Amazon Says Walmart Bullies Vendors Off AWS Cloud

Mitch Wagner
6/22/2017
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This company started small, founded by a visionary entrepreneur, and grew to dominate and transform retail through technology. The company drove competitors out of business and made a profound mark on the global economy. Later, this company pioneered the cloud.

Amazon.com Inc. (Nasdaq: AMZN)? Yeah, them too. But the description is apt for Walmart. Founded in 1962 by Sam Walton, Walmart achieved global dominance by streamlining its supply chain, connecting with suppliers electronically. It currently runs most of its internal systems on a private cloud, making extensive use of OpenStack.

Nowadays, Walmart is in hot competition with Amazon. In the latest wrinkle, Walmart is pushing some of its vendors to find alternatives to Amazon Web Services, the Wall Street Journal reports.

A Walmart spokesman tells Enterprise Cloud News, "It shouldn't be a big surprise that there are cases in which we'd prefer our most sensitive data isn't sitting on a competitor's platform."

But Walmart has "no policy against using AWS for vendors," the spokesman said. "Our vendors have the choice of using any cloud provider that meets their needs and their customers' needs. "

AWS took the opportunity to trash-talk a competitor. "Yes, we've heard that Walmart continues to try to bully their suppliers into not using AWS because they have an incorrect view that AWS is somehow supporting Amazon's Retail business," a company spokesman said. "Plenty of suppliers are standing up to Walmart and refusing to be told that they can't use the leading‎ infrastructure technology platform (AWS). Tactics like this are bad for business and customers and rarely carry the day."

Competition between Walmart and Amazon is getting hotter, as Amazon is looking to buy Whole Foods, making a $13.7 billion bid. With that purchase, Amazon would acquire a retail chain with more than 400 locations, and the supply chain and customer base to go with it. It's a big push in groceries -- one of Walmart's strengths -- and could be expanded into other retail directions. And by the way Whole Foods is a showcase Microsoft cloud customer. (See Amazon Steals Big Microsoft Customer With Whole Foods Purchase.)

A JPMorgan analyst speculates Thursday that Walmart might put in a bid for Whole foods.

Walmart uses OpenStack aggressively for its own needs, with its entire e-commerce platform running on the open source software. (See OpenStack: Small Pond, but the Big Fish Love It.)

Walmart spoke at the OpenStack Summit in Barcelona in October, and talked about how it is transforming its company to embrace open source culture. (See How Walmart Builds Open Source Culture .)

Previously, the company open sourced its OneOps platform for managing cloud and application lifecycles, in early 2016. (See Walmart Puts Cloud Platform in Open Source.)

And it's not just Walmart -- Target also views open source as essential to its business. (See Target Looks to Open Source to Hit Bullseye.)

— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Visit my blog Friend me on Facebook Editor, Enterprise Cloud News

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Michelle
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Michelle,
User Rank: Light Sabre
6/30/2017 | 7:55:44 PM
Re: hmm...
I haven't looked into it, but I do wonder how Walmart ensures merchants are providing good service. I haven't ordered from a merchant on walmart myself...
maryam@impact
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[email protected],
User Rank: Light Sabre
6/30/2017 | 2:48:23 PM
Re: hmm...
Yes, it's staggering and the issue is can you manage all those merchants to the service level that doesn't negatively impact your brand!
Michelle
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Michelle,
User Rank: Light Sabre
6/29/2017 | 1:59:55 PM
Re: hmm...
VERY interesting! That does point to a lack of direction. They are trying to be more like Amazon with online sales -- have you seen how many merchants are selling on walmart.com?
maryam@impact
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[email protected],
User Rank: Light Sabre
6/29/2017 | 1:37:16 PM
Re: hmm...
Agreed Michelle but they seem to want to blur their image they were looking at selling high-end names like Patagonia online earlier this year. I am not sure that they have a crystallized strategy and understanding of their core consumer.
Michelle
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Michelle,
User Rank: Light Sabre
6/28/2017 | 1:57:38 PM
Re: hmm...
Yeah? I didn't realize. I'm sure there are plenty of other examples Walmart should consider before digging in on this one.
kq4ym
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kq4ym,
User Rank: Light Sabre
6/28/2017 | 12:47:55 PM
Re: hmm...
It does seem that Walmart does have a history of heavy handed dealing with it's vendors. Getting them in a room in Bentonville and explaining the facts of life to reps wanting to sell through Walmart has been written previously as a daunting experience as Walmart squeezes that last penny out of a deal with those vendors. So I would not be surprised of anti-AWS talk going on in those closed room discussions.
mhhfive
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mhhfive,
User Rank: Light Sabre
6/26/2017 | 11:08:33 PM
Re: hmm...
Even Apple has Samsung making iPhone components in a competitive bidding process!
Michelle
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Michelle,
User Rank: Light Sabre
6/26/2017 | 10:51:34 PM
Re: hmm...
@mhhfive I've thought a lot about the Netflix-AWS relationship. You make an excellent point about Walmart's unwillingness to work with AWS.
mhhfive
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mhhfive,
User Rank: Light Sabre
6/26/2017 | 8:04:17 PM
Re: hmm...
I think Walmart's heavy handedness may be misplaced. Netflix uses AWS for its datacenters, and Amazon is a direct competitor! Walmart should stick to the philosophy of getting things done as efficiently as possible -- even if it means using competitive services along the way.
danielcawrey
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danielcawrey,
User Rank: Light Sabre
6/26/2017 | 7:58:40 PM
Re: Walmart isn't interested in Whole Foods
This isn't really surprising. 

Walmart has long bullied suppliers. It's how the company has gotten to where it is. The problem with this approach is that this is much harder to do in technology. Suppliers often don't have choices. Technology companies have many more options at their disposal. 
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