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The Integration of Digital Business Models: The Amazon Case Study

• First Online: 21 May 2022

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• Carlo Bagnoli 10 ,
• Andrea Albarelli 11 ,
• Stefano Biazzo   ORCID: orcid.org/0000-0003-3373-2964 12 ,
• Gianluca Biotto 13 ,
• Giuseppe Roberto Marseglia 14 ,
• Maurizio Massaro   ORCID: orcid.org/0000-0001-6461-2709 15 ,
• Matilde Messina 13 ,
• Antonella Muraro 16 &
• Luca Troiano 17  

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The final chapter involves the description of the Amazon case study. The intention is to reconnect the various categorizations illustrated in the previous chapter to a real-world example for the purpose of presenting a successful case of business disruption as Amazon is known to have disrupted retail. The analysis aims at highlighting the fact that Amazon combines all the business model frameworks described in the preceding chapters as well as investigating their coexistence within a single organization.

The present chapter also explains a few methodologies which have been developed in order to guide companies through the process of disrupting their existing business models and facilitating the shift towards an innovative framework. Digital technologies can ease the above-mentioned transition as firms are required to select the technological advancements enabling them to accomplish particular organizational goals.

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Bishop, T. (2013). Bezos: 3D printing “exciting” but not disruptive for Amazon in short term . GeekWire.

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Bagnoli, C., et al. (2018). Business Model 4.0. I modelli di business vincenti per le imprese italiane nella quarta rivoluzione industriale . Edizioni Ca’ Foscari.

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Department of Management, Ca’ Foscari University of Venice, Venice, Italy

Carlo Bagnoli

Department of Environmental Sciences, Informatics and Statistics, Ca’ Foscari University of Venice, Mestre, Venice, Italy

Andrea Albarelli

Department of Management and Engineering, University of Padua, Padua, Italy

Stefano Biazzo

Strategy Innovation S.r.l., Venice, Italy

Gianluca Biotto & Matilde Messina

University of Pavia, Pavia, Italy

Giuseppe Roberto Marseglia

Maurizio Massaro

Avanade Italy S.r.l., Milan, Italy

Antonella Muraro

Zeb Consulting S.r.l., Milan, Italy

Luca Troiano

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Bagnoli, C. et al. (2022). The Integration of Digital Business Models: The Amazon Case Study. In: Digital Business Models for Industry 4.0. Future of Business and Finance. Springer, Cham. https://doi.org/10.1007/978-3-030-97284-4_4

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Successes and Failures of Amazon's Growth Strategies: Causes and Consequences

By: W. Chan Kim, Renee Mauborgne, Oh Young Koo

On 30 May 2017, Amazon shares traded at a record high - above $1,000 - surpassing the share price of Google parent Alphabet. Started as an online bookstore 22 years earlier, Amazon has achieved…

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On 30 May 2017, Amazon shares traded at a record high - above $1,000 - surpassing the share price of Google parent Alphabet. Started as an online bookstore 22 years earlier, Amazon has achieved uninterrupted growth by becoming the largest internet bookstore, the largest online marketplace, a media company, and the most successful IT service provider. Amazon recently expanded into the bricks-and-mortar retail business, launching Amazon Books across the US and beta-testing Amazon Go in Seattle. As of May 2017, Amazon was ranked the world's most innovative company and the fourth largest company by market capitalization. The case explores Amazon's path to growth and its successes and failures along the way. Successful strategic moves include Amazon Marketplace, Prime, Amazon Web Services, and Kindle. Failures included Auctions, A9 Search Engine, Endless, and the Fire Phone. Identifying commonalities and differences among them, the case shows the causes and consequences of Amazon's at-once stellar performance and severe setbacks. It applies Blue Ocean Strategy concepts to analyze its market-creating logic for future growth. The case comes with teaching note, a one-page summary and lectures slides. Teaching materials can be downloaded from https://www.blueoceanstrategy.com/teaching-materials/amazon/ The case is also available in Chinese and Korean.

Learning Objectives

The case aims to understand the root of a company's high performance and growth. A company, in this case study Amazon, makes a series of strategic moves in pursuit of growth. Some of them largely contributed to Amazon's growth and market dominance; some of them made Amazon to experience a serious setback. The case analyzes these strategic moves and finds out key commonalities and differences between the two, aiming to make the following learning points:

1) There is no perpetually excellent company - it can be brilliant at one moment and wrongheaded at another.

2) Amazon created a series of new markets by multi-faceted business offerings from online retailing to media and IT services. Those strategic moves opened and captured new market space instead of exploiting existing markets. By focusing on delivering meaningful value to buyers, Amazon made a significant leap in demand and achieved high growth. Furthermore, it eventually lowered the cost structure as a mass of buyers flocked and were locked-in by Amazon's unprecedented utility.

3) Amazon jumped into many attractive industries and leveraged its entrenched resources and capabilities to bring intense competition against incumbents. These strategic moves, anchored in red ocean traps, focused on offering higher value or lower cost than the rivals, but they were not necessarily bought in by customers.

4) Key difference between Amazon's success and failure can be found in the presence of value innovation. Amazon achieved high growth regardless of industry condition when they pioneered a new strategy that opened up a new value-cost frontier through a step change in the kind and degree of value offered, hence creating a new market and making competition irrelevant. By contrast, Amazon failed when it focused on delivering novelty technology without buyer value or simply exercised cost leadership in order to beat high-performing incumbents.

Sep 25, 2017 (Revised: Feb 20, 2022)

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E-commerce industry

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Optimize database performance and reduce costs up to 50% with Amazon FSx for NetApp ONTAP

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May 22, 2024

Topics: amazon fsx for netapp ontap aws database customer case study advanced 10 minute read.

Databases are key components of enterprise-level information technology (IT) infrastructures. The AWS Cloud provides a wide range of storage resources that can make up the building blocks of these deployments.

But which is the right option to meet your database’s requirements? At the enterprise-level database, storage layers need to account for many challenges. They must provide consistent high performance in changing environments, meet stringent data protection and business continuity demands, and promote quick time to market (TTM)—all while optimizing costs.

In this post, we discuss these challenges in depth and show how Amazon FSx for NetApp ONTAP can help enterprises like yours overcome them.

Use the following links to jump to the sections on:

The challenge of the self-managed database puzzle

Optimize your database with fsx for ontap.

• How a healthcare IT company powers its database with FSx for ONTAP

Get more from your database with FSx for ONTAP

In many ways, running your own database can be like trying to solve a Rubik's Cube. Some people look at the mixed-up colors and decide not to even try. Others love figuring out these things. Just like the Cube, although self-managed databases can be challenging, they’re not impossible.

Here are the puzzle pieces that you should consider.

You need to maintain consistent, high-level performance.

Databases are key to enterprise applications. However, achieving high-performance levels can be difficult because:

• Latency drags down performance , making it important to fine-tune for quick data retrieval, efficient query handling, and caching mechanisms to speed up access.
• Changing environments can affect performance , so you need to architect an agile system that can quickly and automatically adapt to changing workload demands.
• Workload demands may change , but not all systems allow you to adjust your latency, input/output operations per second (IOPS), and throughput performance parameters in those scenarios.
• Maintenance shouldn’t be disruptive , whether it's during scheduled maintenance hours, version upgrades, or when running resource-guzzling services such as snapshots and data replication.

Your data must be available at all times.

When you are responsible for maintaining resources and the network stability of your database setup, there’s a lot to consider:

• High availability is crucial for your production applications, so your database must rely on a storage layer that can withstand even an Availability Zone (AZ) failure.
• Transitioning to a secondary system automatically during an outage requires setting up automatic failover and failback processes.
• Checking the viability of committed recovery point objective (RPO) and recovery time objective (RTO) targets helps you prevent data loss and keep downtime minimal if disruptions occur.

You must be able to recover if a disaster strikes

Quickly recovering your storage layer plays a major role in your business reliability. However, preparing beforehand presents some hurdles:

• Replicating data across regions isn’t supported by default in most storage services and configuring it on your own is a complex undertaking.
• Meeting a database’s stringent RTO and RPO targets can be difficult , especially when optimizing your backup and disaster recovery (DR) processes.
• Confirming accurate recovery and application context preservation requires DR and backup copies that are crash-consistent and application-aware.
• An inefficient replication engine can cause data to be lost and can complicate recovery.

Your DevTest processes and TTM depend on your database

The development and testing (DevTest) cycle requires your database to be updated and available for the teams involved. However, there are some challenges:

• Copying and refreshing large database environments for testing, preproduction, quality assurance (QA), and schema validation alongside your production database can be a lengthy process, causing major bottlenecks. That slows down the DevTest cycle, delaying your TTM.
• Development teams need to access the database without affecting production or accessing your live environment. That access must be in a way that doesn’t slow down the DevTest cycle or inflate costs.
• The copying process might lead to resource constraints until the process is complete. For instance, provisioned Amazon Elastic Compute Cloud (EC2) instances that are waiting for test copies of the database to spin up continue to rack up charges without being used.

You have to keep costs under control

Storage growth and incorrect sizing leads to higher-than-expected expenses. Consider the factors that can increase your database storage costs:

• Complying with stringent data protection requirements and regulations , such as for DR copies, backup, and long-term archived data can increase your storage needs and escalate costs.
• Sizing can change over time , leaving you with over-provisioned resources and excess capacity that still incur charges. On the other hand, underprovisioning may slow down your system’s performance.
• Reducing your data footprint and optimizing your operations while maintaining high performance and full capabilities are challenging recurring tasks.

Now, let’s consider what NetApp and AWS have done to help you put all the pieces in the right place.

FSx for ONTAP is a fully managed AWS service that meets the storage-related performance, resilience, and accessibility needs of your business-critical workloads through a comprehensive and flexible set of NetApp® ONTAP® storage management features.

FSx for ONTAP delivers crucial benefits for self-managed database deployment that can help you mitigate the complexities so you can build a database that performs better, with a higher level of protection, at a reduced cost.

Best-in-class performance

FSx for ONTAP is engineered to offer fast, dependable, and consistent high performance to support your enterprise-grade database workloads: 

• FSx for ONTAP provides high-performance storage built to deliver up to 4GBps of throughput, 160,000 IOPS per file system, and submillisecond latencies.
• The FSx for ONTAP scale-out service can support up to 72GBps of read throughput, 12GBps of write throughput, and 2.4 million IOPS with less than 1ms latency and a 1PB-scale namespace.
• Fast in-memory and intelligent nonvolatile memory express (NVMe) caching further enhances performance for your most frequently accessed data.
• You can adjust throughput levels to match your workload needs and budget, scaling them up or down whenever necessary.

Continuous high availability

The FSx for ONTAP high-availability (HA) feature uses a dual-node deployment, in which data is synchronously mirrored across a single or multiple AZs. If a failure occurs, an automatic failover switches to the redundant node. After the failed node recovers, an automatic failback to dual-node operation takes place.

This approach keeps your operations available even if an entire AZ fails, enabling you to:

• Maintain continuous data availability by default through either Single-AZ or Multi-AZ deployment options.
• Achieve 99.99% availability, which is crucial for your critical database applications.
• Align with an RPO of zero and an RTO of less than 60 seconds.

Thin-clone copies to shorten the development cycle and speed up TTM

With the help of NetApp FlexClone® technology, FSx for ONTAP can create instant, writable thin clones from point-in-time images of data. Thin-clone database copies significantly shorten the DevTest cycle when they’re used to create DevTest environments. Your teams can work with real-world data scenarios without affecting your production environments. Thin-clone copies provide numerous important benefits that support faster DevTest cycles and TTM:

• Because it needs almost zero capacity, the creation of thin-clone copies is instant. This capability reduces the time needed to provision database storage for DevTest processes, and only changes are stored to the copy.
• Clones provide access to the database for different teams without affecting your production data.
• Copies can be used in parallel across DevTest processes and teams.

Up to 50% lower storage costs for databases

FSx for ONTAP brings several key improvements to reduce database storage capacity and lower your costs:

• FSx for ONTAP gives your organization the flexibility to use less compute power to achieve the same performance levels. You can maintain high database performance while using less-expensive Amazon EC2 instances.
• Moving DR and backup data management to the storage layer saves on database licenses.
• Thin cloning keeps your costs low because lightweight copies consume nearly zero storage space, instead of the duplicate storage costs that full copies incur.
• With thin cloning, new database environments are created instantly, speeding up your DevTest cycles, team productivity, and TTM.
• Storage efficiency features, including thin provisioning, deduplication, compression, and compaction, significantly reduce the amount of physical storage consumed, lowering your costs. This data footprint reduction applies to the production data, the DR and backup data, as well as to the data transfer costs.

Faster, more efficient recovery

By shifting the responsibility of data protection to the storage system, FSx for ONTAP offers powerful NetApp capabilities to protect your data:

• NetApp Snapshot™ technology creates point-in-time snapshot copies of volumes to protect against accidental deletions or other local failures. These copies are not only lightweight, but also crash-consistent and application-aware, enabling consistent and point-in-time restoration of your database as needed.
• By using NetApp SnapMirror® replication technology, backup and DR volumes are incremental, space efficient, and consistent, preventing corruption and incomplete-transaction issues.
• Backups can be restored in minutes instead of hours, at any time.
• Storage-level backups reduce your inherent reliance on extensive database licenses, leading to significant cost savings.
• Backups are immutable thanks to write once, read many (WORM) storage supported by NetApp SnapLock® technology for enhanced data security.
• Cross-Region DR provides uninterrupted business continuity, even if an entire AWS Region experiences a disaster. The failover between regions supports an RPO as low as 5 minutes and a minimal RTO.

Following is an architecture diagram of FSx for ONTAP in a Multi-AZ configuration that uses cross-region DR with SnapMirror:

Source: AWS

How a healthcare IT company powers its database with FSx for ONTAP 

One FSx for ONTAP user is a leading U.S.-based private software company that develops electronic health record (EHR) applications tailored for medical specialties such as dermatology, ophthalmology, and gastroenterology.

The company was facing hurdles with its cloud-based electronic medical record (EMR) software-as-a-service (SaaS) offering, which provides physicians with crucial patient data and imaging. The costs and complexity of running the hundreds of SQL Server database instances and volumes underlying the SaaS offering were starting to add up. The company needed another storage solution.

To overcome this challenge, the company chose FSx for ONTAP and shifted its 500TB database workloads to the service. With this switch, the company gained several significant benefits, including:

• High performance . FSx for ONTAP provides high-performance storage for document processing, which helps make patient data readily available to doctors through the application.
• Cost reduction . Automatically tiering infrequently used documents to low-cost capacity storage has led to a 30% to 40% cost reduction. This significant savings is expected to grow over time, given the long retention periods needed for patient data.
• Cloning capabilities . By using FlexClone, the company can swiftly clone databases for testing environments without consuming storage space. This capability not only has substantially shortened the release cycle and TTM, but it also has drastically reduced development costs.
• Simplicity . As an AWS managed service, FSx for ONTAP has simplified storage management, enhanced staff productivity, and allowed teams to focus on other core infrastructure aspects.

Configuring your database is like solving a puzzle. You must configure its performance, availability, backups, DR, and DevTest operations, and it all needs to work well without driving up your costs. How you handle data can play a big part in reducing this complexity. That’s where FSx for ONTAP comes in.

With FSx for ONTAP, self-managed databases on AWS can run faster, more securely, and with costs as much as 50% lower than with other database storage solutions and services.

Learn more about FSx for ONTAP success stories in these customer case studies .

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