Amazon.com Inc (AMZN.O) accelerated its efforts to win over corporate clients on Wednesday by announcing an email and scheduling service that will compete with Microsoft Corp (MSFT.O) and Google Inc (GOOGL.O).
The service, dubbed WorkMail, will launch in the second quarter and has been developed by the company's cloud computing unit, Amazon Web Services (AWS). It highlights Amazon's efforts to convince deep-pocketed companies, called enterprises in tech parlance, to shift more of their work to AWS.
Launching an email and scheduling service is likely the first step toward a broader suite of Amazon tools to gain corporate clients, analysts said. For example, Google's Gmail offers many other services beyond email and calendars including file-sharing and video conferencing.
AWS has spent the last couple of years trying to get corporate clients on board because big businesses spend more on data centers than startups, who were the initial focus of its business. But there are concerns that Amazon is spreading itself too thin, given its other sizeable investments in areas like Hollywood-style production and consumer devices.
"Email is a Trojan Horse into the enterprise," Baird analyst Colin Sebastian said. He added that email is a $1 billion opportunity for Amazon given the popularity of AWS and Amazon's willingness to sacrifice margins for volume.
If Amazon adds more services for companies, it could bring in about $10 billion more in extra revenue, Sebastian said.