It's too hard to buy tech companies: Amazon

Amazon chief technology officer Werner Vogels has conceded that his company has a poor track record in acquiring companies outside the retail space and has effectively ruled out the prospect of buying a business just for its technology.

Amazon CTO Werner Vogels
(Credit: Luke Hopewell/ZDNet Australia)

The technology chief of the world's largest cloud infrastructure provider and online retailer was in town last week for a series of talks about Amazon's popular web-based hosting and storage services.

On Friday afternoon Vogels dropped into the Fishburners start-up co-working office to discuss cloud computing and spruik Amazon's wares.

His visit coincided with reports that the company plans to build a local datacentre to service Australian customers. Although he declined to comment on those reports, he revealed the company's acquisition strategy in response to a question about if and when Amazon would buy local cloud infrastructure start-up OrionVM.

Amazon has a history of acquiring companies in the online retail, commerce and communities space, most recently with UK online bookseller The Book Depository, but by comparison has been far less active in acquiring rival technologies and products.

Vogels said this was because of the level of difficulty to integrate smaller firms into a company the size of Amazon and then deliver their products to its huge customer base.

He virtually ruled out any future tech-based acquisitions.

"At the scale of Amazon, it's really hard to incorporate tech with all the monitoring capability and the need to modify this software," Vogels said.

"Mainly because of the scale we are operating in it's really hard to acquire tech."

"It's a really high bar to acquire technology just to add to our platform."

According to investor analysis site fool.com, Amazon's strategy targets niche retail sites with a small and highly engaged community, but the strategy allows these sites to operate autonomously, for example IMDB.com.

Vogels said any acquisitions would most likely be talent-based.