Teresa Escrig

News and oppinion about Cognitive AI & Robotics

Archive for July 10th, 2012

Why Amazon acquired Kiva?

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by Mark P. Mills, 3/23/2012

Amazon’s enormous, automated and well-organized warehouses are the stuff of legend, as are their path-breaking joint ventures with vendors, repair operations and UPS shipping. Still, physical order fulfillment reportedly costs nearly 9 percent of their $40 billion in global revenues.

Amazon was amongst the first to build data centers at Cloud scale – a scale that Google engineers labeled “warehouse scale computing.”   But to disrupt traditional retail Amazon had to do more than create a customer-friendly Web interface for their warehouse-scale computers.  They had to solve the old-fashioned physical warehouse problem in order to distribute the objects they sold.

Enter Kiva’s robots, and their inevitable progeny; the logical connection between the cyber and physical worlds. Think of Kiva bots as the hands and feet of the Cloud. They are not autonomous Star-Trek-like agents, but are wirelessly connected to and controlled by the Cloud in real-time.

When you tap “place your order” on your iPad’s touch-screen you are literally reaching through the Cloud to become one with Kiva to grab a box in the warehouse. Such robots are practical today because of a confluence of enabling technologies; cheap and powerful processing and communications, advanced electro-motive power, and clever software. All this is the domain of computing and square in Amazon’s wheelhouse.

Amazon needs to own Kiva for the same reason they own computing.

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Automated robotic warehousing is a hot investment focus

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Amazon just acquired Kiva Systems for $775 million and now Permira, a European private equity firm, announced that it was acquiring Intelligrated for an amount in excess of $500 million! The deal is expected to close after the summer.

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