Amazon reaps a treasure trove of data with its HQ2 search

I’m fascinated by Amazon’s search for a second headquarter site, the so-called HQ2. The search has been going for a year and the company is down to 20 finalists with three in the Washington, D.C., area.

I’ve written about why the D.C. area makes sense, mostly because of the region’s infrastructure and importance to cloud service providers. Not to mention the role of the federal government as potentially the biggest consumer of cloud services.

But after reading two stories today, Amazon’s search for a new headquarters is probably about a lot more than just picking a headquarters.

Amazon received 238 bids for HQ2, according to a New York Times article. Amazon has narrowed the list to 20 but as Erica Pandey writes in Axios, think of all the data the company has collected on all of the cities that applied.

“The information effectively provide Amazon with a database chock full of granular details about the economic development prospects of every major metropolitan area in the United States (and some in Canada),” Pandey writes. “For a rapidly expanding tech behemoth like Amazon, that database could help it make expansion decisions that go way beyond the new headquarters.”

Let that sink in if you are an Amazon competitor -- both on the retail side and on the cloud services provider side. Amazon is sitting on information you are unlikely to have.

A significant part of the data collected is publicly available but there also is the information on future plans such as infrastructure investments and where they want their cities to grow and how.

“They let Amazon in on their wildest dreams,” Pandey wrote.

Another piece of critical information that Amazon now has is information on the kinds of incentives these cities are willing to offer to lure new economic development. And as she says in her Axios story, these are taxpayer funded incentives that taxpayers probably don’t even know about.

This can be vital information as Amazon makes decisions unrelated to its second headquarters such as where to site datacenters, warehouses, etc.

Why should government contractors care?

First: there is the pure business lesson of just how smart Amazon is. By making the search for HQ2 so public, they’ve reaped this treasure trove of data.

Second: as a partner or potential partner in one of those 238 cities, Amazon now knows your town in a way you don’t. There has to be a way to use that to strengthen your partnership or create new opportunities.

For me, I’m going to keep watching and learning.