News

Whole Foods Deal Adds New Layer to AWS-Azure Rivalry

• By Jeffrey Schwartz
• 06/23/2017

Amazon.com's pending $13.7 billion acquisition of Whole Foods promises to impact not just the grocery and retail industries, but also the cloud computing market, in which Amazon Web Services (AWS) and Microsoft Azure are the runaway leaders.

Among the field of cloud platform providers, AWS and Azure are considered to have the largest infrastructure service portfolios, datacenter footprints and market shares, according to Gartner's latest annual Magic Quadrant Report. Whole Foods, which has 462 high-end grocery stores throughout North America and Europe, is a key customer of Azure. According to a November case study on Microsoft's Web site, Whole Foods had signed on to a five-year plan to move all of its infrastructure and software to a SaaS model running in Azure.

In fact, according to the case study, Whole Foods has already deployed Microsoft's Enterprise Mobility + Security (EMS) service and migrated 91,000 employees from Active Directory running on-premises to Azure AD Premium, which gives all of them single sign-on access to 30 SaaS applications.

Should the Amazon.com acquisition go through, however, the role of Azure at Whole Foods will likely diminish.

Meanwhile, Amazon.com's most formidable rival in the retail industry, Wal-Mart, has told IT providers that if they want Wal-Mart's business, they can't use solutions dependent on AWS, according to a Wall Street Journal report this week (available here with subscription).

While Wal-Mart keeps the bulk of its data on-premises, it does use Azure and other providers to run some cloud-based services. According to the WSJ report, Wal-Mart acknowledged that it has occasionally pushed its partners to use alternatives to AWS. Amazon.com reportedly responded that such requests amounted to bullying and are bad for business.

One partner that Wal-Mart reportedly approached is cloud service provider Snowflake Computing, but CEO Bob Muglia said that Snowflake's data warehousing service currently only runs in AWS. However, in an interview late last year, Muglia did not rule out using Azure and other clouds in the future, if there's a business case to do so. At that time, it didn't appear to be a priority.

Notably, Muglia is a former longtime Microsoft executive who had been president of the company's server and tools business, and was on the team that launched Azure back in 2010.