Amazon.com Gobbles Up Robots

The presidential blame game started months ago, when President Obama blamed the ATM machine for the economy.  Hey Barak the Automated Teller Machine was created around the same time as Romney’s Etch A Sketch! Obama knew he was tapping into a long-standing populist myth that technology, or more specifically robots, will replace American workers. While there will be efficiencies created by automation, ultimately the demand for more robots will drive more human jobs.  Dah, who builds the robots anyhow.

So when the largest Internet retailer, Amazon.com announced on Monday that it is acquiring Kiva Systems (the developer of robotic logistics), for $775 million, I am almost certain that union leaders across the nations cried foul.  Be careful Jeff Bezos as a 20 ft. inflatable rat may one day appear opposite your house.  Amazon was right to acquire its long-time vendor, Kiva Systems, who is credited for improving margins and warehouse productivity.  Amazon is in the midst of updating its distribution network creating a larger and more robust pipeline as it conquers the physical world of retail to deliver goods faster and cheaper.

According to Dave Clark, Amazon.com’s vice president of global customer fulfillment, “Amazon has long used automation in its fulfillment centers, and Kiva’s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow…Kiva shares our passion for invention.” The invention of Kiva is the brainchild of Mick Mountz, a former Webvan employee, ironically Webvan competed with Amazon.com for grocery services before it went bust in the dot com bubble. Since 2003, Kiva has been building robots to help retailers better manage and fulfill online orders, including such notable customers as Gap, Staples and Saks.

This is the second largest acquisition for Amazon, Zappos was bought in 2009 for $847 million.  While shoes are important Kiva promises to really give Amazon the completive edge, and most probably ups the ante for Wal-mart to make a similar purchase.  The clone war has just begun.