They did much more and I was surprised that they existed this way in business
In the UK, for example, even before the EU directive, unpaid commercial debts accrue interest and late payment penalties and can be claimed retrospectively for up to six years. This means that you can quite legally wait until you've stopped doing business with a particular customer before then claiming late payment penalties and interest.
These rights cannot be waived by contract.
And for someone who wants to point out the lack of that regulation in the USA is still "pro-business" I'd say it's pro-monopoly, and against the 'culture of business' that was traditionally a large part of the US.
They then intentionally delay milestone payments about 3/4 of the way though the project, watch the company fold(since that's the highest-burn part of the project) and then re-hire 2/3rds of the existing staff who are now out of a job to finish the title.
It doesn't produce the highest quality games but I'm sure it earns them a bit more money.
One party thinks they're trying to make good games, and getting paid in the process.
The other party views the rest of the world as a potential money machine, and they're just optimizing around which lever to pull to maximize their return.
Matt Levine had a fun article about this happening in a different context. 'FERC built a terrible box, and the box had some buttons that were labeled “push here for money,” and JPMorgan pushed them and got money.'
One approach isn't necessarily 'wrong' and the other 'right', but bad things obviously happen if you thought you were working with a business partner, but instead you got a shark.
> One approach isn't necessarily 'wrong' and the other 'right', ...
No. The truth is that one approach is, in fact, unambiguously morally inferior to the other. That morality may not match the financial implications of a contract, which should be able to assume "good faith" and "fair dealings" in their contracts.
I can understand that some people care more about the money than the morals, and will exploit contracts and the law in unexpected ways to try to make more money or gain more power. But I refuse to accept that this behavior is morally ambiguous. And furthermore, I refuse to act immorally.
Perhaps that means I will miss out on some money or power. Perhaps I will be competed out of business because of this conviction. And yeah, I'll reluctantly play the stupid game where I must by offering discounts for on-time payment instead of attempting to write in appropriate penalties and interest for late payments that I can't enforce against an army of corporate lawyers.
But I can say with conviction that acting in bad faith is morally wrong.
It doesn't excuse the practice and I always appreciated the clients who paid correctly and promptly, but I don't think it's limited to a specific company, and small businesses in general should be prepared for this type of short or delayed payment, from both financial and legal perspectives (credible legal backing can go a long way to establishing yourself as a vendor whose invoices are to be respected).
The problem with behemoths like Walmart is that they know you're not going to be able to stand up for yourself in a meaningful way. The relationship means a lot more to the non-behemoth, for whom it may well be life and death, whereas the behemoth can probably get a replacement vendor set up within a couple of weeks.
Lots of huge companies exploit such advantages aggressively; in many cases, it crosses the line between aggressive business and cost savings to outright bullying.
I imagine most giant corporations now behave this way, with only the little guys playing by the rules, and paying the price.
Discounting only the single invoice that follows one paid on time keeps them honest. Short or late pay me, and the next invoice gets no discount.
What you're describing obviously sounds different - but somewhat an extension of holding off payment for as long as possible, to the point were it becomes onerous to the vendors.
edit: for clarity, typos
If you have a small business, you need to be very leery of having a large customer.
I did retail data analytics on behalf of large CPG companies with their Walmart, Target, Costco data for a few years. Walmart made it very, very clear for several years now that their sales/inventory data, and any apps the vendors build using it, couldn't be on AWS.
It made things very challenging for us, because Azure is too expensive and Google Cloud (especially at the time) lacked support that wasn't absolute shit.
I needed to make payroll so drove over to HQ to try to get payment. They wouldn't even let me in past the lobby. Finally I just asked everyone who walked in, "Oh, are you here to try to get them to pay their overdue bill as well?"
Eventually a confused looking guy came out and handed me a check.
On the other hand, Amazon is a massive immoral monster devouring the US economy and replacing it with something vaguely worse, year by year. It's rapidly approaching a "too big to be allowed to fail" status, and that's awful for Americans. Since anti-trust laws weren't written by a generation able to envison entities like this and the current political climate is that they'd rather die than appear anti-business... I guess the only entities with the power to push back against Amazon are in fact the other major corporate vendors.
My family had a small manufacturing business that went bankrupt years ago. At one point we were making a part that ultimately ended up on a WM product. Periodically WM's folks would come around and do a strong arm routine trying to renegotiate the contract. It got bad enough my dad adopted the habit of bringing a couple of the very burly folks that worked in the fabrication shop to sit in on meetings and reduce the intimidation BS.
They are a ruthlessly scummy business and have been for a very long time.
It's worth reading.
"Make it cheaper or we'll make it cheaper for you."
I often keep an eye on the product number if I'm every buying electronics or tools at a big box store to see if it's different than what I find online for what is ostensibly the same exact product, as that can be an indication that you're buying a cheapened version.
I sympathize however. Strong Arming small and middle sized businesses, which are the bedrock of American Capitalist Power is just egregiously scummy. This is also what I think is currently gone wrong with the American Capitalism, but thats another comment, somewhere, sometime I guess :)
Here are stand out ones from the article. For just small business alone. I actually thought middle size business would have had figures like this.
* Small businesses create 75 percent of the net new jobs in our economy.
* Small businesses pay more than 44 percent of the nation's private payroll.
* More than 50 percent of the U.S. private gross domestic product is generated by small businesses.
* Almost 97 percent of exporters are small businesses.
Take Books and Ebooks for a good example.
Regarding the major book selling firms, Amazon are the good guys because a relatively few book firms control the market. Amazon is helping to improve the customer experience by lowering the price of books.
they're replacing an oligopoly that is exploiting their customers with a monopoly though.
amazon hasn't really started exploiting its monopoly status yet (to my knowledge) toward the consumers, but a lot of authors have already started to complain about it.
The best managers there are the ones who largely disregard the incentives placed before them and respect the complexities of working at such a large scale. It sounds like the people who would show up at your dad's were enabled by management who cared more about bottom line sales than understanding how to appropriately treat a supplier with limited volume.
I'm sorry this was the experience you had, but there are just as many talented, respectful, and generally honorable people that work there and I wouldn't want them to get lumped in with the scum. (Source, have worked at WM home office)
Wal-Mart is pretty infamous for squeezing suppliers & vendors on price and operating procedures. Hard.
I think it is funny that the people demand the government force companies to lower prices caused by the government granting a monopoly to said companies why way of the patent system....
How about we just end patents.
Second, the real danger in both cases (though people only see it in one, hence my point) is that you're killing off the OEMs this way. No one wants to bring innovative new products to market if some monopsonist will just force them down to the mandated n% profits.
1) Walmart doesn't pass savings to consumers, it passes them to shareholders, as they have a fiduciary obligation to do. The "lower prices" thing is just marketing; WM's prices aren't particularly low once they've driven away their competition.
2) If drug companies want to charge a R&D premium for bleeding-edge innovative products, that's fine. What's not fine is price gouging consumers for drugs they depend on to live, that are not innovative in 2017, and that are cheaply available in other countries, like the EpiPen.
Which it does, so it is a completely valid option.
There is absolutely nothing forcing them to pick any particular use for the money. Both uses benefit the company in some way. Both uses are fine. It's not like they're burning it.
>There is absolutely nothing forcing them to pick any particular use for the money.
Except this legal precedent right here:
It works hard to lower supplier and employee costs not to benefit consumers but to prop up their own margins.
That's what Trump should tackle if he wants to stop job migration, but it seems like he's focused on anything but regulating BigCos.
Back when Barnes and Noble was the big book store, same thing, they pressured better prices. What do you do, split up the book store into two companies, who still control the same market share and will both still put pressure on the book companies?
Last I read, Amazon mainly fights for cheaper kindle prices, because it's considerably cheaper to sell a 12 meg file than a 200 page physical book. Which I agree with publishers, only benefits Amazon and not entirely fair, but for the most part, not much ahs changed, most kindle copies are MAYBE a dollar less.
In Germany, book prices are regulated: the printer sets the price, and the price the customer pays must be this price. Only exception are damaged (e.g. books with CD-ROM, but the CD is missing) or used books.
The prices the retailers have to pay at the printer are of course different and may well be based on the # of books the retailer has purchased, but the system right now successfully prevents price wars. And yes, I am happy with that, because it ensures that authors get proper funding instead of having to fight for the scraps.
> Last I read, Amazon mainly fights for cheaper kindle prices, because it's considerably cheaper to sell a 12 meg file than a 200 page physical book
The printing and distribution costs of a book are not that high, once you have a significant enough mass of books. What Amazon wants to do here is squeeze the authors off their profit, and this must be prevented.
Books are culture, and culture must not be bowing to the demands of predatory capitalism or else we'll sooner or later live in a Idiocracy world with a movie called "*ss" the sole Oscar winner... (okay, that was an exaggeration, but still, it's a danger to culture!)
This is already becoming reality as the internet has made traditional copyright completely unenforceable on the general population. For example, Adobe no longer sells Photoshop as a standalone unit, but as an ongoing subscription, which gives the impression that the vendor is an active participant in usage.
I mean that culture prospers more by allowing people to create and publish whatever iteration, derivation, or alteration they want than by ensuring a small group of well-moneyed "idea owners" can utilize the force of the state to monopolize significant cultural icons and stop people from going "too far" in their cultural iterations (that is, too likely to win the favor of the public as compared to the "owner's" offering; being too desirable and competitive).
The viability of establishing a revenue stream from this cultural lather is separate from the value or existence of a fertile culture itself. Creation will always occur. Copyright is just a matter of how far those creations are allowed to grow and/or spread before they get crushed by someone else's bank account (which can have chilling effects on the back-end, preventing the incubation of certain ideas due to uncomfortable legal risk, but it won't stop the ideas from germinating).
Culture is in a bad state when disseminating the wrong ideas in the wrong medium can result in the complete forfeiture of all earthly freedoms. If you sell T-shirts bearing Mickey Mouse's image without the permission of the "owner" of that cultural icon, you may very well find yourself not only deprived of your possessions through a costly legal battle (which you have lost before you begin), but potentially also deprived of your liberty when you're jailed for criminal copyright infringement. All because our concern for an active "culture" somehow translates into preventing derivatives, iterations, or improvements, blocking normal feedback and optimization processes and hopelessly distorting the market.
Fanfic authors have been sued for getting too close to the "owner's" trademarks. It's an entirely unnatural state of affairs and it stifles our cultural maturity.
Personally, I would suggest that people stop expecting passive IP-based revenue streams to cover them, because I don't think there is a lot of money in that down the road (because the internet makes it impossible to practically enforce copyright). You'll have to create a need for an ongoing service, paid for in small units, to get people to part with their money. Software vendors like Adobe have already accepted this.
Same is similarly true for ebook distribution. It isn't like the infrastructure to do that at scale is free, either. Both in technical of copying the bits around, and in the physical of authors/editors/etc.
However, I fail to see any way in which the advantages do not weigh in on the ebook side heavily.
Authors typically get a 10-15% cut of print books. Amazon wants to squeeze the publishers off their profit. While they can be heavy-handed and exploitative, they are much less so than traditional publishing. It's not abnormal for an author to make more money of a $9.99 kindle sale than a $25 print sale.
My Raptor romance novel should not be 'regulated'.
I'm a strong proponent of open <EVERYTHING>. If shady behavior arises in business, government, public services, and even public discourse, I'd love to see a moderated form of public disclosure become the standard way to reveal and address such 'discrepancies'. Now that the 'net is ubiquitous, I don't see why age-old small town arbitration principles can't be applied to redress virtually all forms of grievance, as long as the public exchange is conducted decorously, as a judge or strict moderator rules could ensure.
IMO, the state of AI is getting pretty close to enabling this sort of moderator service, making it impossible for 'conduct unbecoming' to persist out of the public eye. What cellphone videos are doing to police/perp misbehavior ought to be possible for general business practices too.
The problem is, there is no such thing as a moderated public exchange. Everything can be bought off, be it a journalist, a policeman or a judge. Mass media outside of countries with well-funded public media stations (think BBC or the German TV/radio stations) is always aligned to corporate interest, not to public/journalistic interest. And for what it's worth, state-funded journalism is often enough also subject to meddling by politicians.
> IMO, the state of AI is getting pretty close to enabling this sort of moderator service
lol even Facebook's content AI, which may very well be the strongest in moderating (Google's strength is lying more in content comprehension!) is not able to distinguish between an iconic Vietnam picture and child porn or remotely good at detecting propaganda. I certainly would not want the Facebook AI as a political moderator.
A lot of conduct unbecoming like this becomes public (Intel is a good example). How many people stopped buying their products even with literal judges finding them guilty of some particularly nasty anti-competitive practices?
Indeed. If people could get cheaper clothing if slavery was made legal again, they'd do it in a heartbeat. Witness to a lesser extent the general sentiment on HN that Uber is "helping drivers", when they're indentured servants.
I wouldn't call it consumer excess when you're exploiting someone with limited options.
However, like other credit agencies, it isn't infallible and is only as good as the information it is able to gather through information sharing agreements. They have also branched into the "Improve/Monitor your D&B score" business which is pretty shady. 
[Edit: We also have vendors require references if we are looking to establish a line of credit. We also provide references saying how much credit they have and how often they pay on time. It is a manual process.]
 https://www.dandb.com/ (See, their credit services are totally different! They use "and" instead of "&"!)
Of course investors and larger institutions use Standard & Poors and Moody's to provide credit ratings and background histories on public companies and their stocks and bonds.
What's distinctive here, I guess, is that Walmart has the weight to get that info and then start making demands instead of just deciding whether to trust the partner.
In 2002, Walmart did more business than its next 6 grocery and general-good competitors combined. Something like that is presumably still true if you restrict to brick-and-mortar spending. If you sell something mass-market (e.g. pickles), a huge portion of all shopping happens at Walmart - you can get beaten by a competitor just for not playing ball with one retailer. Similarly, struggling companies can be saved by Walmart (e.g. Levis), but only if they concede to whatever Walmart demands.
I'm not going to take the anti-capitalist tack, here. When Walmart tells Levis to fix their supply chain and introduce products at a lower price point, that's how markets should work. They demanded reform, and that's what saved Levis - they might not even have needed to sell at Walmart if those changes had come sooner.
But the larger pattern is troubling. Walmart has so much power over smaller suppliers that it's like informal ownership - they're vertically integrating with none of the legal conditions or risk. And that helps them drive pretty serious ethical issues without ever taking direct action. Everything from monopoly creation to violation of labor laws to environmental devastation (mostly overseas) stems from Walmart's pricing demands.
They may not ask for anything unethical, but asking for a 5% price cut every year means something has to give. With such enormous legislative influence, they can bend laws and trade agreements to favor their model. With the freedom to change suppliers and limited legal accountability for their suppliers' actions, they can work with whoever's willing to behave worst, and give them a market that cripples everyone better behaved. So you don't have to sell for Walmart, but in a lot of industries you can expect to suffer for those scruples.
And if you're creating a valuable product at a good price, then you have leverage over Walmart. If you're selling a commodity, then be prepared to get squeezed. That's how it should work.
That goes against our entire economic system. We'd still be driving shitty expensive cars if that were true.
Not sure if this is the case with Snapper (article doesn't say), but that's typically how they get back into the stores.
1) Walmart may be the biggest retailer in the US, but they don't have half of the US homes as subscribers. Amazon Prime does. I doubt Walmart.com attracts any where near as many e-tail visitors as Amazon, and I suspect the gap is widening.
2) Amazon is decades ahead of Walmart in the online shopper experience. I grit my teeth each time I visit Walmart's website. It's slow and ugly and very clumsy to navigate or search. And it hasn't gotten better after years of this.
3) Walmart's products are mostly middle-to-down-market, even online, and that doesn't seem to have changed all that much even as they've grown their e-tail efforts. Try buying a nice watch or high-end stereo equipment there. No such ceiling applies to Amazon, probably because Amazon welcomes re-sellers (which can span all market niches), while Walmart doesn't.
So I think Walmart has a long way to go to compete equally with Amazon, and isn't a comparable threat as an all 'round monopoly.
And personally, I don't hate Amazon enough to object to a monopoly threat from them the way I do Walmart. I think ill-will does matter when it comes to federal action on anti-competition. If Microsoft were as despised as AT&T was in 1984, they would be in pieces today.
Ha- as it happens I just bought a nice watch, today, and after perusing the options on Amazon I found the same watch I was about to buy direct from the retailer. However after considering the number of knock-off items I've received from Amazon, I simply refused to trust that the watch was authentic, and ended up paying more for the peace of mind that I got from buying it direct from the manufacturer.
Amazon's lack of quality control makes it impossible to trust them for expensive items that can be knocked off. It's funny that you say that Wal-Mart is middle-to-down market, because Amazon is where I buy my household staples and some consumer electronic items and cheap crap that I'm not overly concerned with the quality. Clothing, watches- pretty much anything of quality I look elsewhere.
That said, I do buy clothing from Zappos, and I think Wal-Mart made a smart move to acquire Bonobos to make a serious move into high-end apparel.
Yes but I'm quite sure when I order something from walmart I'm getting the genuine article, not a knockoff dumped into the SKU bin by some shitty counterfitter
This is false, You can sell things on walmart.com as a reseller
There are not many resellers doing it, no where near as many as Amazon but many large online shops are embracing the Amazon Model, Newegg does it now, Walmart, and a few others.
Amazon is also getting more aggressive with their resellers, putting in more restrictions, heavily favoring the Fulfilled by program where Amazon gets a larger cut, increase the number of blackout catagories, and increasing the number of items sold by Amazon directly which puts huge pricing pressure on Resellers that can not get the pricing amazon can.
Several Niche and some larger brand have pulled out of Amazon completely in the last couple of years for these (and the counterfeiting problem) issues
Hasn't the same thing been said about Walmart?
To wax metaphorical, I'd rather the monsters devour each other while we race for a super-weapon to defeat all monsters and protect real people.
This situation where corporations are effectively replacing the state is not exactly what I had in mind when I said the world would be a better place with a diminished role of the State in individual life.
And I think it would be very difficult for a company to offer the level of convenience and good UX that Amazon does at a much smaller scale. For example, part of why they can get very fast shipping down to a reasonable price is their huge network of distribution centers + their size giving them leverage in negotiations with UPS/Fedex/et al.
If you split Amazon into a dozen smaller companies, the overall customer experience would likely be worse.
I completely agree with it.
My hometown's retail business all goes to the Walmart super store on the outskirts of town. It's weird to be living in a Bruce Springsteen song.
Could say the same thing about WalMart w/r/t local retail in rural America and now cities for the past 40 or so years...
It's not limited to warehouse workers, either. In 2015 Jodi Kantor and David Streitfeld of the New York times published an expose of the hard-charging environment at Amazon, with stories about employees reduced to tears at their desks.
That was so untrue, that Jeff Bezos felt the need to send out a memo stating how much he has never seen that side of Amazon, which, as CEO, of course he's never been mistreated by middle management.
I'm also a mod at /r/cscareerquestions, Amazonians would chime in back when this was big news, but the vast majority were always like "yeah it exists but not my team".
Please do demonstrate how it is absurd.
this should be enough
> devouring the US economy and replacing it with something vaguely worse, year by year.
Luddites repeat: automation, price reduction and job shifting isn't bad for the economy and it isn't worse either
> It's rapidly approaching a "too big to be allowed to fail" status, and that's awful for Americans.
Completely unsubstantiated. Surely it's one of the larger employees, but compared to automotive there are few satellites that lives because of the induced workload - if Ford closes, all subsidiaries and most vendor will close with it; if Amazon closes, the impact will be more limited.
> Since anti-trust laws weren't written by a generation able to envison entities like this
This is incredibly short sighted, since those were written at Rockefeller peak. Entities larger than this and more looming where at the order of the day, while Amazon has a load competitors and alternatives to fend off.
> the current political climate is that they'd rather die than appear anti-business...
This political climate endured for most USA history, with shortly timed bouts into centrism, hardly something current, hardly something that slowed down the USA economic growth. cfr - Europe.
> I guess the only entities with the power to push back against Amazon are in fact the other major corporate vendors.
That's ok tho, as in not a bad thing
All in all the whole claim is conflated hyperbole that's filtered by an unhistorical view of the current situation
You haven't proven that. And its entirely possible that it's not worse for the economy in general, but it's quite awful for segments of it. And given the current attitude toward the safety net in the US, once those jobs are gone, that's it for those people.
I wish this would see wider acknowledgement.
Lump of Labor is a fallacy, people do find new jobs, and productivity does improve the economy. But none of that implies that the displaced people will be better off in the end!
Similarly, free trade agreements are economically efficient, and boost per-capita GDP. But even aside from implementation issues (i.e. agreements that go far beyond lowering tariffs), there's no particular reason that the extra money ends up benefiting the same people who get hit by outsourcing.
If anything, the studies I've seen say that being displaced by automation or outsourcing causes a permanent wage decline. The original Luddites were right - they probably saw lower wages for their entire lives thanks to automation.
Pretending that overall growth inherently means an economy which works better for the majority of people is frankly dishonest, especially (as you say) in a country so opposed to helping the displaced.
I think that's awful. You think you should have to fight and use substantial resources to have a say in how your life is lived. I do not share this belief.
But it's worth pulling at one string of your argument. Work is effectively mandatory for US citizens. You cannot handle any health crisis, or even eat and drink reliably, if you do not work. There is no notion of job retraining or security, and over half the citizens of the US make so little money that they effectively get subsidies from the government and don't pay taxes.
Removing these people's livelihoods without any opportunity for retraining is effectively ruining their lives. Automation threatens to do this without sharing the returns on automation with the work force it's displacing. That is an unacceptable outcome.
nope, but I see that's not stopping you to go ahead and make up things about me just to hijack a high post for your tirade about social security, to which I agree in principle, but furthers nothing the argument at hand
But secondary effects of lost sales from vendors would almost certainly upend the vendor table and make goods very difficult to get ahold of. Amazon as a delivery service (and its smile boxes, ads for its own products on said boxes, and specialized delivery frameworks) is as much of an American institution as the post office now, and growing as it takes over its own delivery and logistics.
But accounts for less than 5% of retail sales overall. Until they start hitting a bigger chunk of total sales, I would not consider them too big to fall. Walmart is too big to fall, as it litterally controls a bunch of local economies. If Amazon closed tomorrow, there would be a shitty time in Seattle, but people would just go to Ebay, Walmart, Etsy, and Alibaba.
If WalMart closed tomorrow, a good chunk of the southern states would run into a state of emergency because the unemployment rate would skyrocket, and there would be no companies to pick up the slack locally, so local economies all across the US would crash.
Many towns would lack groceries or supplies because WalMart is all they have after WalMart ran everyone else out of business. How many businesses has Amazon shut down across the entire US?
Amazon may end up like Uber: forcing competitors to upgrade their technology, but not succeeding in stamping the competitors out entirely.
Maybe that should change. But... even if we take it at face value...
Name a company in the world that is competing at scale and cost with AWS.
In the US, Amazon is definitely nowhere near suffering a loss of customers from Google and Microsoft's offerings. and they're securing massive contracts with key institutions in the US.
There's 1 in China, I guess. That market isn't freely accessible.
Cloud services providers are a New Thing but a Thing which is absolutely critical to the world market. It's utterly unregulated right now, and that's pretty crazy given how much power it has. The only thing holding AWS rates in check is the threat of competition from 2 other American companies, and the hope of securing more critical telcom and bank contracts.
And beyond that, in terms of "simple VPS's" there are a TON of competitors and some of them are already starting to move "up the stack" by adding new features and services like object storage.
That's not to say that AWS isn't fairly dominant at the moment, but there is enough competition to keep them honest. See, for example, how they've had to continue to lower prices on a regular basis.
Azure has more locations, and is better than AWS is several areas.
What Azure and GCE both have over AWS is better performance and better cost. AWS on the other hand has more services that just work together. So you either choose ease of integration or better performance. My company chose ease of integration.
Example, Amazon owns its CDN, Amazon owns all its services. Everything is in house, developed to work together, and just works out of the box, and you are dependent only on AWS.
Azure CDN uses Akamai. So it's not entirely in house designed and built. So we are now reliant on two companies working smoothly together rather than just one keeping it together. Not a huge issue, but something my company also had to factor in on reliablity.
Same with SLA. AWS has a better up time than Azure and GCE.
Again, not to say these services are inferior, but to say Azure is a better service is a lie. Does it have better performance on networking and HDD side? Yes, but I will take slower performance over a better up time, every time.
You shouldn't ding me on voicing a clearly labeled opinion as an opinion.
> but to say Azure is a better service is a lie.
Like you did here. This is ridiculous. You have your value judgement, I have mine. They're different.
That's not necessarily true:
what is unreasonable about this? do you trust amazon?
Amazon is a massive immoral monster devouring the US economy and replacing it with something vaguely worse, year by year.
But I suppose two battling monsters beat one rampaging monster, at least.
Explain how this is wrong.
WalMart has asked a Data-Warehousing service (via its customer) to please not do what it does - data-warehouse internal information about sales, revenue, etc - on their retail-competitor's servers. Data which could give Amazon sensitive inside information on WalMart's operations and financials..
I dono if they've made other less-reasonable requests, but the example provided in the article is completely reasonable.
I always find it a ironic when I've interacted with startups which have a plan to bring some disruptive thing to market that potentially competes with Amazon or Google, and yet route all their data and communication through these platforms. :)
But how do you guarantee encryption at all stages such that Amazon cannot snoop it when you have to do final mile encryption on hardware controlled by Amazon?
I mean encryption for messenger services where each end is not controlled by a third-party is one thing...but how do you guarantee the third-party in control of the hardware responsible for performing the encryption isn't snooping?
The only thing I can think of (and again this isn't my strongest area) is to not handle any data on an Amazon server that isn't already encrypted...but how does that work if you are using a service like RDS or Redshift?
And even if you could work out a super complicated security-conscious solution...is it unreasonable for Walmart to not trust all it's vendors to take such extreme measures and therefore just create a general policy against the use of AWS?
That said, it's not illegal for them to see that xxx vendor increased their storage costs/bandwidth costs by $yyy every month, and that you could look into it - without using one piece of encrypted data.
Disclosure: Former AWS
It's true of anyone selling bare metal servers too, it is just harder to snoop but the technology exists to do so.
If the latter, then I think that's just extreme paranoia. If there was ANY evidence of Amazon doing that it would destroy everyones trust in AWS and I suspect people wouldn't be able to move away fast enough (Which actually long term would be good for Wal-Mart).
According to the article, Walmart seems hesitant to support so much profit running to Amazon. While Amazon's retail business runs on razor thin margins, their cloud business reaps enormous profits. That means that the cloud business is helping Amazon put a lot of pressure on Walmart. Without it, would they be able to eat such thin to negative margins in the retail business or would they need to raise prices and make Walmart's offerings look better for consumers?
In the article, they note that AWS was 89% of Amazon's operating income. It's likely that Amazon's thin retail margins would bother investors if AWS wasn't raking in money. It's also likely that AWS margins are helping Amazon be more aggressive in retail.
Still, I don't think it would be more paranoid than most companies to avoid using a competitor's infrastructure at that size. Amazon will prefer self-hosing email rather than using Gmail regardless of assurances.
It's not even just about trusting that the competitor wouldn't actively decide to peek into your data. It's trusting that no one in that company would take a peek even though that the competitive data could give them a huge career boost. Let's say Amazon hosts their email with Gmail. You're a struggling middle-manager at Google Cloud who has seen some failures. Maybe peek at Amazon's email and see what their cloud plans might be and when you're able to get out in front of Amazon you amaze your colleagues - maybe you have to bribe someone with access.* It's not just trusting that Google doesn't want to do this.
*Now, I'm sure that Google has safeguards to make sure that employees can't do this (or it's at least hard), but the point is that you have to trust 1) the company, 2) the employees, and 3) procedures the company has put in place to prevent nefarious data access.
1) Slack uses AWS. While it's perfectly possible to operate without slack, chat services are valuable during outages. The kind of incident where it would be most valuable is precisely the kind of incident that would take it down. Communication services must be completely independent of the AWS infrastructure. Likewise, something like PagerDuty is effectively off limits. Though they've done a good job building resilience, PagerDuty have been affected by AWS outages.
2) Slack communication isn't encrypted end to end. While it may be stored encrypted at rest, it is stored in a method they can decrypt, read and analyse (inherent in the features they provide). Chat is filled with critical operational information, and (no matter how well you train people) passwords and other critically sensitive information. There's always an extremely slim chance that a rogue actor could choose to access information they shouldn't. That information is, also, potentially accessible to someone who might hack in and compromise the service. We've already seen Atlassian's hosted HipChat service compromised and some chats leaked. Slack has, arguably, an even bigger bullseye painted on it. (fun thought exercise: what damage could a malicious actor with access to yours slack channel do with your chat ops bots? How long would it take to stop them?)
3) feeding on from 2, to some degree, you don't control the security of hosted solutions. Audit compliance is a checklist game, it is perfectly possible to check every point on those checklists and still be inherently insecure. If you're even remotely paranoid, you've got to assume that anything you don't host will be compromised, and weigh up the risks associated, against the value and necessity of the service. Leaking operational information is a big, big risk. Amazon's security sets a high bar for paranoia. They are determined to never have a New York Times front page article "Amazon hack, credit card information stolen", or similar.
There's just no strong value in them switching to Slack, just a whole mass of unnecessary risks.
AWS also has many compliance certifications (HIPAA, FedRAMP etc), sending data outside your organisation may be a no-go from a compliance perspective.
Competitive intelligence is a thing. For all you know, Proctor and Gamble has Amazon consultants in house, and those folks may well have access to information sensitive to WalMart.
Be careful about assuming rationality from the actors here. Lots of egos and competive people are at play here, and people will do incredibly dumb things to win.
The major telecoms were all revealed to be giving American users' data, traffic, and communications directly to the NSA a few years ago. Did you move away from them? Did anybody you know?
As a historical reminder, those revelations were considered to be shocking at the time.
It seems that a lot of people forget that Wal-Mart dwarfs Amazon in sales volume for companies like Procter and Gamble so probably have more leverage over them than most think.
My guess has been that Amazon wants to continue to add value to the Prime program in the hopes that they can start to ratchet up the cost or create different classes of Prime to try and extract more profit. The more steps that competitors like Wal-Mart take to pressure Amazon's ability to cross-subsidize and raise the price of Prime, the harder it's going to be for Amazon to extend its lead in ecommerce.
So once you start getting traction and customers, there's some internal product manager evaluating whether it's worth entering your market.
I don't think anyone will have a confirmed example of it happening to AWS customers - but if they are completely willing to destroy smaller vendors on the retail side with their own branded products, I can't imagine them saying AWS is where they draw the ethics line in the sand.
You could make a case for Netflix being an example on the AWS side, but I'd bet more on coincidence.
Amazon would be amazingly and utterly stupid if they were not analyzing their AWS service usage/traffic/spends by market vertical, and I'd imagine must more granular than that. That's simply to sell to people. It's not much of a leap to start using that data to direct internal development and identify unexpected areas of growth.
It's a good thing those never happened either.
But we also had issues with Amazon not wanting to run an appliance on vmware, so apparently it works both ways.
Of course im about to be shouted down by a bunch of posts with , well guess what, the goal of business like this is to ensure that nobody can ever make such a citation.
There is a reason Google, Intel and Apple are extremely paranoid about their internal data, and Walmart too. Its no coincidence this goes hand in hand with being very successful and leaders in their field.
Which also happens and is fascinating.
If there was ANY evidence of Amazon doing that
it would destroy everyones trust in AWS
If they can add a penny to the earnings or take one away from Walmart, that means bonus and stock $$$.
They have to snoop the data from the hypervisor since the only place it's available decrypted is on the virtual machine processing the data.
Couldn't they just make a copy of the vm, isolate it, and then break into that one? sure the data will be "old", but not by a lot, and it would theoretically be undetectable.
If they want to capture the entire data stream, they'll need to capture it in real-time.
B) That's likely still going to be a large amount of very usable data
In the application I was working on, they had over a TB of data, broken up into 32MB blocks, each with a unique key that had to be unwrapped by the HSM. If you stole the VM you'd get only a few blocks of readable data with it.
I assume that if Walmart values this data, they'll take similar precautions in the cloud.
My point though, is that the attack is definitely feasible. I think WM has every right to be concerned.
Why? Everyone knows that metadata count these days. Which AWS/Amazon has plenty of.
It's been known before:
Battle of the Airlines: King 'backed dirty tricks': BA staff hacked into Virgin computers and poached passengers
CEO Diktats about using not using competitor services for anything whatsoever, are as old as Microsoft. Wal-mart is not in the cloud business, so I can only wonder if, as others have commented, it is about data security in AWS domain, since Wal-Mart's main competitor is Amazon.
We know what Google and Facebook get up to with peoples data, why would Amazon not analyze or try similar to their customers? To have all that technical capability and not be curious about stuff would be a waste.
Finally, I think it would be great for everyone (except Amazon), if wal-mart got in to the cloud. Using their leverage to create cheaper cloud would benefit us all.
Amazon may not be the most ethical company, but they've never been accused of short term thinking. It's just completely outside of what if expect from them.
Even groups with extremely stringent security protocols has trouble with people skirting security procedure. Consider the US Air Force who has control over a large collection of nuclear weapons. They have some of the most stringent procedures like Chain of Custody (any time a weapon changes hands a verified ledger is written to by the recipients and deliverers and sent elsewhere for archiving and oversight), Two person control (There are always two people with every weapon and every launch code container) and about a dozen other extreme procedures they still occasionally "lose" a nuclear fucking bomb.
The last time they lost one they accidentally left it loaded on an airplane on a low security runway. Any construction worker (which are always on every Military base) could have walked up to the plane and hauled off with it. Thankfully this didn't happen and hopefully runway security would have intervened, but this goes to show that as long as people are involved there can and will be mistakes.
To drive this point just a little harder, the Air Force has strong motive to not lose weapons and Amazon might have financial incentive to look on occasion.
I re-iterate, what about Amazon, a company, a collection of individuals, makes them better than other people?
If someone actually authorized snooping on customer data to get a competitive advantage, you'd know. I spent five years at Amazon, and if there's one thing they instilled in you it was customer obsession. Someone would leak that it had been done just out of spite of the exec who ordered such a violation of the culture.
Do Google, Amazon or Microsoft look at the data of their cloud offer clients?
I bet that if they do and it is know their business would go to hell
So how come the VW fiasco didn't get caught years ago?
It's not inevitable; much depends on employee culture.
On the other hand, look at Uber.
Any hint that they could have been sneaking in confidential data of customers?
Now they are dealing with a much more nimble and capable competitor. Yes, Amazon has its own unreasonable policies that squeeze vendors, but at least they have reasonable tech in place and they move fast when it comes to support and service. Case in point: Applying to be a third-party seller on Amazon takes days, Wal-mart Marketplace takes 6 weeks.
I am not sure if this latest Walmart policy reflects incompetence, misguided policy, dirty tricks, or a combination of the three, but it serves to push vendors away from Walmart and into Amazon's tight embrace.
I got the impression they would turn the screws on industries to get cost savings via scale. This move seems odd.
> For many suppliers, though, the only thing worse than doing business with Wal-Mart may be not doing business with Wal-Mart.
We really are slipping into the 1870s.
We discovered this during the industrial revolution, and the modern liberal democracy and ideas around fair play, consumer protection, competition as an important mechanism in a market economy, etc. grew out of what we learned.
Unfortunately, for some bizarre reason, we seem to be systematically dismantling most of those protections, despite knowing exactly what's going to happen. (Hint: it rhymes with 'huge, uncontrollable corporate behemoths owning all the means of production, channels of communication, and legislative agendas').
Of course, every generation seems to have its insane economic ideas. My great-grandparents had Communism. We have whatever you call the squirming progeny of identity politics brutally inseminated by Reaganomics.
But it is a better "military" tactic than an economy based on David defeating Goliath.
It's worth noting that the USSR's model was also ridiculously inflexible, and the whole idea of a "5 year plan" probably sounded silly back then too.
Wal-mart hosts many Coinstar machines, but I have yet to see one that will produce Amazon gift certificates. You have to go to Coinstars hosted at grocery stores for that. So, they have a contract with Coinstar that specifically mentions which firms may have gift certificates on Coinstar machines.
Who knows, this may be a boon for the grocery stores?