Tuesday, February 20, 2018

Walmart Builds Giant Private Cloud to Take on Amazon

Walmart knows that to win big, it has to bet big as well. In its multibillion-dollar battle against online retailer rival Amazon, brick-and-mortar giant Walmart made a big bet in upgrading the technology behind is operations which include putting up with the world biggest private cloud. And it seems to be paying off.

In order to effectively compete against Amazon on its turf, Walmart made multi-million dollar investments in cloud computing putting up six giant server farms which took nearly five years to complete, obviously mimicking its rival’s model. But the bold move worked. For the past three quarters, online sales have continued to surge. In fact, the company’s online revenue surged by 50 percent year-over-year during the third quarter of 2017, its strongest quarterly growth since 2009.

Being the world’s largest brick and mortar retailer, Walmart is a relatively new entrant to the eCommerce segment. At the moment, its 3.6 percent market share of the U.S. eCommerce pie is significantly smaller than Amazon’s 43.5 percent share. Obviously, it has a lot of catching up to do and that includes in the cloud computing arena.

"The battle between Walmart and Amazon has been playing out on all fronts and the cloud is the latest frontier," Rubikloud Technologies CEO Kerry Liu explained. His firm specializes in artificial intelligence technology services to retailers.

Walmart’s decision to build its own private cloud has helped it maintain its competitiveness against Amazon in terms of pricing. In addition, the tech upgrades also enabled the company to exert a tighter control on key functions such as inventory and even streamlining its services.

"It has made a big difference to how fast we can grow our eCommerce business," Walmart’s head of cloud operations Tim Kimmet confirmed. Of course, maintaining its own private cloud is critical to any company engaged in retail, an industry that is currently in a constant state of flux where data-based decisions are ever more important to take advantage of emerging shopping trends.

The battle between the two titans is bound to get even more exciting in the future. While Walmart has utilized its private could to help grow its eCommerce business, odds are it may use it to do more.

In fact, there are predictions that Walmart may have plans on going beyond retail. With a massive cloud infrastructure in place, does the brick-and-mortar retailer plan on directly challenging Amazon’s cloud computing business as well?

[Featured image via Walmart]

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