The competition between Amazon Web Services (AWS) and a host of brick and mortar retailers reached a new intensity this week that could significantly impact managed services providers (MSPs) who partner with the market leader in public cloud, or with second place Microsoft Azure.

On the heels of Amazon’s announcement last week that it planned to acquire grocer Whole Foods Market, retail giant Wal-Mart revealed it has been asking some of its vendors, developers and other tech partners to no longer host applications on AWS, the Wall Street Journal reported.

In one example, Snowflake Computing Inc., a provider of big data management services, said it opted to host applications on Microsoft Azure instead of AWS, expressly to win business from a tech firm with a Wal-Mart account.

Snowflake said it was already developing an Azure offering, which it accelerated in order to capitalize on the opportunity.

“They influence their vendors, which has influence on us,” CEO Bob Muglia told the paper, speaking of Wal-Mart.
Wal-Mart spokesman Dan Toporek told the financial newspaper that the outreach was made to a “small number” of vendors and partners, but defended the move.

“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,” he said, according to the article.

An Amazon official described Wal-Mart’s moves as an attempt to “bully.”

“Tactics like this are bad for business and customers,” the unnamed spokeswoman is quoted as saying.

The pitched competition between Wal-Mart and the e-commerce giant has been well documented.

Also well documented is Wal-Mart’s close and growing ties to Azure cloud.

Wal-Mart is among Azure’s largest customers and was the primary provider of cloud infrastructure to e-commerce retailer Jet.com, which Wal-Mart bought for $3.3 billion last September.

Jet’s founder is now head of Wal-Mart’s e-commerce division. 

But some observers predict the rivalry’s latest escalation could negatively impact AWS partners that provide migration or managed services to clients with current or future business with Wal-Mart; while benefitting Microsoft partners.

“People jump though hoops to do business with Wal-Mart all the time,” Gartner analyst Robert Hetu told WSJ. “That should absolutely accelerate the competition from Azure.”

 

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