Leveraging assets: Walmart’s new venture has lessons for us all

There have been a number of corporate battles over the years that have taken on epic proportions. In my lifetime, stories like IBM vs. Apple, Coke vs. Pepsi, and Apple vs. Microsoft have taken on the scale of the latest Hollywood blockbuster, each filled with superheroes and villains and regular plot twists. 

All of those seem somewhat quaint compared with the battle in which Amazon and Walmart have been locked, a multi-front affair ranging from how we shop to how companies buy IT. In the latest twist, as relayed in a recent Wall Street Journal article, Walmart is planning to leverage its most distinct asset in a unique way: Turning its ubiquitous stores into data centers optimized for edge computing.

SEE: Special feature: Autonomous vehicles and the enterprise (free PDF) (TechRepublic)

Edge computing is the concept of putting computing resources closest to where they’re used. Rather than centralizing servers and storage, they’re located at the “edge” of the network, close to the consumers of those services. For the unfamiliar, this may seem to go against years of best practices in data center design; however, technologies like autonomous vehicles, image recognition, high-speed trading, and transportation planning are turning some of those notions on their heads. Imagine a self-driving car that detects an unfamiliar object in the road and requires additional computational power to determine if it’s a giant boulder or a cloud of fog. The milliseconds that it would take for this transaction to be sent to a distant data center could be the difference between life and death for the driver. 5G networks are promising cheap, fast connectivity everywhere, and if compute capacity is a couple of miles away rather than in another state or continent, new applications and services become possible.

Rethinking your own assets

While Walmart is likely one of the few companies with the scale to build a cloud computing infrastructure to rival Amazon’s, it would be a massive investment to play a difficult game on a crowded field. Not only would Walmart go head-to-head with Amazon, but would be competing with Google, Microsoft, and a host of other players. I have no inside knowledge or affiliation with Walmart, but I would imagine at some point they took a hard look at the assets they already have, trying to identify unique capabilities that would allow them to offer something different and unique to the market, rather than trying to beat Amazon and others at their own game.

I remember reading case studies about Walmart in college, and its early adoption of new technologies at the store level ranging from early, satellite-based video conferencing systems that allowed founder Sam Walton to communicate with his stores around the country on a daily basis, to investments in payment processing technologies to speed transactions. Presumably each Walmart store already has robust connectivity and well-designed infrastructure. While the move might seem well outside Walmart’s core business, it’s sometimes easy to forget that Amazon’s cloud offerings were originally designed as internal support infrastructure that the company ultimately decided was compelling and robust enough to sell to others. In this context, Walmart turning the mini data centers at each of its locations from a back-office capability to a commercial offering seems less like a strange experiment and more like a smart way to leverage an asset.

Most companies have underutilized or “lazy” assets. These could be fairly obvious, like unused capacity that’s designed to support periodic floods of business. It could also be more subtle, like a capability designed for one set of customers, which could actually be better used by a different set of customers or even an entirely new market. Your company might even have a unique skill that could be applied to other, very different industries. One of my favorite examples is Equinor (formerly known as Statoil), a large oil and gas company. Driven by environmental concerns, the company is taking its ability to perform large, offshore construction projects centered around oil and gas exploration and extraction to build offshore wind farms.

Every company performs periodic strategic planning, but it’s often designed around extending and optimizing capabilities or building new ones. Companies often underemphasize how they could further leverage the assets they already have and have likely spent years and significant financial outlays to acquire. As technology leaders, we should examine our existing capabilities with an eye toward applying them in new ways. That could be as simple as reallocating spare computing capacity on a regular basis, or as innovative as turning stores into edge computing data centers, and anywhere in between.

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