Wal-Mart’s AWS threat: ‘Pick that cloud, lose our business’—what to do

Here’s a shocker: Wal-Mart is telling some technology companies that if they want Wal-Mart’s business, they can’t use Amazon Web Services. (Wal-Mart says it simply doesn’t want customers storing Wal-Mart’s sensitive info on AWS.) That’s a tall order for technology companies that may have invested millions in their tech running on AWS.

However, if you see it from Wal-Mart’s point of view, Amazon.com’s retail business is costing it billions a year in lost sales, so why not fight back by reducing Amazon’s AWS income from not just Wal-Mart but Wal-Mart’s customers? After all, Amazon.com refuses to sell products from Apple and Google that compete with its own streaming devices and services.

The larger lesson here for enterprises is that can politics be part of the price of your choice of public cloud . You’ll find that both existing and potential customers are concerned about the platform you use, including your selection of AWS, Microsoft, or Google as your cloud provider.

All three major cloud providers have businesses that compete with other companies outside the cloud platform business. Amazon.com, for example, competes with pretty much any retailer. But it’s not just direct competition that open up business conflicts. I’ve seen companies push back on Google due to Google’s extensive data collection practices, and I’ve seen companies push back on Microsoft due to issues with Microsoft’s enterprise software licenses.

The potential political conflicts are particularly acute if you’re a technology-driven company – and who isn’t these days? – and need to pick a cloud as your platform. Or you’ve already picked one, and now its owner is in conflict with a key customer and wants you to end that established, expensive relationship.

You of course want to pick a public cloud provider based on how its capabilities match up with your requirements and budget. Having to worry about losing revenue from a partner or customer because of that choice shouldn’t be a concern – but it increasingly is. In fact, I’m seeing clauses in contracts these days that specify “no-fly clouds,” where enterprises don’t want their data stored. They have nothing to do with the technology; it’s all perception, including risk, and, yes, spite.

Smaller enterprises, such as those doing business with Wal-Mart, are going to feel the brunt of this. They simply have less leverage, so they can more easily be bullied.

One constructive recommendation I can make is to work the multicloud angle. I’ve repeatedly recommended a multicloud strategy to gain redundancy and resiliency, but another benefit is that defuses the politics you haven’t chosen sides) and makes any imposed migrations easier to accomplish.


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