We attribute Amazon's ongoing rapid retail revenue growth (see chart 1) to its first-mover advantage in creating and sustaining customer expectations for ease of purchase and fast, free delivery for the fee-based Prime loyalty program, which has over 100 million paying members. First-mover advantage was on full display when Amazon (Amazon Web Services [AWS]) inaugurated its infrastructure-as-a-service (IaaS) business in 2006, offering access to raw compute and storage capacity to customers of all sizes. Since then, Amazon Web Services has continued to spend heavily, in the billions of dollars annually, and maintained its competitive advantage. The operating margins in the AWS segment have been strong and generally expanding since Amazon began reporting them in 2014 despite price reductions, reflecting demand
