Amazon Buys Ring Because an Amazon Security Service is Meant to Make Amazon Less Creepy
Amazon has reportedly agreed to acquire smart home company Ring for more than $1 billion, according to Reuters. Ring is best known for selling its connected doorbells, security cameras, and floodlights, while Amazon introduced its own line of smart home solutions last fall with the Amazon Cloud Cam and Amazon Key.
What this Means for Media Companies:
Amazon’s most direct motivation to acquire Ring is to improve its Amazon Key service (deliverymen entering your home to deliver packages). As Amazon moves more aggressively into grocery delivery, with Whole Foods under its wing, Amazon Key increases in relevance and an Amazon security system could definitely help some consumers feel more comfortable with strangers entering their home.
However, the acquisition also sheds additional light on Amazon’s strategy to own the home. As Ben Thompson argues below, Amazon is betting that integrated home products that seamlessly work well together, are more likely to resonate with consumers:
Ring is in a narrow sense a home security company, but in a broader sense it was by far the most popular and viable consumer Internet of Things company outside of Apple, Google, and Amazon. The real battle for the home is between those three, and Amazon not only increased its footprint in the home, but prevented the other two from doing the same.
There is one more potential benefit to this purchase: I have been arguing for a long time that the entire Internet of Things concept has put the cart in front of the horse. Specifically, companies like Amazon and Google have understandably sought to build modular ecosystems — that is what they do.
That, though, is not how new markets typically develop: usually an integrated solution comes first, because the all of the solutions aren’t good enough, and it is easier to make something passable if one company is doing everything. Only later, after scale is achieved and standards are decided, do modular systems, buoyed by lower prices and competition up-and-down the stack, take over.
No one, though, including Apple, the obvious candidate, has offered such a solution — but that is starting to change. First Alphabet is finally integrating Nest into Google proper, and now Amazon is acquiring Ring. Both promise a future where consumers can buy multiple products from a single company that are guaranteed to work well together; naturally both are increasingly focused on the same broadly-applicable use cases. Then, and only then, can both truly bring the power of modularization to bear and reap the upside of being a platform.
If you believe that integrated products are the key to owning the home, then you may also be inclined to believe that owners of the 30M+ Alexa devices (Forbes) are likely to eventually adopt Amazon as their hub for video content.
