Amazon Care Business Had Mixed Reviews – More Sense to Acquire Platforms
2022.08.25 17:38
Amazon (AMZN) Care Business Had Mixed Reviews – More Sense to Acquire Platforms
By Sam Boughedda
It was widely reported after the close on Wednesday that Amazon (NASDAQ:AMZN) is shutting down its Amazon Care business at the end of 2022.
According to one article, an Amazon Care executive stated that Amazon Care wasn’t a sustainable long-term solution for its enterprise customers.
Following the reports, analysts at BTIG and BofA released notes reacting to the news:
A BofA analyst said their channel checks find mixed reviews for Amazon Care to date.
“Many consultants were optimistic about the long-term potential for disruption, while also acknowledging the more limited physical footprint to date,” said the analyst. “While the One Medical deal has not closed yet, it offers Amazon a more robust physical footprint in top metro areas in the U.S. including New York, San Francisco, Boston, and Chicago, among many others.”
“Amazon’s reported bid for Signify Health would suggest that Amazon’s ambitions include the Medicare Advantage market, which would create a new competitor to managed care and other value-based care players like Babylon Health,” added the analyst.
Meanwhile, a BTIG analyst said their view is that it makes more sense to buy these platforms than it does to build new ones.
“Healthcare is more difficult than traditional warehouse shipments. One news report highlighted that AMZN may have been facing some challenges with care delivery, given rapid growth efforts. We estimate that operating a tele-health service across all 50 states with in-person services in at least 7 cities was a difficult project to actually implement, even for Amazon,” wrote the analyst.
“There are widely disseminated news reports highlighting how Amazon may be seeking to acquire Signify Health (SGFY, NR), and AMZN clearly wants to purchase ONEM. We believe that Amazon wants to buy these established solutions, as opposed to building them, from scratch,” he added.
