and consulting arm of DT, but now works as Solutions Architects Leader, at AWS. There is not a huge amount of information as to what this new job actually is, but it is demonstrative of the ambitions of the likes of AWS in the telco world.

These are companies which are growing rapidly in their traditional playing grounds and pushing aggressively to steal profits in places they should be considered secondary. Google still has an opportunity to place itself at the top table of the profitable cloud segment, but it does look like AWS and Microsoft are in a league of their own.

SpaceX fights back over Amazon’s satellite shortcut

Amazon is one of the many companies interested in deploying low-orbit satellites for the internet, but SpaceX is lobbying the FCC to prevent the internet giant dodging bureaucratic complications.

When launching a constellation of satellites for the delivery of mobile broadband, there are many boxes to tick. Amazon CEO Jeff Bezos certainly has the cash, the interest, the ambition and the manpower to make his satellite venture a success, but one thing he doesn’t currently have is the regulatory approval to access spectrum. This is obviously a massive stumbling block.

Over the last few months, Amazon has been submitting various different filings with the ITU and the FCC to overcome the regulatory hurdles, but there is one monstrous complication; the spectrum has already been allocated.

This is where it starts to get very interesting. Amazon is asking for a waiver so it can pursue the delivery of mobile broadband via low-orbit satellite, but its competitors are lobbying against the waiver.

SpaceX has submitted its own opinion to the FCC where it believes the requests should be denied. Nine companies participated in the initial Ka-band licensing round, a very complex bureaucratic procedure to allocate spectrum to the likes of Telesat Canada, Theia Holdings, and Iridium Communications.

Amazon can participate in the secondary round of Ka-band licensing, though it risks being designated as secondary-operator. In this situation, it would have to cease operations should the assets interfere with the operations of one of the previously established operators. This is not a position the ambitious Bezos will want to be in.

The question which remains is whether the FCC will permit Bezos to take the shortcut, muscling in on spectrum licences which were allocated years ago, or will force the firm to take the official route. The likes of SpaceX will certainly want to make life difficult for Amazon, why would it want another competitor in the skies after all.

Should the FCC side with SpaceX’s lobbyists there is a risk Bezos might scale back his investment in the stars. But then again, does the FCC want to sour relationships with everyone else as an alternative?

Big Tech sign-up to make smart home standards

Apple, Amazon and Google are joining forces with the Zigbee Alliance to form the Connected Home over IP project to create universal standards for the smart home ecosystem.

The aim of the project is simple; get ahead of the game and reduce the potential for ecosystem fragmentation in the smart home. With Apple, Amazon and Google on board, the working group has access to the worlds’ most popular virtual assistants and can drive towards creating a framework which encourages interoperability and compatibility.

“Our goal is to bring together market-tested technologies to develop a new, open smart home connectivity standard based on Internet Protocol (IP),” Google’s Nik Sathe and Grant Erikson wrote on the company’s blog.

“Google’s use of IP in home products dates back to the launch of Nest Learning Thermostat in 2011. IP also enables end-to-end, private and secure communication among smart devices, mobile apps, and cloud services.”

While it might seem slightly unusual that the internet giants are attempting to collaborate without being forced to, the bigger picture makes it a bit more logical.

The likes of Google, Apple and Amazon are looking to make more money from the software and services elements of the smart home ecosystem. This is an admirable quest, though for money to be made there needs to be mass adoption of smart home products.

As it stands, smart home devices manufacturers are facing a conundrum. Either, spend a lot of money to make sure devices are compatible with all the different smart home ecosystems which are developing, or pick a winner and risk losing out on customers who will exist elsewhere. By creating universal standards for the smart home ecosystem, the manufacturers will theoretically be more encouraging to engage in this emerging segment.

What is always worth remembering is that while the likes of Google and Amazon currently sell smart home devices, there will be a lot more money for these companies on the software side when smart home products are adopted on scale. This is their bread and butter after all, with a plethora of existing relationships already in place. Looking at Apple, this is a company which manufactures premium devices, but has some very aggressive ambitions in the software and services world. This is where CEO Tim Cook envisions growth for the company in the future.

Ultimately this is a good sign for the industry. Collaboration is a word which is thrown around so much nowadays it is almost meaningless, but when it results in universally accepted standards to drive interoperability and compatibility, there is something genuinely exciting to look forward to.

Report: FTC expands scope of Amazon antitrust probe to include AWS

Amazon has been offered an early Christmas present from the Federal Trade Commission (FTC) by extending an existing antitrust probe to include its burgeoning cloud business.

According to Bloomberg, FTC investigators have begun questioning customers about AWS, allegedly focusing on whether the dominance of AWS is impacting competition in the cloud segments. While this probe does not necessarily mean any action against the company, Amazon executives will not be thrilled at the attention.

As it stands, AWS is the clear market leader in the cloud computing market, largely thanks to being first to market with services but also due to the significant infrastructure footprint it has developed over recent decades. Although estimates vary, AWS has been deemed the market leader, with just below 50% market share, with Google and Microsoft the other players with significant market share.

It is believed the probe is looking at how potential competitors interact with AWS customers and the company itself. One area the probe will address is whether AWS is effectively punishing software companies who work with its cloud rivals and incentivising others to work with AWS exclusively.

This investigation is part of a larger, sweeping trend with greater scrutiny being placed on Big Tech. Amazon’s retail business is at the heart of an existing FTC antitrust probe, while Google, Apple and Facebook are also facing their own competition investigations from a variety of authorities. Some might presume these enquiries are being made as the first steps towards diluting the influence of Big Tech, and in some cases, breaking-up the internet giants.

Although significantly younger than the retail business units of Amazon, AWS has been collecting the lion’s share of profits for the firm in recent years. Amazon was famously known as the technology giant which never generated profits, though that changed in recent years, partly thanks to the rise of AWS.

Looking at the most recent quarterly earnings report, total revenues for Amazon increased to $70 billion for the three months ending September 30, with operating income at $3.1 billion. AWS accounted for $2.2 billion of this operating income on net sales of $8.9 billion for the quarter. Across the year to date, AWS accounts for 61% of the total operating income of Amazon.

Antitrust probes are of course nothing new to Amazon, though a few executives and investors might get a bit twitchy that it is the profit machine which is facing enquiries now.