Recent strategic moves by some of the key US retailers continue to prove that the CPG industry is fragmented and in need of a “re-boot“.

Walmart recently reported that they are making investments in technologies to support their mission to compete in the cloud market.  The first investment was in chip technology by Nvidia, Walmart Taps Nvidia for Massive Cloud to Take on Amazon, to power their cloud offering.  In order to differentiate they are investing in Nvidia’s graphical processing unit (GPU) technology that contends to be optimal for crunching large datasets for machine learning.  Walmart’s focus is on a concept called Neural Networks which are algorithms that are wired to mimic how a human learns.  The second investment is in a program called OneOps, Walmart wants to help unchain companies from their cloud.  The intent of this technology is to provide companies with an easy process to move data between cloud infrastructure.  WalmartLabs contends that they built this “open source” technology for all companies to use.

The CPG industry does not need another cloud provider that will not be able to showcase a new chip technology in the cloud for years.  It definitely does not need a new proprietary, closed technology to move data between clouds.  The continued approach of influential leaders in this industry to make decisions that benefit their companies vs the industry will contribute to continued fragmentation.  Companies will not be able to grow and innovate.  They will continue to spin up new investments to stay current with new technologies and processes.  As an example, Target is plotting a big move away from AWS, which will likely cost the retailer and it’s partners millions in re-investments.

Leaders in the CPG industry need to transform to open, collaborative cultures with a focus on driving efficiencies and innovating the overall industry.  This approach will drive new partnership and ultimately benefit the industry and the companies that commit to this approach.

As an alternative for consideration….

• …what if Walmart partnered with an existing cloud provider and invested in transforming existing nodes to the GPU chip technology?
• …what if WalmartLabs collaborated with the top cloud providers to joint-develop a data sharing concept that allowed companies to pick a cloud provider to manage their core datasets and access the other datasets across clouds?
• …what if Walmart made a commitment to the industry to make it easier for all of the companies to store, share, and access their data in an open, collaborative approach?
• …what if Walmart was recognized as the industry transformation leader?
• …what if Walmart continued to grow & innovate with minimal new investment which allowed their customer to minimize any new investments?

At CPG Cloud Partners, we help companies in the CPG industry transform to open, collaborative cultures.  We believe that it should be a company objective to invest and commit to innovating the industry.  We realize that this industry has not experienced a transformation of this magnitude for decades.  We also realize that the current landscape is prime for this transformation.  We would like to hear your thoughts and feedback on the points of view in this article.  We welcome your perspectives and interests.  Feel free to comment or contact us directly.