What Amazon’s Acquisition of Ring Means

At the beginning of 2018, I wrote a blog covering Amazon’s Key delivery service, which was introduced to enhance package delivery by allowing couriers access to customer’s homes to ensure safe package delivery regardless of customer availability. Amazon’s latest innovation raised concerns about how far the boundaries of technology can be pushed to make consumers lives more convenient by letting strangers through their front door. Despite this scrutiny, Amazon is pushing ahead with this service through its latest acquisition of Ring, the camera-enabled smart doorbell startup.

Enhancing the Key Service with Ring

Before Amazon’s acquisition of Ring, it relied on the Amazon Cloud Cam, which it developed to release the Key delivery service, and partnerships with existing lock makers. Ring’s doorbells extend this service’s existing capabilities through an additional camera, and through audio equipment that allows customers to chat with delivery people and answer the doorbell remotely. This deal was reportedly worth more than $1 billion, making it the company’s second-largest acquisition behind its $13.7 billion purchase of Whole Foods Market in 2017, which bolstered Amazon’s Fresh food delivery service.

A Message to the Competition

This move—and its acquisition of Whole Foods—not only strengthens the company’s Internet of Things offerings by extending its selection of connected devices, but also sends a message about Amazon’s commitment to business-to-consumer (B2C) services. By enhancing its Key service with Ring, it is more competitive with other tech incumbents engaged in the smart home like Google (which acquired Nest in 2014 and now owns a range of energy and security products), Apple, and Samsung. B2C services are quickly becoming the business model of choice across a variety of industries, and Amazon is one company that is taking it seriously and executing it well.

In the energy industry, Guidehouse Insights has seen a transformation toward this model, as is highlighted in the Energy Cloud 4.0 white paper. Several utilities are already taking steps toward offering B2C services, including Dutch utility Eneco, which offers monthly energy monitoring services to its customers through Quby’s Toon platform. In the security sector, Comcast is increasingly diversifying and shifting toward offering security and automation services in the home to increase revenue (as US consumers drop traditional cable television packages) and customer satisfaction. Not to mention the variety of other service-based businesses that have skyrocketed in popularity, like Uber, Netflix, and Spotify. Once an online retailer, Amazon has become a diverse service-based business, and the company’s acquisition of Ring to support its Key service is a signal to other retailers that it intends to push forward and innovate in the home services space.