Walmart gaining on Amazon using big data and massive new server farms

walmart sign

Walmart has been experiencing accelerated growth in its online shopping revenues over the past three quarters, according to a report on the Reuters website. 

The news agency suggests that the main reason for the retail giant’s recent success in cyberspace is due to the massive investments it’s been making in data centres.

Walmart has constructed “six giant server farms, each larger than 10 football fields”, reports Reuters.

A server farm, as the term suggests, is simply a large collection of servers; while a data centre is a building or facility in which servers and other computer hardware and peripherals are located.

The servers Walmart is using are said to be proprietary, meaning they were custom-built, although they probably don’t feature any branded components.

Walmart is certainly large enough a company to be able to afford own-brand computers of any type, but it doesn’t seem to sell any to its customers.

Maybe it’s a product area the 55-year-old company will venture into, now that it’s online presence is growing.

Looming large in cyberspace is, of course, Amazon, which, alone, reportedly accounted for 40 per cent of all online shopping orders in the US over the Christmas period.

Amazon is generally thought to be the world’s largest online retailer by some distance.

Walmart, meanwhile, is probably still the largest brick-and-mortar retailer in the world, but until now its online business was relatively small.

It’s probably still small, but what’s different now is that the company is paying more attention to – and putting more money into – its online operation.

Walmart CEO Doug McMillon last year claimed the company would “invent the future of shopping”, and announced a recruitment drive to enlist more data scientists, machine learning engineers, and mobile app developers.

“We’re going to make shopping with us faster, easier and more enjoyable,” said McMillion.

“We will compete with technology, but win with people. We will be people-led and tech-empowered.”

The company’s utilisation of big data and artificial intelligence will encompass far more than selling things – the new tools will also be used to analyse Walmart’s entire business process.

The whole idea of the new technology at Walmart is to provide a foundation – a computer network – which integrates all parts of the business, including its customer service aspect.

How it will fare against Amazon – which has built up many years of experience in the sector – is probably dependent on how well it uses the technology.

It certainly doesn’t have any money problems – it’s not like it can’t afford to build more data centres, or add more servers to the thousands it already has.

Walmart’s revenue for 2016 was reported to be $486 billion, which is more than twice the revenue reported for Amazon, at $178 billion.

But bigger companies than even Walmart have taken the easy option of going to Amazon Web Services to provide cloud infrastructure instead of building their own because they don’t think building data centres and operating and maintaining servers is central to their business.

Which is sort of strange when you think that almost every business these days is built on computers in some way or other.