Walmart is Asking Providers to Avoid Storing Information in AWS, but is that a Right Decision?

Posted by Augusto Alvarez on July 21, 2017

As a result of the recent major buyout from Amazon to Whole Foods, Walmart has recently asked their vendors and providers to not use Amazon Web Services (AWS) for hosting any of the Walmart data or even transactions. Adding to that recommendation, Walmart has been recommending to these providers to use Microsoft Azure instead. But is that a right decision to protect their information?

Walmart, Amazon, Azure logo

The recent acquisition from Amazon of Whole Foods does not represent the first time Walmart sees in Amazon a large competitor. The biggest online store has represented a major risk for Walmart for some time now, services like Amazon Prime Now that can deliver groceries within the same day changed the concept of going out for grocery shopping. But we can certainly assume that the Whole Foods operations finally triggered this request.

photo of Whole Foods store

Some will remember that Walmart made in 2015 an attempt to compete with Amazon Prime offering their own subscription method to deliver a free 2-day shipping: ShippingPass at a $49 yearly rate ($50 cheaper than Amazon Prime). But the product failed, it was canceled in January 2017, now Walmart offers free shipping on any orders over $35 and the 2-day shipping applies only to certain products.

Regarding the recent Amazon issue, a Walmart spokesperson said that although some suppliers do use AWS services, in some cases it is “wary of putting sensitive data on a competitor’s servers,” according to Fortune. Also, the Walmart representatives added: “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.”

In this world where cloud technologies are taking most of the market in a direct or indirect way, seems a tough decision for Walmart to ask all their vendors to move AWS out of the equation. Microsoft and Amazon are indisputably the strongest two cloud vendors available in the market, with the Redmond-based company taking more and more the market share and preference from SMB and Enterprises

Logo - Microsoft Azure versus Amazon Web Services

AWS has strong and very clear agreements related to data security and confidentiality, it would be a catastrophe and billion dollars in lawsuits if someone discovers that Amazon did some kind of data mining in their own AWS servers to obtain Walmart data.

Having said that, we can understand some of the concerns mentioned by Walmart representatives. Walmart has thousands of business units and departments answering for different parts of the company, I’m pretty sure no person wants to be the one responsible of making critical data available to one of their stronger competitors.


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