UPDATED 21:51 EDT / JUNE 21 2017

CLOUD

Report: Wal-Mart orders its developers not to use the Amazon cloud

Wal-Mart Stores Inc. is trying to hit back against Amazon.com Inc. following the e-commerce giant’s acquisition of Whole Foods Market Inc. last week.

Apparently feeling threatened by that deal, the retail giant has reportedly told its developer partners not to use Amazon Web Services Inc. to host their cloud applications. The Wall Street Journal first reported Wal-Mart’s new stance, saying it had asked its technology partners that develop or sell products at its stores not to use Amazon’s public cloud service.

Wal-Mart didn’t confirm or deny the report, but instead issued the following, rather vague statement to the press: “Our vendors have the choice of using any cloud provider that meets their needs and their customers’ needs,” Wal-Mart said. “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.”

However, the Journal reported that Wal-Mart was being a lot less flexible in private, telling developers in no uncertain terms that they should get their apps off of AWS and onto Microsoft Azure if they wanted to continue doing business with it.

Wal-Mart itself is a loyal customer of Microsoft Azure, and offers a number of developer tools for that platform. In light of Amazon’s announcement that it’s going to buy Whole Foods, it’s no surprise that Wal-Mart has decided to get tough. Amazon, with its online grocery stores, was already a competitor.

But the battle is about to intensify now that Amazon is about to get its hands on its own chain of brick-and-mortar grocery stores that compete with Wal-Mart’s. In the hours after the Whole Foods deal was announced, Wal-Mart saw its share price plunge by more than 7 percent.

“Retailers of all shapes and sizes have been getting progressively more terrified of Amazon, but up until now they’ve only tended to avoid using its e-commerce site as a sales channel or its fulfillment centers for rapid delivery,” said George Gilbert, big data and machine learning analyst at Wikibon, owned by the same company as SiliconANGLE. “More recently, retailers are steering clear of AWS too, especially now that Azure is a credible alternative.”

Gilbert added that he has recently been hearing rumors that Wal-Mart is pressuring its entire upstream supply chain to avoid AWS. “I don’t know how real that is or how effective it will be. But we’re seeing a potential concentration of economic power that we haven’t really seen since the rise of industrial giants in the early 20th century.”

For its part, Amazon said its rival was attempting to “bully” developers, adding that such tactics are “bad for business and customers.”

Image: Mike Mozart/Flickr

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