What does the ongoing cloud battle mean to retail?

Discussion
Mar 21, 2016
Tom Ryan

Google has reportedly won some of Apple’s massive spending on cloud services in what many saw as a potential blow to the data storage leader, Amazon.

The news of Apple’s use of Google’s cloud service was first reported by CRN, a publication for technology resellers, and confirmed by other reports, but not by the companies involved.

Amazon Web Services (AWS) has a leading 30 percent share of the $26 billion business of data-storage rental and computing capacity. Microsoft’s Azure service is a distant second, while the Google Cloud Platform is third with less than a five percent share.

But Google is seen as one of the few companies with a global network of data centers and networking capacity to rival AWS and its moves to lower prices and make big hires is helping the company gain traction in the space.

Apple has been using AWS to store its iCloud data, including backed-up photos and messages, since 2012, along with Microsoft. Google could eventually take up half the business, according to The Wall Street Journal. Last month, Google Cloud Platform scored another win when it
reached an agreement to take over the core computing infrastructure of Spotify, although the music streaming service’s music files will still be hosted on AWS. Amazon also lost ground last week when Dropbox revealed that it moved large parts of its U.S. storage business in-house.

For Apple, the reason for the shift was uncertain. Many saw the decision as a way to diversify the company’s cloud partners as Amazon has been competing more with Apple’s consumer products and tech services. The move could push prices lower and be a safeguard against outages on a single vendor.

Apple could also be seeking out specific services on the Google cloud, such as its BigQuery data analytics platform. Finally, Apple is building its own data centers and it’s not clear whether it plans to eventually take all its data in-house or wants a diverse data storage infrastructure.

DISCUSSION QUESTIONS: Should retailers welcome Google as a viable competitor to Amazon in the cloud computing space? What would be the best/worst case scenario for retailers in how the competition around data storage plays out?

Braintrust
"Imagine the invaluable data that exists on shoppers and their behavior in the Amazon data centers! I’m sure there are agreements in place to protect this data but in the end, there is simply no honor among thieves."
"The use of cloud computing in retail is in the early stages, with many companies determining their use cases. Many companies are still developing their strategies. In the case of Google, clearly taking share from the market leader is a good thing!"
"We are moving towards commoditized cloud, that is, broadly equivalent capabilities being offered by all the providers competing on price. Cloud platforms are easy to compare and becoming easier to migrate between."

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13 Comments on "What does the ongoing cloud battle mean to retail?"

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Joel Rubinson
Guest
1 year 8 months ago

This has been a HUGE money maker for Amazon so why shouldn’t Google go after this more aggressively? Google could also enrich the data for shopper targeting purposes so why not welcome in competition?

Ralph Jacobson
Guest
1 year 8 months ago

Cloud computing is still evolving and more entrants to the market are offering competitive services. Retailers need to assess their true needs, and that most often requires objective, external assistance from someone who has seen a variety of cloud environments around the globe in multiple industries. Many best practices are completely transferable to the retail industry, by the way.

Depending upon their defined needs, retailers can migrate to a prescribed cloud environment in small steps to ensure smooth operations and successful implementation throughout the process.

Peter Charness
Guest
1 year 8 months ago

Competition is a wonderful market price regulator. IT keeps innovation rolling and pricing aggressive. In this case chances are that the most recent cloud data center deployed will be the most cost effective due to the rapid pace of acquiring newer technology at lower prices.

Max Goldberg
Guest
1 year 8 months ago

Competition is good, especially when a new competitor is as large and renowned as Google. Cloud storage is still a nascent business. With big companies like Amazon, Microsoft and now Google getting involved, it should drive down prices and increase offerings for current and potential customers — something retailers should welcome.

Adrian Weidmann
Guest
1 year 8 months ago

As Amazon is in fact the leading retailing competitor to almost every retailer, there is an obvious conflict of objectives. If I were Target, Walmart, Lowe’s or any major retailer, I would avoid supporting and/or using the Amazon infrastructure! Imagine the invaluable data that exists on shoppers and their behavior in the Amazon data centers! I’m sure there are agreements in place to protect this data but in the end there is simply no honor among thieves. Google at least represents some differentiation at this point whereas Amazon is a direct retailing competitor.

Patricia Vekich Waldron
Guest
Patricia Vekich Waldron
1 year 8 months ago

The use of cloud computing in retail is in the early stages, with many companies determining their use cases, i.e.: infrastructure, rapid development, data storage and integration. Many companies are still developing their strategies.

In the case of Google, clearly taking share from the market leader is a good thing!

Michael Day
Guest
1 year 8 months ago
I believe that Adrian’s point regarding possible hesitation by leading retailers to partner with AWS at the very same time the Amazon mothership continues to dis-intermediate retail shopping and gain shopper spend market share, etc. is real. Google could be well served by positioning themselves to build on that specific marketplace dynamic, etc. At the end of the day, the company that can best position themselves and their cloud solutions to better operationally enable the retail CTA in this transformational time, and that can truly help enable retailers to leverage the data and manage the technology to do what they… Read more »
Lee Kent
Guest
1 year 8 months ago

Yes, retailers should welcome Google with open arms! I too am hesitant of jumping on the Amazon bandwagon, a major competitor. I sure wouldn’t want them to have access to my data. Nuff said!

My 2 cents goes to Google!

Tom Redd
Guest
1 year 8 months ago
Mike Day at Teradata has a few pieces right. He must listen to Koehler. :>) Simple answer — the integration of all retail elements, from people to inventory to channels, should be a key role in how retailers decide on their platform infrastructure. That may be cloud driving the many versions of “SaaS.” With the data a key is how the data is stored in the cloud and the speed of access and how “close” to critical calculation functions the data is. Speed is about the medium, bandwidths, storage style, and distance of data and calculations that are performed on the… Read more »
William Hogben
Guest
1 year 8 months ago

We are moving towards commoditized cloud — that is broadly equivalent capabilities being offered by all the providers competing on price. Cloud platforms are easy to compare and becoming easier to migrate between.

This news has no bearing on retailers, except as another reminder that if Apple, of all companies, is willing to put their products on Microsoft and Google clouds then retailers can abandon their last fears about using a cloud and start enjoying the power, cost savings and performance improvements they vetting.

Vahe Katros
Guest
1 year 8 months ago

Access to CPU cycles on demand make the cloud a great resource for huuuge ad-hoc queries — add to that Google’s strength in machine learning and AI and the word is that AWS might lose the next round of the clouds value — the PhD wars. The other commoditized activities are price related, but not strategic. Data storage is tactical.

Ken Morris
Guest
1 year 8 months ago
Competition in the cloud computing space is good for retailers, as they will benefit with more choices and lower prices. The decision to move applications and data to the cloud is driven by the desire to reduce costs and make data available in real-time across all retail channels (Store, Web, Mobile and Call Center). With lower prices, the move to the cloud will become more attractive. Many of our retail clients are currently evaluating the business case to move to the cloud, as they are not in the business of creating software — they are focused on selling products. With a… Read more »
Naomi K. Shapiro
Guest
Naomi K. Shapiro
1 year 8 months ago

There’s plenty of room in the cloud for greater competition. In fact, I give the grade of “A” to all those who said it’s better to have Google as your designated cloud cover than Amazon, which, in my opinion, has gotten too big, too far reaching, too megalomaniacal, and too able to access other’s data, whether the cloud service is part of the same company or not. This is my personal opinion and does not reflect any input or position of my company.

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Braintrust
"Imagine the invaluable data that exists on shoppers and their behavior in the Amazon data centers! I’m sure there are agreements in place to protect this data but in the end, there is simply no honor among thieves."
"The use of cloud computing in retail is in the early stages, with many companies determining their use cases. Many companies are still developing their strategies. In the case of Google, clearly taking share from the market leader is a good thing!"
"We are moving towards commoditized cloud, that is, broadly equivalent capabilities being offered by all the providers competing on price. Cloud platforms are easy to compare and becoming easier to migrate between."

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