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Hyperscalers tackle supply chain resilience

Microsoft and AWS unveiled supply chain management platforms that are intended to enable businesses to build capabilities in their clouds and tackle supply chain problems.

Hyperscalers have set their sights on improving supply chain resilience, with both Microsoft and Amazon recently unveiling competing platforms.

Just two weeks after Microsoft debuted its Azure-based Supply Chain Platform, Amazon followed suit with the new AWS Supply Chain. Both platforms are designed to orchestrate data from a company's existing ERP and supply chain applications and deploy the hyperscalers' technologies to analyze data and provide capabilities to act on supply chain issues.

Microsoft and Amazon have similar approaches in how they use their existing infrastructure and cloud applications as well as an agnostic approach to enterprise data sources. Microsoft Supply Chain Platform, which is available now, uses Microsoft Azure, Dynamics 365, Microsoft Teams and Power Platform as the building blocks for customers to orchestrate data, create workflows and analyze supply chain operations. A core component, the Microsoft Supply Chain Center, serves as a control tower for supply chain data and analyses and is currently in preview.

AWS Supply Chain Platform is powered by AWS cloud platform technologies and provides a data lake to orchestrate data, machine learning to enable analysis and recommend actions, and collaboration capabilities. The AWS supply chain platform is currently in preview, with general availability expected in early 2023.

Google Cloud Platform hasn't announced its own supply chain resilience capabilities. But it provides supply chain and logistics services to customers. Earlier in 2022, Google Cloud Platform came out with the Supply Chain Twin, a digital twin of a company's physical supply chain.

Analysts said the virtually simultaneous rollouts make sense given the need for beefed up supply chain resilience and the hyperscalers' capacity to manage the growing amounts of data that stream through supply chains.

Orchestrating supply chain data

Hyperscalers understand that they can play a critical role in organizing all of the supply chain data within an enterprise and "platformize" it to help navigate ongoing supply chain issues, said Dan Newman, principal analyst and founding partner at Futurum Research.

Specialized supply chain management (SCM) applications provide enterprises with useful data but have usually operated in silos whereas cloud platforms can better facilitate data integration, he said.

"At the platform layer, the data can be ingested or moved between public cloud, on premises, edge, and used as needed for the applications that are specific to supply chain," Newman said. "It can also use other transactional data and operational data that's valuable to help manage the supply chain."

Supply chain platforms offer hyperscalers an opportunity for even greater stickiness, he said. For example, the AWS supply chain platform means that a company already on AWS -- or leaning in that direction -- doesn't have to go to Azure to solve supply chain problems.

"Having that competitive moat and the flanks protected is just something to make sure you keep your customers with you," Newman said.

AWS' move into supply chain was not surprising, agreed Balaji Abbabatulla, senior director at Gartner. But the question will be in how the hyperscalers differentiate their offerings.

Details of the AWS platform are lacking, however, and the unveiling may have been rushed to quickly follow Microsoft, Abbabatulla said.

"I suspect that there's more to come from AWS supply chain beyond data aggregation," he said. "Amazon should be able to deliver much deeper supply chain orchestration capabilities based on the supply chain knowledge of their retail business."

This shows the four types of supply chain analytics.
Types of supply chain analytics

AWS' timing may be suspicious, but it's expected that the platform will be competitive with Microsoft's, according to Simon Ellis, vice president at IDC.

"AWS may be farther along than we suspect," he said. "Just because they haven't said anything until now doesn't mean they're not working on things behind the scenes -- because that's what they do."

AWS may have some competitive advantage with supply chain software because it doesn't have the application stack that Microsoft has, he said.

"The fact that they're not wedded to an ERP gives them some flexibility and agility, which is an advantage," Ellis said. "The trouble for Amazon is that no retailer is ever going to use them for that, as we already see most of them trying to avoid AWS for hosting. So that limits them a little bit."

The intent for Amazon is not to compete with ERP vendors that have supply chain capabilities like SAP or Oracle, or SCM vendors like Project44 or FourKites, he said, but to host entire supply chains on AWS.

Hyperscalers to avoid transactional side -- for now

The cloud hyperscalers are getting into the supply chain business because there's a need to reconfigure how the global economy is working, said Joshua Greenbaum, principal at Enterprise Applications Consulting.

"That has to do with supply chain resilience and changing the whole concept of how you deal with demand and supply in multiple industries," he said. "The highlight of both the Amazon and Microsoft approach right now is about trying to tackle the data problem."

That has to do with supply chain resilience and changing the whole concept of how you deal with demand and supply in multiple industries. The highlight of both the Amazon and Microsoft approach right now is about trying to tackle the data problem.
Joshua GreenbaumPrincipal, Enterprise Applications Consulting

Greenbaum also believes that Amazon and Microsoft will likely leave the transactional side of supply chains to vendors like SAP, Oracle and Infor. But they may pose a threat to concepts like the SAP Business Network, which is aimed at connecting up companies' supply chains, or other multi-enterprise networks.

"This may be the first salvo in the battle of who's going to run these business networks," he said. "Microsoft and Amazon are being very opportunistic -- Amazon even more so because it has a stake in logistics -- and they're competing heavily against logistics suppliers."

Ellis said while hyperscalers could threaten SAP Business Network and other B2B networks, it's more like they will act as a beefed-up control tower or provide the underlying infrastructure.

"I don't see what AWS, Microsoft and Google are doing as directly competitive to SAP at the moment," he said. "That could change. But I could see SAP Business Network or a similar network like TraceLink being hosted on AWS, which may actually be advantageous for those networks."

Jim O'Donnell is a TechTarget senior news writer who covers ERP and other enterprise applications for TechTarget Editorial.

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