Amazon's Alexa for Business reportedly earned less than $300,000 in its first year as customers worry about privacy and struggle with functionality (AMZN)


amazon alexa

  • Amazon Alexa remains one of Amazon’s most popular, breakthrough technologies.
  • But public perception about Alexa isn’t completely positive, with fears that devices could be listening to private conversations or that third-party skills could be used to hack privacy.
  • This may be impacting a program Amazon launched a year ago called Alexa for Business, which aims to sell Alexa-enabled offices devices to companies.
  • The program hasn’t brought in much revenue so far, by Amazon’s standards, according to one report.
  • Visit Business Insider’s homepage for more stories.

In 2016, Amazon Alexa, with its uncanny ability to understand human speech, was the toast of the tech world, with some media declaring that voice was the next big thing and Alexa had already won it.

Flash forward to 2019, where the world has begun to understand how the sausage was made; that Amazon by default keeps transcripts of what people say to Alexa; that the Echo is experimenting with more proactive ways of waking up and doing things for people. Today, the media’s attitude can be summed up more like: “Alexa, should we trust you?”

In the midst of all of this, Amazon did what so many tech companies smartly do.

In late 2017 it launched an Alexa service aimed at businesses, who spend collectively about $4 trillion a year on tech. That service is Alexa for Business, and it lets employees do things like book conference rooms, take recordings of meetings, or launch apps with voice control by using Alexa-enabled devices.

Still, business customers are notoriously, and necessarily, concerned about security. And Alexa for Business has reportedly struggled to gain much traction, sources told the The Information’s Priya Anand, with concerns ranging from privacy to functionality.

WeWork famously killed its Alexa for Business trial only two months into it, CNBC’s Eugene Kim reported in December, although WeWork didn’t say why is suspended the program. Anand reports that Johnson & Johnson also briefly launched and cancelled a pilot as well. Johnson & Johnson did not immediately respond to a request for comment.

All told, the Alexa for Business program generated less than $300,000 of revenue last year, the Information reported according to unidentified sources. 

On the one hand, from zero to the neighborhood of $300,000 in a year isn’t an abject failure.

And CNBC reported that inside Amazon, Alexa for Business features are widely used. When a company is using its own technology like that, it can be a harbinger of things to come as it works out the bugs on itself before bringing its tech to customers.

Then again, $300,000 is a pittance in Amazon’s world, hardly enough to pay for three engineers’ annual salaries.

Amazon did not immediately respond to a request for comment but a spokesperson told The Information that it’s still early days for the Alexa for Business program and the company is pleased with the response to it from customers so far.

Meanwhile, there are other indications that not everyone wants Alexa in the room with them. Best Western Hotels & Resorts president and CEO David Kong told attendees at a hotel trade show earlier this year that it had tried a pilot program that put Amazon’s Echo devices with Alexa into Best Western rooms. That pilot “did not go well,” Kong said, reported Travel Weekly’s Christina Jelski.

Alexa was supposed to help guests do things like order extra towels or report a problem with the room. But most people turned the device off, Jelski said, which he attributed to fears that it was listening to them.

Amazon is going to have to change that perception before many businesses will want to bite.

Even so, the business world also had similar concerns about privacy and security over cloud computing in its early days, where they store their apps and data in the cloud. Cloud is another industry that Amazon pioneered and its early days was a decade ago. Today, companies can’t move to the cloud fast enough, especially Amazon’s.

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