Walmart was never going to bet its infrastructure on Amazon Web Services (AWS), given the fierce retail rivalry between the two. As such, it's not surprising to see Walmart inking a five-year deal with Microsoft Azure. Indeed, Microsoft CEO Satya Nadella said as much in an interview with the Wall Street Journal, declaring that the Amazon rivalry "is absolutely core" to the partnership.
What is surprising, however, is that Walmart is betting on a public cloud vendor at all, given years of heavy investments in trying to build its own cloud.
It's not you, it's me
To be clear, there's nothing wrong with betting on Azure. As Microsoft revealed in its recent earnings call, the company is seeing a swelling number of "tier-one workloads" moving to Azure, with "commitments being made by some of the biggest brands." Though the company offered scant details, the company did say Azure revenue has grown 89% year over year, while noting it had doubled the number of $10 million deals.
Clearly, Microsoft is cementing its place as the industry's strong second in the cloud.
SEE: Cloud computing policy (Tech Pro Research)
At the same time, Walmart has made no secret of its disdain for AWS, going so far as to dictate to its technology providers that they not run their services on AWS. While Walmart's preferences aren't cutting heavily into AWS' business, "The nudge from Walmart has been pretty consistent," putting pressure on suppliers to try alternatives like Azure, said Judson Althoff, Microsoft executive vice president.
In sum, Microsoft is a safe bet for a company like Walmart that can't stand AWS because of its affiliation with Amazon. What is less clear is why it sees the need to bet on any cloud other than its own.
Get off of my cloud
Walmart, after all, moved its entire ecommerce stack to OpenStack back in 2014. Whenever OpenStack critics (like me) have poked at its stalling momentum, OpenStack cheerleaders would point to Walmart as a serious success story. With Walmart now seeming to call off its OpenStack bet in favor of Microsoft Azure, is Walmart sounding a death knell for quixotic private cloud efforts?
"In no way does this take away from the work we've done [with OpenStack]," a Walmart spokesperson said in a TechTarget report. "Clearly we've invested a lot there from a time and financial perspective."
Yes, and the company has been quite proud of its private cloud. This is the Walmart that hailed its "six giant server farms, each larger than ten football fields." The same Walmart that hoped to build the world's largest cloud-based database.
SEE: Multicloud: The smart person's guide (TechRepublic)
The same Walmart that is now betting big on Azure.
Of course, the two needn't be in (much) conflict. As Pivotal's Richard Seroter pointed out to me on Twitter, Walmart's Azure decision sounds like "lots of data analytics and ML for cloud workloads, and probably tons of internal apps and supply chain things on private cloud." Even if this weren't the case, and Walmart had decided to push 100% for public cloud, "[I]t'd take what, a decade?" he continued.
Indeed. Private cloud may be dead, but it's going to take a long, long time for anyone at Walmart (or elsewhere) to realize that dream of a perfectly public cloud.
So, yes, Walmart plans to have its Azure cake...and eat its private OpenStack cloud, too. That's the way enterprises work: Slowly.
- Special report: The cloud v. data center decision (free PDF) (TechRepublic)
- Walmart takes its Amazon battle to the clouds (ZDNet)
- Multicloud: The smart person's guide (TechRepublic)
- Amazon vs Walmart: It's on! (ZDNet)
- Walmart forces tech partners to leave AWS, following Whole Foods acquisition (TechRepublic)
Matt is currently head of the developer ecosystem at Adobe. The views expressed are his own, not those of his employer.
Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.