Amazon Web Services has been the gold standard for cloud computing almost since its debut, but the relentless push of its corporate parent into nearly every sector of the economy is making some companies think twice about using the market leader’s services.
Kroger, the retail and grocery giant that operates brands like QFC and Fred Meyer, is spending money with AWS competitors Microsoft Azure and Google Cloud Platform as it drags its sprawling IT operation into the cloud, CIO Chris Hjlem told CNBC Tuesday. That cloud push started last year, before Amazon bought Whole Foods, but now that Amazon is directly competing with Kroger on multiple fronts all new cloud projects are going to Microsoft and Google.
“We feel like we’re not losing anything from a competitive perspective working with those companies,” Hjlem said. Some businesses Kroger has acquired use AWS for a few things and it maintains its own data centers for certain workloads, according to CNBC, but the grocer is putting its foot down when it comes to expanding its relationship with AWS.
Among retail companies that are watching Amazon drive a steamroller over their businesses, there’s a growing sentiment that there’s no reason to continue bankrolling that operation. AWS provides nearly all of the operating profit for the larger retail corporation, helping fund its (for now) money-losing international expansion and giving it cover with Wall Street.
Target is reportedly in the midst of a transition away from AWS, and Walmart is even pressuring its suppliers to use alternative cloud vendors. The moves don’t really seem to have affected AWS revenue, judging by the 42 percent jump it recorded during the third quarter, but they are certainly bolstering the competition.
That’s part of the reason why Amazon competitors can explore other cloud options: over the last few years Microsoft and Google have come a long way toward matching the breadth and depth of cloud services that AWS offers. Developers made AWS the cloud powerhouse that it is because they admired the quality of its tools, but if developers can be convinced that they aren’t losing capabilities or performance in switching for political reasons, the cloud market could look a little different by the end of the decade.
For its part, AWS doesn’t seem too worried, believing that it still offers the best services overall in the cloud. “Retailers’ end users don’t care about any rivalry that may exist with another retailer,” the company said in a statement provided to CNBC.
AWS has long insisted that it treats Amazon the same way it treats any other cloud customer. If that’s true — and I haven’t seen a reason to think otherwise — then the prospect of an independent AWS could start to make more and more sense if Amazon competitors defect for political reasons rather than technical ones.