Walmart Challenging Amazon By Building Huge In-House Cloud Servers

Six giant server farms where each one is bigger than ten football fields is among the best chances that Walmart has at challenging Amazon.com.

Walmart had expended millions of dollars and expended resources for five years to construct these facilities and the company has begun to reap the benefits from them. in the last three quarters, the online sales of the largest retailer of the world has grown at rates that are far above the industry average.

At the core of this growth is the ability of the company to analyze virtually limitless amounts of customer data in-house with the help of thousands of the proprietary servers.

Most retailers make use of rented servers for storage, maintenance and analysis of such formation. However, it is clear that Walmart wants to bite a bigger share of the online shopping market accentuated by the company expending huge amounts of money to build up its own internal cloud network. This is partly similar to the use of cloud-powered big data for enhancing digital sale pursued by Amazon.

Walmart has been able to closely control key business activities like inventory and has been able to match Amazon in terms of pricing by these efforts. The company is also being able to enhance services, make more customized offers and create very targeted digital promotional campaigns by this effort.

“It has made a big difference to how fast we can grow our e-commerce business,” said Tim Kimmet, head of cloud operations for Walmart.

For example, products that are frequently ordered by customers with the help of voice shopping devices such as Google Home is being stocked more thanks to the could data service, he said.

The in-store operations of the company are also being enhanced due to the network.

The process of customers returning products purchased online to the local stores has been made faster by 60 per cent with the help of data generated from millions of transactions. Additionally, prices across entire regions can be adjusted instantly at the physical locations of the stores.

“We are now able to execute change faster,” Jeremy King, Walmart’s chief technology officer, said.

Despite these efforts, according to digital research firm eMarketer, only about 43.5 per cent of the e-commerce market in the U.S. is accounted for by Amazon while only about 3.6 per cent belongs to Walmart, the largest brick and mortar retailer in the world.

In recent years, the could based analysis system is being put to use by large corporate to take decisions about the shopping habits of customers and therefore the investment of Walmart in the cloud services assumes significance.

“The battle between Walmart and Amazon has been playing out on all fronts and the cloud is the latest frontier,” said Kerry Liu, chief executive of Rubikloud Technologies. This company offers artificial intelligence-based technology to retailers.

(Adapted from CNBC.com)

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