Walmart to Vendors: Get Off Amazon's Cloud (wsj.com)

Amazon vs. Walmart saga continues. It turns out, Walmart isn't thrilled about its partners using Amazon's cloud, and it's telling them to get off it (alternative source). From a report: Walmart is telling some technology companies that if they want its business, they can't run applications for the retailer on Amazon's leading cloud-computing service, Amazon Web Services, several tech companies say. [...] Walmart, loath to give any business to Amazon, said it keeps most of its data on its own servers and uses services from emerging AWS competitors, such as Microsoft's Azure.

Comments

Shock Horror!

[hackel]

Huh, Walmart is being a complete monopolistic dick? Sure didn't see that one coming...

Re:Shock Horror!

[TWX]

Before anyone starts ranting that Walmart is not a monopoly, there are two kinds of monopolies. Horizontal where the company controls a particular step of the process across the entire market, and vertical, where the company controls every aspect from beginning to end as much as possible and dictates all aspects of everything that the company deals with.

Walmart would be an example of a vertically-integrated monopoly in this sense. Perhaps not as naturally-so as, say, a steelworks from the late 19th and early 20th century where the company owned everything from the mining-claim to the trucks delivering fabricated parts to customers, but Walmart dictates terms to manufacturers moreso than just about any retail middleman had before, and continues the monolithic control all of the way from the importation process up through the cash register.

Re:Shock Horror!

[FooAtWFU]

No!!! This is not about it being a monopoly; if anything, this is about Wal-Mart as monopsony, a single buyer. It's different.

Re:Shock Horror!

[Anonymous Coward]

Walmart is a dinosaur. It is quickly going the way of the dinosaur in part because of the draconian nature of its power players, grappling with retaining their cash cow instead of doing what a REAL business - in a market economy - does...innovate. Those same, creativity stricken, power players would even be unable to work in a real 9-5 job. Sadly that is the case for most of that echelon.

Re:Shock Horror!

[voislav98]

Amazon just bought Whole Foods, making it a direct competitor to Walmart. So, Walmart is being sensible. They are saying they don't want any of their data on a competitor's server. Using a car analogy, it's like Toyota saying to their suppliers they don't want their data stored in the GM Cloud Service. There are no guarantees that Amazon would not snoop on the data, no matter how walled off the service is from the rest of the company. This is quite common in the industry, the suppliers are still free to do whatever they want with their own data, but they must follow directions from the customer regarding customer data. So before crying monopoly, consider whether any company would freely hand over their data for storage to a competitor.

Re: Shock Horror!

[SteveHulett]

Right on! Walmart is now the Kmart of this generation. Once a powerhouse, they refuse to change with the times and are going to be blown away by the competition that uses better ideas rather than monopolistic control. I watched Walmart overcome Kmart almost over nite because Kmart refused to change a thing about their business model when Walmart was better. This resulted in Walmart devastating Kmart. Amazon is now doing that to Walmart, and they are going to lose to the better idea.

Re:Shock Horror!

[squiggleslash]

Amazon just bought Whole Foods, making it a direct competitor to Walmart

While both sell food, I wouldn't call them competitors.

Amazon is a competitor to Walmart because of what they already sell, they both are one stop "shops" for "everything". Amazon has a better selection, Walmart is within 15 minutes drive. It has nothing to do with Walmart worrying that people will go to Amazon to buy organic whole earth GMO-free quinoa - just read the outright snobbery in one of the other threads about Whole Foods, those are not people who'll be caught dead in Walmart.

Re:Shock Horror!

[Insanity Defense]

This is quite common in the industry, the suppliers are still free to do whatever they want with their own data, but they must follow directions from the customer regarding customer data.

Strange. I'm a customer yet companies are allowed to do whatever they like (against my will) with MY DATA.

Re:Shock Horror!

[ShanghaiBill]

vertical, where the company controls every aspect from beginning to end as much as possible and dictates all aspects of everything that the company deals with.

No. Horizontal integration can make you a monopoly. Vertical integration does not, unless you horizontally dominate at least one of the layers. Having dominating power over suppliers is not a monopoly, it is a monopsony.

Re:Shock Horror!

[swillden]

Before anyone starts ranting that Walmart is not a monopoly, there are two kinds of monopolies. Horizontal where the company controls a particular step of the process across the entire market, and vertical, where the company controls every aspect from beginning to end as much as possible and dictates all aspects of everything that the company deals with.

Poppycock.

The notion of a vertical monopoly does exist, but it's used to describe a monopoly (controller of nearly 100% of a market) that achieved its monopoly status through vertical integration. It is not the case that any vertically-integrated company is a monopoly, even if they have achieved total vertical integration. As long as there is still substantial competition at each level in the supply chain, it isn't a monopoly in any of them. If competition has effectively been eliminated at any level in the supply chain, then the company is a monopoly at that level regardless of how integrated they are at other levels.

Wal-mart might well be a regional monopoly, in the sense that there are regions of the country where they have driven all competing retailers out of business, but they're not a monopoly in general. And it's further possible that they'll eventually leverage vertical integration to become a general monopoly. But they're not now.

Re: Shock Horror!

[ShanghaiBill]

The history of how Walmart crushed Kmart and other competitors is interesting. Walmart was very innovative, and used technology to streamline their supply chain, cut shrinkage, avoid surplus inventory, etc. This let them cut prices below what their competitors could charge.

They also used tech to forecast demand and improve sales-per-customer. Before Walmart, a department store would have a "men's accessories" section with ties, belts, socks, etc. But then Walmart scrutinized checkout data and make the SHOCKING discovery that people don't buy ties, belts, and socks together. They buy ties with shirts, belts with pants, and socks with shoes. Who would have guessed? So Walmart reconfigured their sales floors to put the belts next to the pants, the ties next to the dress shirts, and the socks near the shoes. The result? Increased sales.

Re:Shock Horror!

[Dan East]

Walmart dictates terms to manufacturers moreso than just about any retail middleman had before, and continues the monolithic control all of the way from the importation process up through the cash register.

Walmart still pales in comparison to Sears at its peak. In 1960 one in three Americans had a Sears credit card. 1 in every 200 workers in the country worked for Sears. In 1974 they built the tallest building in the world at the time. They literally sold mail-order houses, and of course every single item that you could ever need to put inside that house, including the appliances themselves, which were manufactured under the brands Sears owned. Farmers could order parts for their tractors from Sears.

Walmart merely has the ability to say "We will sell your product if you provide it to us at this price"... but doesn't every other retailer have the ability to say the same thing? The fact that Walmart would then order such a vast quantity of them to make an extremely low profit margin appealing to a manufacturer is just the leverage they have because of their size. The manufacturer can still say no if they want to, or if they feel that is in their best business interests.

Regardless, Walmart does not have the clout Sears had at its peak - Sears was vastly more disturbing in many, many ways with their vertical monopoly, and we can see how that eventually worked out for them down the road.

Re: Shock Horror!

[Quirkz]

Odd. I don't think ever in my life I've bought shoes at the same time as socks. For that matter, I almost never buy shoes from the same kind of store that I'd buy my socks from. And I pick up belts when they wear out, not when I get new pants. Maybe I'm weird?

I could at least see matching a tie with a shirt.

Of course I never buy shoes, belts, and a tie together, so there's definitely no value in lumping those three items. I just still have to question the value of this particular insight, particularly compared to something like reduced shrinkage.

Re:Shock Horror!

[mspohr]

I wouldn't be caught dead at Walmart... or Whole Foods.
They are both manipulative, corrupt retailers (each in their own way).

Re: Shock Horror!

[0100010001010011]

Walmart is on track to become Kmart but they're not there yet. If Walmart did the right things they could crush Amazon.

They opensourced their cloud tools. They have a supply chain management that Amazon wishes it had.

Re:Shock Horror!

[Anonymous Coward]

You know that Amazon has services in their offerings that their competitors don't, right?

It's very possible for a manufacturer to have built something that is dependent on one of the AWS services that doesn't exist on Azure, and now that Walmart is throwing a hissy fit, they have to completely rearchitect an information system that may run perfectly, and may have been running for months / years?

This is petty and petulant on the part of Walmart. This isn't about 'we don't want our competitor to have sensitive data' - anything sensitive should be encrypted at rest anyway if the manufacturer's IT staff isn't completely retarded. This is Walmart trying to stick it to Amazon while also sticking it to their suppliers yet again.

Fuck Walmart

[drew_92123]

I avoid them if at all possible... Amazon gets a fair amount of my business as do local businesses, but Walmart can go fuck themselves...

Re:Fuck Walmart

[known_coward_69]

i buy next to nothing from amazon and buy water and snacks and other household stuff from jet.com which is wal mart

free shipping i don't have to pay $100 a year for

Re:Fuck Walmart

[Desler]

free shipping i don't have to pay $100 a year for

"Free" shipping? You're joking, right? The cost of shipping is baked into the price of what you're buying.

Re:Fuck Walmart

[squiggleslash]

Amazon does free shipping too. Prime is for unlimited two day shipping (plus no minimums, a Netflix style video service, a cut down Rhapsody type music service, and quite a few other benefits.)

Re: Fuck Walmart

[RabidReindeer]

covfefe

Re:Azure is MORE Secure?

[sl3xd]

Let's not forget that Wal*Mart is the same group of geniuses that brought us the laughably insecure CurrentC/MCX - and after that folded, they doubled down, and deployed it anyway as "Wal*Mart Pay".

And seriously? Complaining that your vendor uses AWS for their own business?!?

What's next, saying they'll penalize companies that use Ford delivery trucks?

Lawsuit in 3, 2, 1...

[3vi1]

Some directors apparently slept through their college discussions on anti-trust and restrictive practices.

Re:Azure is MORE Secure?

[Zocalo]

Azure isn't owned by a company that is in direct competition with some of Walmart's businesses. This has nothing to do with sane or cost effective business practices for their IT service vendors and everything to do with trying to leverage the fact that Walmart is the bigger player (than the vendors) to deny revenue for a competitor.

Sadly, while some are already throwing words like "monopoly" around, I suspect this is perfectly above board - these are businesses looking to provide a service *for* Walmart, not sell their products *through* Walmart. As such Walmart is perfectly entitled to specify entirely arbitrary requirements for how Walmart's data and services are provisioned such as mandating a the use of one of their preferred suppliers. If Walmart wants to pay its IT service vendors more to use Azure, Google, or whoever instead of Amazon (assuming Amazon is actually the cheaper option) that's their business, dick move or not. It is, however, probably also going to impact on their bottom line, which might be something the shareholders might want to take note of.

Re:Azure is MORE Secure?

[bluefoxlucid]

This is hilarious. It's anti-competitive and abuse of monopoly position.

WalMart could potentially be taken to task for a lot of shit, but it never is. They don't allow CDs with explicit content, so their selection of music is all censored. This accounts for 2% of WalMart sales, but not 2% of WalMart revenue or profits; it accounts for over 10% of music industry CD sales, or at least it did back before digital streaming became big. That's basically WalMart leveraging its enormous monopoly power to constrict free speech--it's still a tough case due to WalMart being a private enterprise, but it'd be an interesting Supreme Court case.

Consider: we have a lot of consumer protections that amount to, "You're infringing on consumers's rights because they have no alternative and they're not free to choose." Cell phones need to be unlockable or unlocked because everybody locks them. Net Neutrality is there basically because consumers will never be able to get the benefits of a neutral network otherwise. "You're too damned big and you behave like a de-facto part of government" is the unspoken argument. WalMart is that.

Actually, getting out of AWS is good advice

[williamyf]

Get out of AWS and GoggleCloud ASAP!

Go instead to either Asure, or to OpenStack...

If you only use IaaS, this is not as critical, but if you use PaaS, SaaS, or are developing your own Cloud Software from scratch, this is critical.

Amazon and Google have their own set of APIs and management interfaces. So, once in their clood, never back to on premises, or to another cloud from a different provider (there are some efforts to replicate some of Amazon's APIs, but those are Tepid and Incomplete).

With Asure and OpenStack, the advantages are plenty. Want to go from on-Premises to Cloud? No problem, both are handled the same way. Want to have hibrid cloud with spillover? again, no problem, your Cloud Sw APIs and infrastructure work the same.

Want competing providers? No problem, in OpenStack there are competitors aplenty, and with Asure, while the SW is ultimately developed by Microsoft alone, there are plenty of channel/partners to set up your public cloud or private one.

Want your cloud no to be in the USoA under control of a USoA company, no problem with Asure or OpenStack.... with Amazon or Google: You are SooL.

So, if you are a sysadmin in a Waltmart provider, use this golden opportunity to justify to the CxO Suite (and justify plenty of funding for) a project to migrate from AWS (or Google) to some OpenStack or Asure Provider...

Best of luck and all the power to you!

Re:Actually, getting out of AWS is good advice

[williamyf]

Then go to OpenStack and be happy... (I pitched OpenStack as well, in case you did not notice).

As a matter of fact, I am a Technical trainer for, among other things, OpenStack (also, storage and servers), so, it behooves me if everyone getting out of AWS or GoogleCloud goes to OpenStack (more work, more £€¥$)...

So, no astroturfing. Just Honest opinion, I'd love evryone to go form AWS or GoogleCloud to OpenStack instead of Asure, but the reality is that not everyone can do so, or will do so

Re:I've never shopped there

[Oswald McWeany]

They sell Crisco routers and Sonny televisions.

My Crisco router got fried.

Companies aren't looking before they leap

[zerofoo]

Companies need to be very careful about what data is being stored in someone else's datacenter.

I'm sure if enough of Walmart's suppliers store enough data in AWS, Amazon could get some tremendous insights into Walmart's supply chain.

In my opinion too many companies have rushed to the cloud and have not completely thought out the repercussions of that choice. If your data is stored in AWS or Azure is it really your data? What if the Government decides to subpoena your data and your company decides to fight the subpoena, but Amazon decides it isn't worth the trouble - and they hand over your data?

The day of reckoning is coming for cloud services and it won't be technical that brings the pain - it will be legal.

Re:Companies aren't looking before they leap

[EvilAlphonso]

The cloud provider has complete access to the hypervisor, and still could access the data in memory even if it is encrypted at-rest and in-flight. If their hardware platform uses Intel's AMT or the AMD's PSP, a third party could do the same remotely. Colocated VMs could also reach the data through either VM escape or cache-based jamming agreement.

You are correct that the pain will be legal, even tho not for the cloud provider(s) but for their customers. I'm not sure about the regulation in the US, but in Europe I remain fully responsible for the confidentiality of my customer data even if I outsource the hosting to a cloud provider. And thanks to new regulation coming into force next year, my fines will be doubled if a leak happens through negligence... and deciding to host on a cloud with the issues of the previous paragraph can be construed as negligence.

Re:I've never shopped there

[Hognoxious]

Oh man, looks like the chips are down!

Re:Azure is MORE Secure?

[rahvin112]

You've misunderstood what the article about.

Walmart isn't requiring their Vendors to use Walmarts data and services, they are telling supplies (say of plastic bins) that they can't use Amazon's AWS services for anything including internal server backups or anything else. They are trying to leverage their massive purchasing power to use it against Amazon in another market.

Even if Walmart isn't a monpoly they should not be legally able to require suppliers to avoid all Amazon services including those completely unrelated to retailing as they are using their massive purchasing power as a leverage in outside markets. This is the halmark of what the Sherman anti-trust law tried to prevent, companies with massive leverage using that leverage to displace rivals in unrelated markets. AWS is an unrelated market to Walmart, they do not offer services in the web services market.

Contract terms requiring suppliers not use AWS for internal company services should be illegal as it's an attempt to leverage market share to harm a rival in an orthogonal market. These kind of actions dramatically harm the free market.

Re:Azure is MORE Secure?

[Zocalo]

Um, no - you need to read the quote in the summary more carefully. It's talking about technology companies that want to help run Walmart's IT services for them and, if they do, that "they can't run applications _for_ the retailer on Amazon's leading cloud-computing service". That's pretty clearly discussing managed IT services being provided to Walmart, not tangible products being sold through them. Other than the dick move nature of it to lock out a competitor rather than on technical grounds, it does actually make sense as a practice and is perfectly legal in every single area around the globe I've dealt with tenders. It's called a mandated or preferred supplier list depending on how strict you want it to be and it's to ensure that when you go to tender the respondants are all going to propose a solution that is compatible with what you already have in place and won't require that you introduce new training and skill set requirements on your staff.

Get off Amazon's cloud?

[Trogre]

Or "Satya just gave me a very nice yacht".