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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.

11 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 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.
    2. 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.

    3. 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.

    4. 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.

    5. 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.

  2. 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
  3. 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.

  4. 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."
  5. Re: Fuck Walmart by RabidReindeer · · Score: 4, Insightful

    covfefe

  6. 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.