Using assets: the new Walmart company has lessons for all of us

In a world that is becoming increasingly competitive, your best competitive asset may be the one you already own.

Image: Arkadiusz Warguła, Getty Images / iStockphoto

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

All those things seem a bit strange compared to the battle that Amazon and Walmart are locked in, an affair that extends from how we shop to how companies buy IT. In the latest version, as described in a recent article in the Wall Street Journal, Walmart plans to use its most striking asset in a unique way: its ubiquitous stores turn into data centers optimized for edge computing.

SEE: Special function: autonomous vehicles and the company (free PDF) (TechRepublic)

Edge computing
is the concept of bringing computer resources as close as possible. Instead of centralizing servers and storage, they are at the “edge” of the network, close to the consumers of those services. For those unfamiliar, this may seem to conflict with years of best practices in designing data centers; technologies such as autonomous vehicles, image recognition, high-speed trading and transport planning, however, turn some of these ideas upside down. Imagine a self-driving car that detects an unknown object on the road and requires extra computing power to determine whether it is a giant boulder or a cloud of fog. The milliseconds required to send this transaction to a remote data center may be the difference between life and death for the driver.
5G
networks promise cheap, fast connectivity everywhere and if the computing capacity is a few kilometers away instead of in another state or continent, new applications and services become possible.

Reconsider your equity

Although Walmart is probably one of the few companies with the scale to build a cloud computing infrastructure similar to that of Amazon, it would be a huge investment to play a difficult game on a busy field. Walmart would not only compete against Amazon, but also compete with Google, Microsoft and a large number of other players. I have no prior knowledge or connection with Walmart, but at some point I would imagine that they had taken a good look at the assets that they already had and tried to identify unique opportunities with which they could offer something different and unique to the market , instead of trying to beat Amazon and others in their own game.

I remember reading case studies about university Walmart, and early acceptance of new store-level technologies ranging from early satellite-based video conferencing systems with which founder Sam Walton could communicate daily with his stores across the country, to investments in payment processing technologies to speed up transactions. Probably every Walmart store already has robust connectivity and a well-designed infrastructure. While the move may seem outside of Walmart’s core business, it is sometimes easy to forget that Amazon’s cloud offering was originally designed as an internal support infrastructure that the company ultimately decided was attractive and robust enough to sell to others. In this context, Walmart seems to transform the mini-data centers at each of its locations from a back-office capability to a commercial offering less like a strange experiment and more cleverly exploiting an asset.

Most companies have under-utilized or “lazy” assets. These can be fairly clear, such as unused capacity designed to support periodic business flows. It can also be more subtle, such as a feature designed for one set of customers, which can actually be better used by another set of customers or even an entirely new market. Your company may even have a unique skill that can 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 takes its ability to conduct major offshore construction projects around oil and gas exploration and extraction to build offshore wind farms.

Every company carries out periodic strategic planning, but it is often designed around expanding and optimizing opportunities or building new ones. Companies often emphasize how they can use the assets they already have and probably spent years and significant financial expenditures. As technology leaders, we need to examine our existing capabilities with a view to applying them in new ways. That can be as simple as regularly redistributing spare computer capacity, or just as innovative as stores turn into edge computing data centers, and everything in between.

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