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

Posted by msmash on from the tussle-continues dept.

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.

18 of 173 comments (clear)

  1. Shock Horror! by hackel · · Score: 5, Insightful

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

    1. Re:Shock Horror! by TWX · · Score: 3, Insightful

      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.

      --
      Do not look into laser with remaining eye.
    2. Re:Shock Horror! by FooAtWFU · · Score: 5, Insightful

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

      --
      The World Wide Web is dying. Soon, we shall have only the Internet.
    3. Re:Shock Horror! by Anonymous Coward · · Score: 3, Interesting

      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.

    4. Re:Shock Horror! by voislav98 · · Score: 4, Interesting

      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.

    5. Re: Shock Horror! by SteveHulett · · Score: 5, Interesting

      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.

    6. Re:Shock Horror! by Insanity+Defense · · Score: 3, Insightful

      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.

    7. Re:Shock Horror! by ShanghaiBill · · Score: 4, Informative

      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.

    8. Re: Shock Horror! by ShanghaiBill · · Score: 4, Insightful

      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.

    9. Re: Shock Horror! by 0100010001010011 · · Score: 3, Insightful

      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.

  2. Lawsuit in 3, 2, 1... by 3vi1 · · Score: 3, Funny

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

  3. Re:Azure is MORE Secure? by Zocalo · · Score: 3, Interesting

    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.

    --
    UNIX? They're not even circumcised! Savages!
  4. Re:I've never shopped there by Oswald+McWeany · · Score: 4, Funny

    They sell Crisco routers and Sonny televisions.

    My Crisco router got fried.

    --
    "That's the way to do it" - Punch
  5. Companies aren't looking before they leap by zerofoo · · Score: 5, Insightful

    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.

    1. Re:Companies aren't looking before they leap by EvilAlphonso · · Score: 3, Interesting

      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.

  6. Re:I've never shopped there by Hognoxious · · Score: 4, Funny

    Oh man, looks like the chips are down!

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  7. Re: Fuck Walmart by RabidReindeer · · Score: 4, Insightful

    covfefe

  8. Re:Azure is MORE Secure? by rahvin112 · · Score: 5, Informative

    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.