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Target is plotting a big move away from AWS as Amazon takes over retail

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Re: Target is plotting a big move away from AWS as Amazon takes over retail

#31

Post by samdoidge »

bdcravens wrote: post #17
didibus wrote: post #5

I don't know how strategic that move is in this case. It's not going to slow down Amazon's retail growth, and it'll just cost Target more to transition. They should have sound reasons to move away, like if they found cheaper and better alternatives. I don't know, it feels a little desperate from my point of view.

It seems more defensive than strategic. Seems like you wouldn't want your competitor to be your infrastructure provider and be in physical possession of potentially differentiating assets.

Defensive would fall under strategic.

Re: Target is plotting a big move away from AWS as Amazon takes over retail

#32

Post by dx034 »

origami777 wrote: post #24
cm2187 wrote: post #20

Earlier quoted context omitted.

I can't imagine an engineer creating a Diesel engine designed for fraud. But it happened. I'd say that in a company with an aggressive business culture like Amazon this is only more likely.

What's the cost/benefit of them doing that to Target? On the upside they could see what's selling well, what margins they have, etc. What's the net value of that information to their retail unit? I'd say it's probably very small. On the downside, they could lose their most profitable business unit. Check out all the audits they go through. If you're an enterprise customer with this concern you can get access to those…

> What's the cost/benefit of them doing that to Target? On the upside they could see what's selling well, what margins they have, etc. What's the net value of that information to their retail unit? I'd say it's probably very small.

It doesn't have to be a careful CEO decision. It could just be a curious engineer and someone in strategy who appreciates the data. That's probably how it started at VW, not with the board deciding that this is a wise strategy.

Re: Target is plotting a big move away from AWS as Amazon takes over retail

#33

Post by tehramz »

smegel wrote: post #25

If they are just doing this out of spite it is so silly. Do they think Amazon is going to go broke now and pull out of retail? If they are paying more to another provider, they are making themselves less competitive in contrast to Amazon, although maybe Microsoft lured them with a discount on Azure.

I don't think it's silly at all. Why help find another branch of a competitor's business? Do you not think that Amazon doesn't use money generated by AWS to help expand their retail business? I'm actually shocked at the number of companies that use AWS even though Amazon is a direct competitor. Netflix comes to mind.

Re: Target is plotting a big move away from AWS as Amazon takes over retail

#34

Post by smelendez »

dx034 wrote: post #29

I don't understand the synergies of AWS within Amazon. Amazon.com is probably one of the biggest clients, but probably not even the biggest. If they were to split up AWS from Amazon, the entities could be worth more than combined. AWS would lose restrictions of companies that don't like Amazon while Amazon.com could still access the systems.

AWS generates cash and lets the rest of Amazon operate less profitably. Investors are sufficiently impressed by Bezos's innovations (Prime, AWS itself, Kindle books and Amazon Video+Music, recent price shifts at Whole Foods) that they're willing to go along for the ride.

And I don't mean that necessarily negatively: they see Bezos as a visionary in a market he's helping to define.

Re: Target is plotting a big move away from AWS as Amazon takes over retail

#36

Post by stupidcar »

bdcravens wrote: post #17
didibus wrote: post #5

I don't know how strategic that move is in this case. It's not going to slow down Amazon's retail growth, and it'll just cost Target more to transition. They should have sound reasons to move away, like if they found cheaper and better alternatives. I don't know, it feels a little desperate from my point of view.

It seems more defensive than strategic. Seems like you wouldn't want your competitor to be your infrastructure provider and be in physical possession of potentially differentiating assets.

Don't want to because it hurts your pride, or don't want to because it has a practical impact on your ability to compete in your actual market?

Amazon/AWS is not going to fail because Target took away their business. But Target could easily screw up transitioning to another provider, and end up paying a lot in terms of money and wasted effort. Money and effort that would have been better spent improving their core business. Target should concentrate on build a better retail business than Amazon, not worrying about whether that business is built on top of AWS or some other cloud provider.

It's like how Apple compete with Samsung in the smartphone market, but still relies on Samsung as a central component supplier for many of their devices. I'm sure Apple execs would prefer not to give Samsung any money, but they're also smart enough to realise that using only non-Samsung suppliers simply for the sake of it would ultimately be a self-defeating move.

Re: Target is plotting a big move away from AWS as Amazon takes over retail

#37

Post by meric »

stupidcar wrote: post #36
bdcravens wrote: post #17

Earlier quoted context omitted.

It seems more defensive than strategic. Seems like you wouldn't want your competitor to be your infrastructure provider and be in physical possession of potentially differentiating assets.

Don't want to because it hurts your pride, or don't want to because it has a practical impact on your ability to compete in your actual market? Amazon/AWS is not going to fail because Target took away their business. But Target could easily screw up transitioning to another provider, and end up paying a lot in terms of money and wasted effort. Money and effort that would have been better spent improving their core bu…

Amazon could also cut service to Target and it could take months for Target to react properly through the courts.

Re: Target is plotting a big move away from AWS as Amazon takes over retail

#38

Post by statictype »

origami777 wrote: post #24
cm2187 wrote: post #20

Earlier quoted context omitted.

I can't imagine an engineer creating a Diesel engine designed for fraud. But it happened. I'd say that in a company with an aggressive business culture like Amazon this is only more likely.

What's the cost/benefit of them doing that to Target? On the upside they could see what's selling well, what margins they have, etc. What's the net value of that information to their retail unit? I'd say it's probably very small. On the downside, they could lose their most profitable business unit. Check out all the audits they go through. If you're an enterprise customer with this concern you can get access to those…

Where are the encryption keys? Probably back again in AWS?

Re: Target is plotting a big move away from AWS as Amazon takes over retail

#39

Post by statictype »

origami777 wrote: post #24
cm2187 wrote: post #20

Earlier quoted context omitted.

I can't imagine an engineer creating a Diesel engine designed for fraud. But it happened. I'd say that in a company with an aggressive business culture like Amazon this is only more likely.

What's the cost/benefit of them doing that to Target? On the upside they could see what's selling well, what margins they have, etc. What's the net value of that information to their retail unit? I'd say it's probably very small. On the downside, they could lose their most profitable business unit. Check out all the audits they go through. If you're an enterprise customer with this concern you can get access to those…

The benefit, as the OP mentioned, is allowing them to de-risk certain growth strategies or investments.

I think it's totally healthy to maintain paranoia about AWS if you are competing against them.

Re: Target is plotting a big move away from AWS as Amazon takes over retail

#40

Post by smegel »

tehramz wrote: post #33
smegel wrote: post #25

If they are just doing this out of spite it is so silly. Do they think Amazon is going to go broke now and pull out of retail? If they are paying more to another provider, they are making themselves less competitive in contrast to Amazon, although maybe Microsoft lured them with a discount on Azure.

I don't think it's silly at all. Why help find another branch of a competitor's business? Do you not think that Amazon doesn't use money generated by AWS to help expand their retail business? I'm actually shocked at the number of companies that use AWS even though Amazon is a direct competitor. Netflix comes to mind.

Yes but Targets contribution is hardly going to make that big a difference.

OTOH the cost of moving cloud providers, if significant, is going to be an additional operational expense that would make them less competitive.

It's like Apple buying chips from Samsung.

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