Amazon is unlike any other company that has ever existed. Over time, it has transformed from a bookstore to a retail store, a computing infrastructure company to an intelligence company, a grocery company and now a healthcare company. The list will continue to grow in the foreseeable future as the company’s ambitions further expand.  

Standard Oil and General Electric—two of the most successful companies ever—are the go-to comparison for massive, interlinked companies. But those who call Amazon the Standard Oil or GE of the 21st century use a comparison that falls short and frankly undersells all that Amazon has accomplished.

On the surface, Standard Oil shares a major trait in common with Amazon: Namely, it drove prices down to historical lows, which customers liked and suppliers hated. But the comparisons mostly stop there. Most critically, Standard Oil, like most conglomerates, primarily grew through acquisitions, while Amazon grows through its own creations.

GE is another historical comparison for a massive, diverse collection of businesses, but like Standard Oil, falls well short of resembling what Amazon has become. GE was an eclectic collection of businesses that some called an “actively managed mutual fund”—an unrelated group of businesses. Companies like Standard Oil and GE were also massive suppliers, meaning they often sold their products to distributors, retailers or franchises that handled the sale to the end customer. In contrast, Amazon, is built on the fact that it controls the customer relationship—no one can disintermediate it.  

How technology is reinventing conglomerates

Before the internet, the primary benefit of building a conglomerate was to achieve an ever-decreasing cost of capital, which meant it was cheaper to put money into buying companies and returning profits to shareholders. The companies and conglomerates that expanded for less won more. Ironically, most conglomerates don’t actually have many synergies across the business units.

But today, cost of capital is only half of the picture. Wielding a technological backbone to the degree that Amazon does is not only as important, but more integral to the company’s success because it lowers the cost of capital even more.

Amazon is building on a diverse set of strong foundations: Amazon Web Services, its cloud computing infrastructure, Amazon Prime, its loyalty program, Amazon Retail, its eponymous website and associated Marketplace, and Amazon Logistics, its fulfillment and logistics platform. Each of these services, which Amazon built from scratch, allows the company to create and test new business units much more quickly and cheaply than its competitors, though it would be hard to quantify how much money Amazon has saved from this model since it doesn’t need to build new tech for each new project.

So what is Amazon?

When it comes to describing the structure of Amazon, the company is centralized at the very top, from both a leadership and capital allocation perspective, but has a modular framework the rest of the way down. It is not a monolith, but rather a collection of dozens of startups with a central technological and capital allocator, allowing the company to expand nimbly into almost every industry.

Taken together, Amazon, at its core, has evolved into something much more amorphous than a conglomerate: the world’s first true, industry-agnostic Platform Ecosystem. It uses its technology and capital allocation to invest in and dominate more industries than any other company. While most companies are defined by what they create on the outside, Amazon is defined by what it creates on the inside.

But even with its unique and forward-thinking structure, Amazon is not exempt from failing. Rather, it’s the company’s approach to its many failures—to learn from them and move on—that sets Amazon apart. Today, given the infinitely more moving pieces Amazon operates, some may perceive the company as moving more slowly than in the past. But there is no other company with more than 500,000 employees and $180 billion in sales for 2017 that could manage its largest acquisition ever—Whole Foods—from beginning to end in just 60 days. That’s the power of a Platform Ecosystem, and only the first hint at the true potential behind Amazon’s revolutionary structure.