Amazon.com has some of the biggest data centers in the world, where it runs cloud-based hosting services. Amazon Web Services, Inc. (AWS), is the division of Amazon.com that provides compute, storage, and database services to a wide variety of companies, including GE, Netflix, Pfizer, Pinterest, and others.

Amazons divisions also use its cloud-based hosting services. Amazon has several divisions; one of these divisions is Zappos, an online shoe and clothing shop. Assume Zappos uses AWSs cloud-based hosting services.

Other cloud-based hosting services exist, including Terremark, Savvis, and Dimension Data.

Required: In a response of 350-400 words, answer two of the following questions and post your response:

1) What possible pricing methods could Amazon use to set the transfer price for AWSs cloud-based hosting service to Zappos?

2) Why might Zappos management argue for a discounted transfer price?

3) Why might the management of AWS argue for a transfer price at the market price?

4) What advantages could Zappos experience from using Amazons AWS services? What advantages could Zappos conceivably experience by using a different cloud-based hosting service?

5) Should Zappos be allowed to use a cloud-based hosting service other than AWS? Why or why not?