Walmart challenges Amazon, turns to proprietary cloud model
- Walmart is becoming a cloud giant in its own right, using its proprietary cloud to power operations and drive customer data analysis, according to a Reuters report. An effort that took five years to complete, the retailer now runs six server farms and 75 micro clouds and does not rely on a single third-party cloud service provider.
- The acres of cloud storage facilities help power Walmart's data operations, allow it to create more custom offers for customers and anticipate fulfillment needs, according to the report. Executives told Reuters the cloud and advanced data operations have helped grow the company's e-commerce business.
- The internal cloud makes it easier for Walmart to quickly execute change, according to Reuters. Walmart has the ability to make up to 170,000 adjustments to its website software each month, compared to 100 changes per month in the past.
Walmart did not build out a robust internal cloud network to rent out space to other businesses as Amazon's AWS does. Instead, the retailer built out its data center capabilities to better mine, analyze and protect consumer data.
By collecting data from online and in-store shoppers, Walmart can use Big Data analysis to anticipate customer needs and better target likely buyers. Combined with AI efforts and the shift to inject machine learning into everything, Walmart is able to understand the nuances of its customer base.
Not every organization is capable of building out a cloud network from scratch. The prohibitive infrastructure costs, the need for constant maintenance and the risk of crippling outages are just a few of many reasons why organizations across sectors have turned to cloud service providers.
By renting storage, companies can rely on vendors that are experts in the field, freeing up resources for other internal tech development.
But Walmart is trying to clip the competition and make sure it is not providing business to Amazon in any way. Walmart has, in the past, reportedly asked some vendors to avoid running applications on AWS to keep "sensitive data" off its competitor's servers. Kroger, too, has avoided AWS for cloud services.
While that is a potential boon for other CSPs, such as Microsoft and Google, Walmart's snub of AWS is unlikely to inspire fear in the cloud giant. AWS touts big names like Disney and the National Football League among its customers. And even though competitors are encroaching on its market stranglehold, AWS still boasts more than 30% of the IaaS market share.
Most companies have turned to service providers to more easily implement advanced technology. Walmart's strategy, however, is far more rare.
To maintain its efforts, the world's largest retailer has to ensure it maintains a tech workforce that can compete with those of the largest tech companies in the world, which is not an easy feat in light of the tech talent wars driving top dollar for Big Data and AI experts, among others.
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