Amazon Steals Big Microsoft Customer With Whole Foods Purchase

Mitch Wagner
6/18/2017

Amazon is picking up one of competitor Microsoft's marquee customers with its $13.7 billion bid to buy retailer Whole Foods.

Whole Foods is looking to software-as-a-service (SaaS) from Microsoft on its path to growing from 462 stores to 1,200 in the near future, according to a November write-up on Microsoft's website (still available as of late Friday morning).

Whole Foods previously used Microsoft Active Directory in the Windows Server operating system to provide single sign-on identity credentials for the store's 20,000 information workers. As it transitioned to SaaS and wanted to bring on 71,000 store workers, Whole Foods switched to the cloud, to Microsoft Azure Active Directory Premium to manage employee identities.

Photo by ChadPerez49 (Own work) [CC BY-SA 4.0], via Wikimedia Commons
Photo by ChadPerez49 (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Whole Foods is also using Microsoft Office 365, and considering other cloud security offerings, Microsoft said in November.

Under new ownership, Whole Foods could move to Amazon Web Services Inc. (AWS) while still keeping Active Directory; AWS provides Active Directory support. Indeed, if the transition is fast and easy, Amazon would be able to brag about it in its marketing.

As for Office 365, AWS doesn't have a competitive offering -- at least not yet. It recently launched AWS Chime to compete with Skype for Business, and AWS WorkMail launched in 2015, competing with Office 365's email. However, AWS's office offerings lack the breadth of Office 365. (See Amazon Chime Targets Skype, WebEx and Lawyers Ring Amazon's Chimes – Lawsuit Charges Trademark Ripoff.)

That could change as Amazon is reportedly working on its own productivity suite.

Amazon announced Friday it plans to acquire the supermarket chain, giving the e-tailer a big footprint in brick-and-mortar retail.

Ironically, Amazon won a patent just two weeks ago on technology to block "showrooming" -- which is when you go into a store, see a product on the shelves you like, whip out your smartphone, and do a search to see if you can get a better deal elsewhere. Amazon's getting the patent then might have been a purely defensive move -- since people often showroom themselves right into an Amazon purchase. But the patent also covers technology that would redirect the consumer to the brick-and-mortar store's own website, or allow the brick-and-mortar retailer to make a better offer, so the technology could be useful in Amazon's new Whole Foods subsidiary (assuming the deal goes through).

Also, this tweet. (Warning: Mild adult language.)

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— 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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kq4ym
kq4ym
6/27/2017 | 9:58:38 AM
Re: Whole Foods
That might be an interesting tactic for Amazon, to pick off companies using competitive services, turning the giant into possibly a real threat to Google and Microsoft to stem their growing cloud businesses?
Ariella
Ariella
6/22/2017 | 5:35:07 PM
Re: Whole Foods
@Mitch, yes, the shoppers there are likely to be interested in higher end merchandise, particularly if it can be marketed as organic, healthier, or mor sustainable.
Mitch Wagner
Mitch Wagner
6/22/2017 | 5:31:03 PM
Re: Whole Foods
Amazon could do worse. Whole Foods has a large, loyal customer base willing to pay a premium for what they want. 
Ariella
Ariella
6/21/2017 | 10:29:13 AM
Whole Foods
You know, I've never shopped at Whole Foods. Food is expensive enough even at stores no notorious for high prices. But I'm sure the Amazon has done its homework about this and the target market it would gain from the purchase.
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