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10 Charts That Will Change Your Perspective Of Amazon’s Patent Growth

10 Charts That Will Change Your Perspective Of Amazon's Patent Growth

  • Since 2010 Amazon has grown its patent portfolio from less than 1,000 active patents in 2010 to nearly 10,000 in 2019, a ten-fold increase in less than a decade.
  • Amazon heavily cites Microsoft, IBM, and Alphabet, with 39%, 32% and 28% of Amazon’s total Patent Asset Index
  • Amazon’s patent portfolio is dominated by Cloud Computing, with the majority of the patents contributing to AWS’ current and future services roadmap. AWS achieved 41% year-over-year revenue growth in the latest fiscal quarter, reaching $7.6B in revenue.

Patents are fascinating because they provide a glimpse into potential plans, and roadmaps tech companies are considering. Amazon has one of the most interesting patent portfolios today that encompass a wide spectrum of technologies, from aircraft technology, drones, cloud computing, to machine learning. Interested in learning more about Amazon’s unique patent portfolio, I contacted PatentSight, a LexisNexis company, one of the leading providers of patent analytics and provider of the PatentSight analytics platform used for creating the ten charts shown below.

  • Amazon patents grew at a Compound Annual Growth Rate (CAGR) of above 35% between 2010 and 2019. PatentSight’s analysis shows that Amazon’s patent portfolio has increased tenfold in the last decade, and is comprised entirely of organic patents with only a small percentage gained from acquisitions. PatentSight also finds that Amazon’s patents have a falling average quality as measured by their Competitive Impact score shown on the vertical axis of the chart below. As Amazon’s patent portfolio has grown, there has been a downward trend of quality. William Mansfield, Head of Consulting and Customer Success at LexisNexis PatentSight explains why. “To maintain a high quality when growing the portfolio is difficult, as each patent would need to be equally as good as or better than the previous,” he said. Mr. Mansfield’s analysis found that Amazon’s portfolio has an average Competitive Impact of 2 today, double the PatentSight database average of 1.

  • Amazon’s patent portfolio is unique in that 100% of it is protected in the U.S. “The protection strategy of Amazon is also uncommon. While it can be the case that US firms tend to be US-centric, Amazon is an extreme case,” said William Mansfield. It’s surprising how many Amazon patents are active only in the USA (86%) and invented in the USA and active only in the USA (81%). William explained that “one factor for this US-centricity could be the great acceptance of software patents in the USA, we do also see high US-only filing for other tech giants, but are a level of around 60% vs. Amazon’s 86%.”

  • PatentSight found that the majority of the Amazon portfolio falls in the 2nd decile of Competitive Impact (top 20% – 10%). Comparable technology-based organizations have a higher density of patents in the top 10% of Competitive Impact, which is another unusual aspect regarding Amazon’s patent growth. “This is unusual compared to other big tech companies which have more in the top 10%, it could be Amazon is holding onto more lower value assets than required,” William Mansfield remarked.

  • Amazon’s patent citations most often cite Microsoft, IBM, and Alphabet, with 39%, 32% and 28% of Amazon’s total Patent Asset Index. Interesting that PatentSight’s analysis finds the reciprocal is not the case. A much smaller percentage of companies cite Amazon in return. This can be attributed to a few other firms having the breadth and depth of patent development that Amazon does today.  PatentSight found that less than 10% of their respective portfolios even mention Amazon.  William Mansfield explains that “one factor here is the larger size of these companies, vs. Amazon. However, even in absolute terms, Microsoft and IBM cite Amazon much less than the other way round. However, citation value is close to equal in absolute terms between Amazon and Alphabet.”

  • Relying on patents to keep AWS’ rapid growth going appears to be Amazon’s high priority patent strategy today. As can be seen from the portfolio below, Cloud Computing patents dominate Amazon’s patent portfolio today. In the latest fiscal quarter ending March 31, 2019, AWS delivered $7.9B in revenue and$2.2B in operating income, growing 41% year-over-year. “Amazon’s ongoing developments in alternative delivery methods in Urban Logistics and Drones are noteworthy with Drones being one area of particular strength in the portfolio as seen from the high Competitive Impact, despite the smaller portfolio size,” notes William Mansfield.

  • Amazon’s prioritization of cloud computing, AI, and machine learning patents is evident when 18 years of patent history is compared. The proliferation of AI and machine learning-based services on the AWS platform is apparent in the trend line starting in 2014. The success of Amazon’s SageMaker machine learning platform is a case in point. Amazon SageMaker enables developers and data scientists to quickly and easily build, train, and deploy machine learning models at scale.

  • Amazon is already one of the top 10 patent holders in Drone technology, just behind Alphabet and Toyota Motors. PatentSight defines Drone technology as encompassing aviation, autonomous robots, and autonomous driving. Amazon’s rapid ascent in this area is attributable to the logistics and supply chain efficiencies possible when Drones and their related technologies are applied to their supply chain’s more complex challenges.

  • PatentSight finds that FinTech is an area of long-standing strength in the Amazon patent portfolio, attribute to their payment systems being the backbone of their e-commerce business. Reflecting how diverse their business model has become, Amazon is now one of the top 15 patent holders in this area due to cloud computing, AI, and machine learning taking precedence. “FinTech is a highly competitive field with many established players, and while Amazon is not in the top 10, but top 15 players, it’s still an impressive achievement,” said William Mansfield.

  • Amazon’s patent portfolio in speech recognition encompasses Alexa, its related patents, and Amazon Lex, an AWS service used for creating conversational interfaces for applications. Alphabet, Apple, Microsoft, and Samsung are patent leaders, according to PatentSight’s analysis. The fact that Amazon is in the top 10 speaks to the level of activity and patent production going on in the Alexa research and development and product teams.

  • Amazon’s patent strategy is eclectic yet always anchored to cloud computing to make AWS the platform of choice. The following selected patens reflect how broad the Amazon patent portfolio is. What each share in common is a reliance on AWS as the platform to ensure service consistency, reliability, and scale. An example of this is their patents Video Game Streaming.

Where Cloud Computing Jobs Will Be In 2019

  • $146,350 is the median salary for cloud computing professionals in 2018.
  • There are 50,248 cloud computing positions available in the U.S. today available from 3,701 employers and 101,913 open positions worldwide today.
  • Oracle (NYSE: ORCL), Deloitte and Amazon (NASDAQ: AMZN) have the most open cloud computing jobs today.
  • Java, Linux, Amazon Web Services (AWS), Software Development, DevOps, Docker and Infrastructure as a Service (IaaS) are the most in-demand skills.
  • Washington DC, Arlington-Alexandria, VA, San Francisco-Oakland-Hayward, CA, New York-Newark-Jersey City, NY, San Jose-Sunnyvale-Santa Clara, CA, Chicago-Naperville-Elgin, IL, are the top five cities where cloud computing jobs are today and will be in 2019.

Demand for cloud computing expertise continues to increase exponentially and will accelerate in 2019. To better understand the current and future direction of cloud computing hiring trends, I utilized Gartner TalentNeuron. Gartner TalentNeuron is an online talent market intelligence portal with real-time labor market insights, including custom role analytics and executive-ready dashboards and presentations. Gartner TalentNeuron also supports a range of strategic initiatives covering talent, location, and competitive intelligence.

Gartner TalentNeuron maintains a database of more than one billion unique job listings and is collecting hiring trend data from more than 150 countries across six continents, resulting in 143GB of raw data being acquired daily. In response to many Forbes readers’ requests for recommendations on where to find a job in cloud computing, I contacted Gartner to gain access to TalentNeuron.

Key takeaways include the following:

  • $146,350 is the median salary for cloud computing professionals in 2018.  Cloud computing salaries have soared in the last two years, with 2016’s median salary being $124,300 a jump of $22,050. The following graphic shows the distribution of salaries for 50,248 cloud computing jobs currently available in the U.S. alone. Please click on the graphic to expand for easier reading.

  • The Hiring Scale is 78 for jobs that require cloud computing skill sets, with the average job post staying open 46 days. The higher the Hiring Scale score, the more difficult it is for employers to find the right applicants for open positions. Nationally an average job posting for an IT professional with cloud computing expertise is open 46 days. Please click on the graphic to expand for easier reading.

  • Washington, DC – Arlington-Alexandria, VA leads the top twenty metro areas that have the most open positions for cloud computing professionals today. Mapping the distribution of job volume, salary range, candidate supply, posting period and hiring scale by Metropolitan Statistical Area (MSA) or states and counties are supported by Gartner TalentNeuron.  The following graphic is showing the distribution of talent or candidate supply.  These are the markets with the highest supply of talent with cloud computing skills.

  • Oracle (NYSE: ORCL), Deloitte and Amazon (NASDAQ: AMZN) have the most open cloud computing jobs today. IBM, VMWare, Capital One, Microsoft, KPMG, Salesforce, PricewaterhouseCoopers, U.S. Bank, and Booz Allen Hamilton, Raytheon Corporation, SAP, Capgemini, Google, Leidos and Nutanix all have over 100 open cloud computing positions today.

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