Hummus Manifesto Part 4 - It's Amazon Stupid!

In Hummus Manifesto part 3 I suggested the following:

"Let us declare Israel the cloud computing center for this region of the world. We can lure Amazon and Google to build massive cloud data centers here with matching money and tax incentives. Maybe it is not too late to get Google to wire the entire country with broadband. The debate over whether to give Intel a $100MM grant or $400MM grant is an argument over one company and one city that has some tentacles into that city. The same $400M grant, matched by Google and/or Amazon would be the equivalent of building a railroad across our country. It is infrastructure that fundamentally increases our national competitiveness."

In an interview last week, my colleague Aaron Makovski of Pitango and the Israel High Tech Association excoriated the government for hesitating on giving a $1 billion grant to Intel to expand their fab. I pondered this for a week, watched Jeff Bezos launch the Fire Tablet and then the nickel dropped. The most important thing Israel can do now in terms of both technological innovation leadership, to increase employment and to address the cost of cottage cheese in Israel is to bring Amazon and Jeff Bezos here. Here is why:

Amazon is in the business of delivering goods and services inexpensively and efficiently. When pundits questioned how and why they moved from selling books to selling an IT cloud, the answer was not obvious but now it is. Amazon excels at being the most price competitive provider of goods and services. It is true in books, IT, cloud, $199 tablet computers, on-demand movies and cottage cheese.

The Israeli government, as I pointed out in part 2 of the Hummus Manifesto forgot the playbook of bringing leading companies to Israel and instead stayed stuck in the 80s and 90s with Intel, Microsoft and Motorola. We need a renewed focus on bringing leading edge companies here and Amazon should be the first. Intel is under threat from ARM processors in the era of tablet computing and a Billion dollars does not leapfrog us forward technologically as a country. Amazon, on the other hand, is disrupting everyone from book publishers to Apple to Walmart from the bottom. Yes...Walmart.

Bringing Amazon to Israel would immediately make us a player in cloud computing. We should subsidize the establishment of an AWS (Amazon Web Services) bleeding edge cloud facility here. We should push to get tablet software development here and same for media delivery services that Amazon excels in. Our Israeli ingenuity will help them excel at providing all this for a low cost and we can train our engineers on their bleeding edge platforms. And there is an added benefit. Amazon is also in the low cost food delivery business. Imagine them undercutting the supermarket chains in Israel like they do in the USA with a web storefront and low cost delivery. These are the waves of the future: Tablet computing, cloud computing, wireless media services and great products and Amazon is in all of them. And we can lower the price of cottage cheese at the same time.