Bloomberg News

Amazon Expanding Cloud Business Through Pop-Up Stores

August 22, 2014

Amazon Web Services Loft

The Amazon Web Services Loft will hold evening events and serve as a social gathering place for AWS developers. Source: Amazon Web Services via Bloomberg

Amazon.com Inc. (AMZN:US) is increasingly trying to spread its cloud-computing business by using brick-and-mortar stores.

The Seattle-based online retailer said today that it will re-open a “pop-up loft” in downtown San Francisco sometime this fall to give developers a place to learn about its Web Services business, where Amazon rents data storage and computing power to other companies. Amazon employees will staff the location so developers can ask questions and attend free technical classes -- as well as chow on pizza and drink beer if they get hungry or thirsty.

The store, which ran for a limited four-week period in San Francisco earlier this year, is set to operate at least a year this time, Ariel Kelman, vice president of worldwide marketing for Amazon Web Services, said in an interview. The loft will be a model for other physical locations for AWS, he added.

“We’re also going to be looking to expand to do other pop-up lofts in other parts of the world,” Kelman said. “If you look at the areas of concentrations of startups, every one of those top cities are on our lists.”

More pop-up lofts show how even AWS, which provides virtual services to companies, needs physical outlets. While Amazon doesn’t disclose sales for AWS, the business is the largest contributor to a category of North American sales that reported $1.17 billion in revenue in the most recent quarter.

1,485 Beers

AWS competes with rival products and services from Google Inc. (GOOG:US) and Microsoft Corp. (MSFT:US), which have also identified cloud as a key growth area. The companies have cut prices for their cloud products this year in an effort to gain share, leading to slowing growth for AWS in Amazon’s most recent financial results.

The AWS loft, which can hold as many as 400 people, will hold evening events and serve as a social gathering place for developers. During the four weeks that the loft was open earlier this year, a cloud-connected beer tap named the Simple Beer Service poured 1,485 beers, Amazon said.

Kelman said the company anticipates “several thousand people a month” passing through the store. Amazon will have around 10 employees on-site.

The loft is already attracting developers such as Soo Choi, senior director for customer experience for Chef Inc., a technology-management startup based in Seattle. Choi, who works in San Francisco, said she visited the AWS store earlier this year and plans to return.

“It’s a genius way to reach out and get immediate product feedback from the people that actually use your product, and not in a corporate setting in any way shape or form,” Choi said.

To contact the reporter on this story: Jack Clark in San Francisco at jclark185@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson


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