That didn’t take long. The fight for our stomachs via the cloud has begun. Just days after Amazon swooped on Whole Foods, its rival retailer, Walmart, has told the tech companies which it does business with not to use Amazon’s Web Services, its cloud computing business.
You may not have heard of Amazon’s Web Services, but like most things Amazonian, the business is big. It is huge in computing power, online storage, security protection and develops tools for outside clients. They include Netflix, Airbnb, GE and the the CIA. According to Gartner, the research people, AWS has a 44% share of the market in hosting websites and cloud services and makes good money – earning about $3.7bn in sales in the last three months.
No wonder Walmart is so scared that companies it works with have been ordered to find alternatives to AWS. Understandably, Walmart doesn’t want its own sensitive data accessible to Amazon, now that they will be competitors in the online food market. It’s a sensitive time for Walmart, which for years has been trying to conquer e-commerce and recently invested in a stake in the giant Chinese online retailer, JD.com.
Walmart is not the only one ready to take on Amazon. Other big US retailers have also asked clients to stop using AWS.
As you would expect, Jeff Bezos, Amazon’s boss, is said to be spitting at Walmart’s daring, claiming the retailer and other rivals are attempting to bully tech companies into using competitor platforms such as Microsoft’s Azure – already used by Walmart – or Google’s cloud services.
But it’s time Bezos, who no doubt will also be spitting his views into the Washington Post ( which he owns) got a taste of his own bully boy tactics. Like Uber’s chief executive, Travis Kalanick, who was forced to step down this week after a series of embarrassments, Bezos likes to buy his way into new business streams. This may be short-term good news for the customer but it’s not so great for those whose business he is gobbling up.
As well as buying the Seattle based Whole Foods grocery stores for £10.8bn, Bezos has also done a deal with Nike to sell the sportswear makers’ shoes directly and is launching Prime Wardrobe, a new service that allows you to order clothes for seven days before deciding which to keep. Sounds like an old-style catalogue business to me.
Yet Amazon’s shares keep climbing into the clouds. They are close to $1,000 a piece and with a little more climbing, would value Amazon at $1 trillion, making it the world’s first trillion dollar company.
Unquestionably, Bezos has been brilliant at disrupting the books, music and film industries by offering customers speed and efficiency. This has come at the cost of destroying many small businesses. At heart, though, Amazon is best understood as a giant logistics company using new technologies. The business doesn’t create value or beauty. By going for our stomachs, buying Whole Foods and riling Walmart, Bezos may have bitten off more than he can chew. Hope so.