Walmart Telling Some Vendors To Stop Using Amazon’s Web Services

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You may not know it, but a large number of websites use Amazon Web Services cloud servers to host their online content. Even though Walmart doesn’t offer anything that competes with this aspect of Amazon’s business, the retailer apparently dislikes the online giant so much that it doesn’t want its tech vendors supporting Amazon by using AWS.

The Wall Street Journal reports that Walmart has is asking these vendors to not use AWS and instead shift their computing and storage needs to competing services like Microsoft’s Azure.

A rep for Walmart confirmed to the Journal that it has made this request of a “small number” of companies.

“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.

Developers, even ones who are subcontracted out by Walmart vendors, tell the WSJ that they were told to build their projects specifically for Azure or not get the Walmart business.

“That was a deal breaker,” one developer explains. “Everybody knows that Walmart will not play ball with you if you use AWS.”

A rep for Amazon pointed out that AWS is used by a number of companies that compete directly with the e-tailer, including GameStop. The company accuses Walmart of trying to bully its vendors.
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UPDATE: Amazon has provided Consumerist with its full statement on this matter:
“Yes, we’ve heard that Walmart continues to try to bully their suppliers into not using AWS because they have an incorrect view that AWS is somehow supporting Amazon’s Retail business, which in North America generated more than $2.3 billion of operating profit in the last 12 months despite investing billions of dollars in initiatives, including Prime Video and Alexa devices and services. ‎Plenty of suppliers are standing up to Walmart and refusing to be told that they can’t use the leading‎ infrastructure technology platform (AWS). Tactics like this are bad for business and customers and rarely carry the day.”
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While Walmart doesn’t compete with Amazon in the cloud storage space, keeping business away from AWS would hit Amazon squarely in one of the few places where the company makes a large profit. AWS is only about 10% of Amazon’s total revenue, but it’s increasing in size and has a significantly higher profit margin than the discounted consumer goods that Amazon sells through its flagship website.

Of course, Amazon has gone directly for Walmart’s bread and butter — literally — with the announcement this week that it will acquire Whole Foods for $13.7 billion, in a move intended to bolster Amazon’s Prime Pantry and AmazonFresh food delivery services, possibly peeling away customers from Walmart and other supermarket chains.

(Updated to include full statement from Amazon)