Everyone knows that Amazon dominates the cloud services market. But there’s a trend rising in one vital sector that has largely gone unnoticed. This involves major retailers choosing alternatives to Amazon Web Services (AWS) such as Google Cloud and Azure. Big-name retailers, in verticals from clothing to electronics, are moving away from maintaining their own data centers in favor of the public cloud’s agility and better access to customers worldwide. To highlight a few:
Walmart teamed up with Microsoft on a five-year contract back in July. The partnership, promising to “further accelerate digital innovation in retail,” was a natural fit since Microsoft was already partnered with Walmart, handling significant workloads, apps, and teaming up their engineers.
Furthermore, in a move directly targeting Amazon, Walmart has asked their tech vendors to choose alternatives to AWS. Wal-Mart spokesman Dan Toporek told CNBC: “Our vendors have the choice of using any cloud provider that meets their needs and their customers’ needs. 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.”
Target, another retail competitor of Amazon, decided to stop using its rival’s cloud in mid-2017 and began dropping down their use of AWS. Microsoft, Google, and Oracle all pushed for their business as discussions were kept quiet, with a Target spokesperson only admitting that they use multiple clouds. Earlier this year, Google CEO Sundar Pichai confirmed Target as a big cloud customer.
Gap Inc. signed a five-year contract with Microsoft, choosing Azure as their primary cloud provider. Employees will also be using Microsoft 365 tools and the Enterprise Mobility and Security suite. They chose Azure to support their e-commerce operations, inventory, and workforce systems.
Gap chose Azure because they wanted “a partner that is not going to be a competitor […] in any other parts of their businesses,” as told by Shelley Bransten, corporate VP for global retail and consumer goods at Microsoft.
Supermarket and retail giant Kroger took a multi-cloud approach, first with Pivotal and Microsoft, and later adding on Google Cloud in 2017. In a CNBC interview, Chris Hjelm, Kroger’s chief information officer, explains why the retailer spends millions of dollars on Microsoft and Google in order to avoid AWS: “For obvious reasons competitively, it doesn’t make sense for us to do a ton to help grow that business for them.”
And this is only a partial list. In addition to the ones mentioned above, Spotify, eBay, Best Buy, and L.L.Bean all turned to Google to meet their cloud needs. One by one, big retailers with recognized names are choosing Microsoft and Google in favor of Amazon.
Why Retailers Choose Alternatives to AWS
Cloud migration requires a massive haul of data, costs, and time from a business. Not only is there a lot to consider in terms of pricing, services, and overall offerings, but there are also certain needs unique to a specific industry. Big retailers turning away from AWS and onto other cloud providers highlights an issue for Amazon as a competitor in the retail industry, providing opportunities for other providers like Microsoft and Google to secure enterprise deals.
Meanwhile, not everyone has chosen AWS alternatives. Amazon still holds the market lead and continues to retain a footprint in the retail industry with customers including Nordstrom, Nike, Under Armour, and Lululemon. So, while the evidence suggests that more retailers are looking for other options outside of AWS, time will tell if Amazon can hold the top spot among retailers.
Jay Chapel is CEO of ParkMyCloud