AMAZON OPENS CORPORATE OFFICE HERE
The co-founder of one of Pittsburgh’s tech startups said he made two bets that are paying off.
The first was when his company — Duolingo, a popular language-learning app that spun out of Carnegie Mellon University — decided to stay in Pittsburgh rather than relocate to Silicon Valley when it was seeking venture capital funding.
The second was to use Amazon’s cloud service to scale his Shadyside company from five employees to 80 today.
Years later, Duolingo and Amazon are sharing the same city.
Though the Seattle company’s name is synonymous with online shopping, Amazon has been investing in growing areas like cloud services, as well. Its version, Amazon Web Services, offers storage and other IT resources to startups and established firms.
Now Amazon is opening a corporate office in SouthSide Works, where about 50 employees of the world’s largest online retailer will work on projects that include Amazon web services, machine translation and Alexa, the company’s voice-controlled intelligent assistant.
“Choosing to go with Amazon web services back in 2011 was, at the time, by no means, a mainstream decision,” said Severin Hacker, who is Duolingo’s chief technology officer, adding that the service “has allowed Duolingo to scale from 0 to over 150 million users, becoming the largest education app on both iOS and Android.”
Amazon’s new corporate office on Sydney Street expands the online retailer’s presence in the region. It also has a warehouse in Crafton. Officials didn’t disclose how many employees work at the warehouse, only to say that it has “hundreds” there.
About 13 open positions have been posted for the South Side office and the company plans to hire dozens more in the years to come, said Bill Kaper, general manager of Amazon’s Pittsburgh corporate office, during a grand opening Tuesday.
The Seattle company is joining the likes of Mountain View, Calif.-based Google and San Francisco-based ride-hailing service Uber that have set up shop around Pittsburgh. And for similar reasons.
For Amazon, the location gives the digital retail giant access to talent and research coming from schools like Carnegie Mellon University and the University of Pittsburgh, as well as startups like Duolingo.
In addition, Amazon has
brought other Pittsburgh startups into the fold in recent years. In 2015, it acquired Safaba Translation Solutions, a Squirrel Hill company spun out of CMU that develops the underlying technology helping translate content into languages in which Amazon operates globally. It also bought Oakland-based Shoefitr, an online fitting platform, which was folded into Amazon Fashion.
Growing competition
Last week, Amazon announced plans to create 100,000 full-time jobs in the U.S. over the next 18 months, which will bring its workforce to more than 280,000 nationally. That hiring goal includes positions at the South Side location, according to Teal Pennebaker, an Amazon spokeswoman.
Overall, the hiring spree includes positions targeted toward all education and skill levels, the company said in a statement.
The ramp up comes as competition is tightening for online retailers, noted analysts at Moody’s Investors Services.
In a November report, the firm said that Amazon is fighting on two fronts.
“On the retail side, it is the entire brick-and-mortar universe that is now focused online. On the web front, it faces Microsoft and Google, which are both focused on the cloud and have the desire and financial wherewithal to go head-to-head with Amazon,” the report stated.
“While both sets of competitors are formidable, increased competition for the cloud will be somewhat more cutthroat than the retail side.”
The November report noted that since July, Amazon had opened 23 warehouses around the world to fill orders. It opened just three in the first six months of 2016.
While the online retailer plays its plans close to the vest — there’s little public information on how it is investing in its assorted growth segments — the primary areas that the new office will be working on are important to the company, Charlie O’Shea, vice president and senior credit officer for Moody’s, said in an interview Tuesday.
Cloud services “is a fast growing and highly profitable venture,” Mr. O’Shea said. “Right now it’s basically a storage business, but at some point, you’ll see higher profit services.”
Meanwhile, Alexa is driving devices.
“We think devices and content will drive Prime [memberships], rather than free shipping,” Mr. O’Shea said.