Amazon.com Inc. is planning to build teams at its new $2.5 billion second headquarters in Arlington, Va., to further power its fast-growing cloud computing business and Alexa line of voice-driven smart devices.
Analysts say the online retailer is motivated to create new teams at the Arlington site, called HQ2, for Amazon Web Services Inc. and its consumer division, which includes the development of Alexa products, to strengthen market share in areas where the company sees the most potential.
The new teams will be housed at Amazon's 4 million-square-foot campus in Arlington's Crystal City neighborhood. An Amazon spokeswoman confirmed that the company is hiring for both the AWS and consumer teams in Arlington as part of the 25,000 new jobs it plans to create at HQ2. But the spokeswoman said she could not break out headcount by division.
"We do expect some internal transfers from Seattle to Arlington to help us build our culture, hire great talent locally and grow our teams here," she said.
According to Amazon HQ2 job listings posted over the past few months, the company is advertising for 30 AWS positions and 25 for the consumer Alexa team. The jobs at HQ2 are needed to improve automation and tooling across various cloud services such as backup recovery and business applications and help the company develop new capabilities and features within the Alexa line, which includes the popular Echo speaker devices.
The positions require master's and bachelor's degrees in computer science or mathematics and/or several years of software development experience.
Approximately half of the 25,000 jobs will be tech roles, and half will be non-tech in areas such as legal, finance, and human resources. Amazon said in its announcement for HQ2 last fall that the average annual wage for the new jobs is expected to be $150,000.
Growing businesses
The company's plans for the new teams indicate that the company expects continued growth in both AWS and the Alexa line.
Launched in 2006 as a subsidiary of Amazon, AWS is one of Amazon's fastest-growing businesses. Its revenue has jumped nearly tenfold since 2013 for the entire segment that includes public and private clients. AWS revenue reached $25.6 billion in 2018 and is on pace to reach a total of $32.15 billion in 2019, according to data from S&P Global Market Intelligence.
According to global research firm Gartner Inc., AWS was the No. 1 player in the worldwide public cloud services market as of 2018, capturing an estimated $15.5 billion worth of revenue. It was followed by Microsoft Corp. with $5 billion and Alibaba Group Holding Ltd. at $2.5 billion. Gartner's research focuses on revenue from a type of cloud service available via a public internet connection as opposed to a private one.
Amazon is recruiting workers for the AWS team at HQ2 as the company competes with Microsoft for the Pentagon's $10 billion cloud computing contract known as the Joint Enterprise Defense Infrastructure, or JEDI.
Defense Secretary Mark Esper is reviewing the contract after allegations by U.S. President Donald Trump that JEDI was rigged in favor of AWS. Oracle Corp., which was also vying for the contract, filed a lawsuit earlier this year alleging that a former AWS employee who was then a product director at a Pentagon technology unit drafted the contract to make it favorable to AWS. In July, a federal judge dismissed Oracle's bid protest, The Washington Post reported July 12.
Amazon did not immediately respond to Market Intelligence's request for comment about the JEDI contract.
Michael Pachter, managing director for equity research at Wedbush Securities in Los Angeles, said he believes Amazon is ramping up an AWS team at HQ2 as part of its hopes of eventually winning the JEDI contract.
"They are hopeful that a lot of people in the chain of decision-making are thinking about life after the Department of Defense and life in the private sector," Pachter said in an interview. "The DOD programmer is the perfect guy for Amazon to hire."
Alexa is also an area of rapid growth. In Amazon's second quarter earnings, the company did not break out sales figures for Alexa products but said that there are now "hundreds of third-party devices with Alexa built-in" and that the number of Alexa-compatible smart home devices has grown to more than 60,000 products.
Amazon held the No. 1 spot in the worldwide smart speaker industry during the second quarter, shipping 6.6 million Echo speakers during that period, according to global research firm Canalys.
David J. Silverman, a senior director in Fitch Ratings' corporates group, said that while the company is hiring in all areas of growth, the Alexa segment has been a particular focus as Amazon continues to develop voice recognition and artificial intelligence capabilities.
"They have a number of stand-alone products that they offer for consumer homes and potentially some businesses," Silverman said in an interview. "They have also been working with certain partners to make Alexa-enabled devices that could be integrated into home heating and cooling systems."