Amazon launches software service

Summary:The e-tailer begins selling software licenses aimed at making business applications more affordable for small-business customers.

Amazon.com on Monday launched a new software-licensing service on its site aimed at making it easier and more affordable for small-business customers to purchase applications.

Rather than purchasing several copies of software packages, companies will have the option of buying a license for each employee that will use the application. The idea is to give small, mid-sized and home businesses a way to avoid expenses typically tied with purchasing, upgrading, storing and maintaining applications, the Seattle-based online retailer said.

The development comes as Amazon falls under increased pressure from analysts and investors to turn its first profit by year's end.

Earlier this month, the e-tailing giant unveiled plans to add a PC store and a business bookstore as part of ongoing efforts to reach profitability, but analysts have often criticized Amazon for similar expansion efforts. Many analysts have come down hard on Amazon for expanding too quickly from its core business of books, videos and CDs into areas that have turned out to be unprofitable for the company and have resulted in slim gross-profit margins.

Despite its financial pressures, Amazon is still nabbing orders. The company reported that its coffers held more than $600 million at the end of the first quarter.

Through its online software store, Amazon is offering customers product licenses for applications from a number of software makers including Microsoft, Symantec, McAfee and Computer Associates. Amazon says its customers will save 20 percent off the full retail prices if they buy the software licenses through its site.

In typical Amazon launch fashion, the company is giving its first 500 customers who purchase two or more licenses for Microsoft's new Office XP suite a free Visioneer OneTouch scanner.

Topics: Amazon, Microsoft, Software, Symantec

About

Ian Ferguson is a partner at Olswang, specializing in commercial transactions including in relation to sourcing, technology, and telecommunications. Ian advises customers and suppliers on sourcing transactions across sectors including business processes, IT services, communication services and facilities management, multi-jurisdiction... Full Bio

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