From CB Insights, Aug. 29:
Amazon has its eyes on the residential and commercial real estate markets. We take a look at how the tech giant is expanding far beyond its e-commerce ambitions.
Amazon is moving well beyond e-commerce and broadening its smart home focus into the lucrative world of real estate.
While the tech giant has been instrumental in the growth of online retail, it’s now gaining traction in the property market. It shelled out $4B for its Seattle campus, including The Spheres, and after a highly publicized bid for the site of its second headquarters (known as HQ2), Amazon settled on Virginia. The company is set to invest $2.5B on the location and another $230M on a new Operations Center of Excellence in Nashville.
But beyond real estate ambitions to support its own growth, Amazon also seems to be looking to move into the broader industry as a whole.
While its primary focus has been on the smart home arena, Amazon is widening its reach to include other aspects of commercial and residential spaces. The company is creating smart buildings, serving as an intermediary between home buyers and sellers, and even making preliminary moves into home building.
In this brief, we examine Amazon’s moves within the residential and commercial real estate spaces to get a view into where the company might be headed.
Starting a smart revolution
Amazon is fueling a smart revolution — starting with our homes, offices, and buildings. Through its Alexa-powered devices, the e-commerce giant is making us even more connected.
Smart homes
Amazon is on a quest to dominate the smart home product market, which is expected to reach a value of $7T globally, according to CB Insights’ Industry Analyst Consensus. And it’s doing so with the help of Lennar, one of the largest home construction and real estate companies in the U.S.
New Lennar homes will have built-in smart home capabilities powered by Alexa, such as smart doorbells from startup Ring (which Amazon acquired for upwards of $1B), lights, locks, and thermostats. Integrating Alexa through these amenities could add value for Lennar home purchases.
Additionally, the companies have created “experience centers” — model homes outfitted with Alexa-activated technology that showcase a smart home experience. The partnership could benefit both organizations, with Lennar homeowners becoming more deeply embedded customers within the Amazon ecosystem, and Amazon customers buying Lennar homes featuring Amazon devices as a value-add amenity.
Smart offices & Buildings
Amazon is putting Alexa to work outside the home too, integrating its Echo devices and voice assistant technology into a commercial setting. In 2017, the company launched Alexa for Business, a platform which allows Alexa to be used as an intelligent assistant in the office.
Booking meeting rooms, managing work calendars, and answering common onboarding questions for new employees are just some of the tasks Alexa can do in the workplace. Organizations can choose among thousands of Alexa “skills” — voice commands developed for businesses — or build custom ones tailored to their needs. Employees can even use their personal Alexa devices at their office desks or at home to join meetings and access workplace resources.
Amazon itself has used Alexa, with 53% of its meetings kicking off with a voice command rather than a manual call-in. As a result, meetings have started in under nine seconds on average, according to data obtained by CNBC.....MUCH MORE
WeWork was one of the earliest adopters of Alexa for Business, making Alexa-enabled devices available in meeting rooms at its New York headquarters. Other companies have since followed suit, including Condé Nast and GE.
Moreover, Amazon is enabling more connected buildings through Amazon Web Services (AWS), its cloud computing platform. For instance, Cognizant’s Connected Places is an integrated solution hosted on AWS for managing geographically dispersed buildings, providing a real-time, unified view of facilities and services, including lighting, utilities and energy, smoke and fire alarms, building automation, and predictive maintenance.
But smart devices broadly come with a host of privacy issues. In a 2019 survey, 63% of respondents said they found connected devices “creepy” in how they collect data about people and their behaviors. More than half distrust their connected devices when it comes to protecting their privacy, and 75% feel concerned about other organizations using their data without their consent....
