Amazon-Whole Foods integration plans revealed: One of the highest-profile retail and e-commerce-related acquisitions in years, Amazon's $13.7 billion purchase of Whole Foods Market, is set to close on Monday. In advance of that date, the companies have released some details of their integration plans.
Much attention has been paid to discounts that will be immediately applied to some best-selling Whole Foods grocery items, such as salmon, eggs, bananas and ground beef. This is an effort to shed Whole Foods' longtime, disparaging nickname, "Whole Paycheck." These price cuts and future ones will be enabled by the technology integration timeline, which the companies describe as the following:
In addition, Amazon and Whole Foods Market technology teams will begin to integrate Amazon Prime into the Whole Foods Market point-of-sale system, and when this work is complete, Prime members will receive special savings and in-store benefits. The two companies will invent in additional areas over time, including in merchandising and logistics, to enable lower prices for Whole Foods Market customers.
“We’re determined to make healthy and organic food affordable for everyone. Everybody should be able to eat Whole Foods Market quality – we will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards,” said Jeff Wilke, CEO of Amazon Worldwide Consumer. ... And this is just the beginning – we will make Amazon Prime the customer rewards program at Whole Foods Market and continuously lower prices as we invent together. There is significant work and opportunity ahead, and we’re thrilled to get started.”
A bit further down the road, Amazon Prime will actually become Whole Foods' customer rewards program.
POV: There are few surprises in the joint announcement. Amazon has long been prized for its competitive pricing and there was never any question it would seek to lower the cost of shopping at Whole Foods. However, it is also clearly going to take pains to preserve Whole Foods' culture, wanting to retain its valuable pool of higher-end shoppers.
Whole Foods' brick-and-mortar presence in hundreds of heavily populated areas was another big reason for Amazon's decision to buy it, as the locations provide additional density to its supply chain footprint. To that end, the companies announced that "select" Whole Foods stores will have Amazon lockers, where they can pick up Amazon.com items ordered online or return them. Constellation believes that this is just a start, and over time more real estate within Whole Foods stores will be devoted to Amazon.com-related purchasing and returns.
Marketo teams up with Google Cloud: Another SaaS vendor has decided to rely on a public cloud provider rather than run its own infrastructure. Marketing software vendor Marketo has signed a multi-year deal with Google Cloud Platform that will also see an integration between Marketo's tools and Google G Suite and data analytics.
Marketo's marketing automation software will "run end-to-end" on Google Cloud, and Google, an existing Marketo customer, will also expand its usage of the product. Moving its infrastructure will give Marketo, which was acquired last year by Vista Equity Partners for $1.79 billion, more resources to focus on product innovation. In addition, Marketo plans to leverage GCP's machine learning capabilities.
POV: The integration of Marketo and Google's ad analytics will have some strong synergies, says Constellation VP and principal analyst Cindy Zhou. "This provides customers a unified view of marketing campaign and advertising ROI," she says. "Historically, customers have bought ads separately through an ad network, or through Google directly, and it has been a siloed process of ad data and marketing campaign data. There has been no easy way to look at holistic campaign ROI. Companies either manually try to consolidate the data or rely on agency reporting."
Examining VMWorld 2017: In just a few days, VMWare's WMWorld conference will kick off in Las Vegas. The show comes days after the company reported strong second-quarter results, with revenue up 12 percent to $1.9 billion and net income rising 30 percent to $334 million. Here are some of the things you can expect VMWare to discuss at the event.
- VMware and Amazon Web Services: Last October, VMware announced that it had chosen AWS as its public cloud provider, with the intention of creating a hybrid cloud offering that spans on-premises VMWare deployments and AWS, without having to rewrite applications. (Go here for Constellation VP and principal analyst Holger Mueller's deep-dive on the announcement.) At the time, VMWare said the offering would be generally available in the middle of this year; during the earnings conference call, CEO Pat Gelsinger didn't provide many specifics, but indicated the AWS deal will be a big focus at VMWorld. In response to a question, Gelsinger also characterized Microsoft's Azure Stack, which stands to provide stiff competition for VMWare in hybrid cloud, as taking a less customer-friendly approach.
VMware's AWS integration will allow customers to "seamlessly extend their position to the AWS environment as well as to be able to consume additional AWS services in a very effective manner," he said. "In contrast Azure Stack is about bringing Azure on premise, so it's really many respects the opposite and it's asking customers to fork or create a heterogenity in their on-premise environment just to take advantage of some services that they may want to consume from Microsoft."
- Cloud customers in abundance: Thirty VMWare cloud management software customers will appear at VMWorld next week and at its companion event next month in Barcelona. They include Credit Suisse, Box and Polaris Alpha. Topics to be covered include operations monitoring, capacity planning and network management. While vendor executives and product managers are highly knowledgable about their products, customer stories told in their own words are crucial fodder for any enterprise conference. It appears that VMWare has done a solid job of pulling together a lineup.
- Future directions: On the earnings call, Gelsinger noted the introduction in May of Pulse IoT Center, for managing, securing and monitoring IoT devices. "IoT and edge specific solutions are being developed with key strategic partners including Fujitsu, HARMAN and EuroTech, as customers look to VMware to help extend the capabilities of the datacenter to the edges of their businesses," he said. Gelsinger also revealed that VMWare and Fujitsu are helping Toyota create a "next-generation in-car platform." He didn't offer any specifics, but those could come during VMWorld keynotes and sessions next week.
