Kroger joins Retail Giants in ignoring Amazon Rivalry over AWS

Amazon.com’s ecommerce business is growing rapidly, and its Amazon Web Services (AWS), cloud business is feeling the brunt its competition with other retail giants.
CNBC reported this week, that Kroger, the grocery giant, has chosen to partner with AWS rivals Microsoft Azure (GCP), and Google Cloud Platform(GCP) in order to avoid Amazon.com.
Chris Hjelm, Kroger’s Chief Information Officer, stated to CNBC that Kroger still runs its majority of its workloads on-premises. However, it has a cloud budget of millions of dollars and plans to split it between Azure or GCP. Both of these companies have been Kroger partners since the late 2016. Hjelm stated that Kroger uses AWS only minimally through acquisitions of companies, but that the company does not plan to deepen its relationship with AWS.
Hjelm stated that “for obvious reasons competitively it doesn’t make a lot of sense for us to help grow that company for them,” CNBC quoted Hjelm saying.
This is doubly true now that Amazon.com officially acquired Whole Foods, a high end grocery chain and competitor to Kroger. (Interestingly, Whole Foods was a well-known Azure customer before its acquisition by Amazon.com. However, that partnership will be a distant memory for AWS in the future.
Amazon.com is also rumored to be considering expanding into the pharmacy market. According to the St. Louis Post-Dispatch, Amazon.com may be aiming to become a wholesale distributor of pharmaceuticals. If true, this would place Amazon.com once more in the same competitive position as Kroger, which has over 2,000 pharmacies within its stores.
Kroger isn’t the only retailer to reject AWS due to Amazon.com’s competition. Wal-Mart, the world’s largest retailer, told its IT partners to use alternative AWS services or risk losing Wal-Mart. Target is also believed to be moving the majority of its cloud-based workloads and applications off of AWS.
AWS’ bottom line is not being affected by this competitive maneuvering, at least not yet. Amazon.com’s most recent earnings report showed that AWS had earned $4.6 billion in revenue, a 42 percent increase year-over-year.
While AWS’ growth is slowing, especially in comparison to Azure and GCP which both work from a smaller base, AWS remains the top cloud provider by an impressive margin. Recent data shows that AWS holds a global market share of 40 percent. This is more than all five of its closest competitors combined.

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