Why Kiva Is Worth $775 Million to Amazon
On Monday, we broke the news that Amazon.com has decided to acquire Kiva Systems for more than three quarters of a billion dollars in cash. This is a heck of a lot of money, even for a company like Amazon, but as soon as you see what Kiva's robots are capable of, it'll make perfect sense.
In July of 2008, our esteemed editor wrote a beefy feature about Kiva, which is worth reading in its entirety. But if you're just looking for a snapshot of what Kiva can do for Amazon, check out these two vids: the first one comes from the 2011 Wired Business Conference, where Kiva CEO Mick Mountz discusses how Kiva robots think.
The fact is, Amazon is run out of warehouses, and the more efficient they can be in those warehouses, the more money they can make. Kiva makes warehouse operations significantly faster, of course, but it's more than that: using the robots means that Amazon can pack more stuff into a given space, they don't have to waste lots of money on heating or air conditioning or lighting, they don't have to spend lots of time training people, and they don't have to worry nearly as much about theft. Robots don't need overtime, healthcare, or 401(k).
That's all great news for Amazon, but they're buying Kiva, not just hiring them. We can only assume that it's obvious to this gigantic warehouse company that Kiva Systems are the future of warehousing in general, and they want a piece (or all the pieces) of the action. Here's what Kiva managed to do for Zappos, for example:
For those of us who have been watching the robotics industry for a while, it's exciting to see things like this happen to companies like Kiva. Robots are tools that can do more than just serve as arms in factories: by making them smart and clever, they have the potential to transform all sorts of industries, and that makes them immensely valuable. And the field is still wide open. Kiva is just the tip of the iceberg when it comes to robotics, and with a tip the size of $775 million, that should give you a clue as to how big this iceberg actually is.
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