I came across an interesting article on Geekwire today. In it, Kroger expresses that it is moving away from the AWS platform because of competitive concerns.
Kroger is a huge grocery store chain found in 34 of the 50 states in the US. I lived in Florida for the first 22 years of my life, which meant that “going to the grocery store” meant going to Publix. Books have been written about their unique philosophy
With Amazon recently purchasing Whole Foods, they are busy transforming the high end, fancy grocery store sometimes referred to as “Whole Paycheck” into a competitive cheaper grocery store. And also likely a different shopping experience (for a humorous read, check out “Surviving Whole Foods“) This means that Amazon is now competing in Kroger’s main business space, their “bread and butter”, if you’ll forgive the pun.
Kroger is concerned about two things. First, they don’t like the idea of giving money to a direct competitor competitor in their business. Second, they are concerned about having their data on a server that Amazon could potentially access. So Kroger has decided to start exploring options at Azure and Google Cloud for their cloud-based solutions, and are asking some of their suppliers to do the same.
Let’s look at industries that Amazon has entered and what has happened.
A History of the Bookseller
When I was in high school, I worked for a small independent bookseller known as “The Book Nook”. It was a tiny book store located in a Spanish-style plaza run by a nice lady name Marie as I recall. She was an avid reader and loved what she did, turning her bibliophile traits into a customer building success.
Then the new corporation Waldenbooks came into town, and opened in “The Mall”, as malls were trendy back then. They offered a larger store in a very convenient location, where people could shop at Lord & Taylor and then casually walk by the bookstore and wander in because of the attractive books on display. Guess what, I was laid off at age 15 from the Book Nook (oh, what a harsh world), and I ended up going to work at Waldenbooks. Soon the Book Nook closed.
Then B Dalton books came into the picture, locating in a more trendy mall in the area. Waldenbooks opened a store in that location, and for a while I bounced back and forth between the two stores before heading to college, where I transferred to a Waldenbooks in that area so I could work part-time while going to school. After all, I was sharing an apartment for $450/month with another student, and Waldenbooks paid me enough to cover the high $225 rent and have money left for pizza.
I took pride in the stores I worked in, and was living the dream making sure the sci-fi/fantasy inventory was well stocked with the best books and that some tabletop role playing games were also available for fellow zombies. I was also able to purchase books at cost, which was usually 33% to 40% below the retail price.
After graduating college, I moved to Atlanta and discovered my first Barnes & Noble. They usually operated in stand-alone stores (and thus were huge!) and while they had books, they also had coffee and a small cafe. What a great idea! Suddenly shopping at B&N was all the trend, and they had so many computer books on so many topics. I bought books on Oracle and VBA and other exciting technologies at the time at B&N because they had “almost everything!” And what they didn’t have, I could special order and receive in a few days.
Enter Amazon
It’s about this time Amazon entered the picture. They actually started out as an online bookstore. And I realized I could get “any” book at Amazon, even books that I would have to “special order” at B&N. They also had reviews, so I no longer needed to rely on whether the bookseller in the store know the best Microsoft Access programming book to buy. Further, Amazon offered discounts on almost every book, often selling the book at cost or just slightly above cost. So now I was in a quandary – do I go buy a book at full price and get a latte, or do I order for a discount and have the book delivered to my door?
Often I would sneak into B&N to scan a book first to decide if it covered what I needed, then slink home to order the book from Amazon. Over time, Amazon added the ability to preview a book online, saving me the guilt associated with such a sneaky practice.
There’s still a Barnes & Noble near my house at a fancy Spanish-style plaza (not mall). When I drive by the place, it brings such warm and wistful memories to mind, and a tear to my eye. I don’t think I’ve been in the place in over five years, and I buy all my books on Amazon.
Back To Today
While you can be a zombie programmer, you can’t really be a zombie business. Businesses change over time, and trends evolve. While I do still wish I could visit the Book Nook again, I would be disappointed to see only two shelves of books on computers. I would stay for a latte and a chat, and leave without buying anything.
Amazon is in a unique position today. They compete in almost all retail spaces, including groceries. They also offer AWS cloud solutions, which is a completely different product than their retail business. Rumor is they might enter the prescription drug business. They are disrupting the traditional retail model, but businesses have been disrupting each other since the start of the free market. Now we’re evolving to a “order and delivery” model, which ironically is the way many catalog stores like Sears worked at the turn of the century.
Amazon does need to be careful about maintaining an absolute distance between their retail competitive space and their cloud services space. Anti-trust regulation is no fun, as I spent nine years of my life at AT&T shortly after divestiture. We were constantly shrinking as a business, losing revenue to MCI and Sprint, and many of the employees just wanted to get a severance buyout package to leave and go work somewhere else. That’s a terrible motivation to work at a company.
Kroger’s concerns may be warranted. What this will likely mean is that we will have more cloud services that integrate across ecosystems. So you might use Google to house your database infrastructure and AWS to handle your text messaging notifications. I think this is a good thing to allow services to cross boundaries between cloud providers, though I expect some technical challenges like security and latency still exist.
In any case, it pays to be agnostic rather than evangelistic in approaches to technology, including cloud solutions. So keep an eye on Azure and Google Cloud solutions as well as what AWS offers. AWS is the big dog right now, but who’s to say if they may be the Waldenbooks of the future?