Alexa is Not about Voice Commerce

Posted — Feb 12, 2017

Many consumer brands are trying to incorporate voice interactions or voice commerce into their products. Apple has Siri locked in its ecosystem. So does Google for the most part. But Amazon is pushing Alexa to be the first mainstream voice touch point.

I wonder if that is the end goal. Sure Amazon would like a frictionless interface for consumers to buy more. My hypothesis is Alexa is meant to convince developers and startups that Amazon has all the products and tools that any “technology” company would ever need. The product line has everything from $5/month VPS instances that compete with Godaddy to running oil and energy market-related applications for GE. All infrastructure and data processing needs can be fulfilled within the Amazon ecosystem.

You would think that Google and Microsoft would leverage their expertise into selling more cloud infrastructure. Google’s revenue is overwhelming based on advertising. Microsoft’s comes from Office and licensing enterprise software. Both are in the process of shifting their mindset, but it is not a natural process. This direction might be in Amazon’s DNA or at least related to their previous experience with AWS. They built their website and realized they could leverage that knowledge and rent it out to others. They were the first big cloud provider that enabled developers and shadow IT groups to test, build, prototype and run their products in the cloud. Once hooked those customers were not going anywhere else as they developed more sophisticated products and moved on to other jobs. The use of AWS was organic. It had to be. They didn’t control any of the touch points like the operating system or devices (even though they tried).

How will we know if this hypothesis is correct? The easy answer is we see an uptick in new voice products developed on AWS. It will take time. Voice interactions or commerce have challenges. For example, the discovery of skills or apps. Can you search for Alexa skills without a phone or going through a website? We can’t turn the knob and find more content like on radio. Any form of monetization will be intrusive. How about interjecting ads? We all know how much consumers love pop-ups and interstitial ads. These points of friction require resolution. Otherwise, voice technology will have a short hype cycle.