Lidl to Launch Rival to AWS
chargedretail.co.uk
chargedretail.co.uk
The company made SO much money in the past 4 decades with big box / discount retailing, you won't believe it. Salaries are off the charts (it would make senior software engineers in SV look pale). Hubris is as well. The only thing that drives reasoning are statements like 'we're not just some random company, we're Schwarz Group'. It's the poster child Corp described by Andy Gorves statement: Success breeds complacency, complacency breeds failure. Only the paranoid survive.
At the same time, skill level did not take off so much. Just to give you some insight: The Lidl online store team is not even aware of KPIs like CAC or LTV or even how many new customers were acquired in a given year. And it's a 10-year-old unit (still burning millions per year) .
The whole corporation is basically a 2-person-empire (the only two people that own shares and have taken the thing from 1 store to ~13k stores globally). They make every major call, and even random minor calls. It should be mentioned that they are 72 and 80 years old, respectively.
The Cloud idea very likely was acquired together with a former SAP cloud sales VP. Here is the difference: Core Schwarz DNA is selling packed soup to end customers at crazy scale, without even intervening in the whole process. Core DNA SAP is large scale enterprise sales. Go read the Stratechery posting about why Google failed with GCP to understand why Schwarz should not do this. When I once mentioned this in a LinkedIn thread, I was urged by colleagues to delete the comment because 'management did not like it'.
They are getting into the car sales and recycle business as well. Just to give you an impression.
Interesting times though :)
Just to add another data point, Lidl is also the retailer that pays the best market salaries in the Eastern-European country where I live in (they actually included that in several of their hiring ads), and I'm talking about shop people like cashiers and the people that put things on the shelves.
> They are getting into the car sales and recycle business as well.
In here they've also opened a tourism agency that does quite well (or used to do before the virus hit).
I agree though about the big difference between the German and US management. I have a close friend that works at the regional Lidl HQ and she got reprimanded just after being hired for having used the singular "you" (less formal) instead of the plural "you" (I'm not sure how it translates into German) when addressing herself to her bosses on the company's hallways (said friend used to work for a big US company before moving to Lidl). She was lucky though because not a week after her arrival there was a company-wide email coming from the powers that be instructing the employees to use the less formal singular "you" instead of the more formal plural "you", to which all the employees in the company acquiesced.
Not everyone wants such an intense job. So I am not sure it is a good idea to force eg other retailers into the same strategy. They already have Aldi and Lidl to compete with on the labour market, so there's already opportunity for workers to get higher pay, if they want to make that bargain.
Yes, in German it’s a big deal, roughly the same as saying “Hey dude” instead of “Good morning Mr Smith”.
It's been changing for decades across a lot of languages. I grew up in Norway where these forms were dying out as I was a child (70's/80's) and mostly used to older people, to the point where they're now mostly used sarcastically to imply someone is a pompous ass or to very old people or in very formal situations. But go back another decade or two and it was common.
When I moved to the UK in 2000, even that was a weird shift up for me in formality (being called "sir" in shops, and having people actually use "mister" in front of my last name) compared to Norway.
But by the 90's my French and German teacher had both insisted we learn to use the formal forms but also both told stories about how that would already then sometimes make you seem old and stuffy, and to listen for what others said and if in doubt ask and to roughly assume we could get away with the informal form with our own age group and younger but default to the formal forms for older people just in case.
My own experience has been that most people I've met in Germany on business trips mostly have thought I've been more formal than necessary at first and told me I can use "du", because I've erred on the side of caution, but it's also varied a lot by location and age group and situation. Since I use my German relatively I'd rather start out too formal than misjudge the situation the other direction.
I am saying, it was, because starting the late 90s with the spread of Internet and pseudo-anonimity all this just became outdated -- you had no idea whom you are talking to so observing the old rules were impossible. And those who have grown up with this simply didn't bother learning the rules. For me, when I was 18, it was a Big Deal that at our high school graduation party our class leader teacher allowed everyone to switch from formal to informal. It was basically the only time in my life when something like that happened, then I started using the 'Net shortly after (all this was in '93) and this stuff was just washed away.
With people my age I would probably always use the informal Du, but only in informal situations. In case of formal interactions, as part of a business transaction, etc. I would probably always go to the Sie if I didn't know the person and would expect the same in reverse. Anything else would probably be perceived as lacking respect. English doesn't have anything equivalent except maybe first name/last name basis, so it's always hard to explain to Americans.
Of course, as a foreigner things are always less strict and one gets some slack for not speaking the language perfectly.
Maybe more comparable to addressing someone by their first name instead of Mr./Ms./Mrs. <last-name>.
Similar in Sweden 50 years ago.
Either way nobody who isn't an asshole will get a non-native speaker in trouble for mixing these up & even in Austria my experience was that they will just be a bit perplexed but continue speaking as if the "du faux pas" didn't happen.
I guess I expected cultures to be similar in who gets the polite treatment, but they're really not.
This "Du/Sie" thing is a local shit test in Germany in my opinion. Comparable to what I experienced in strictly hierarchical enterprises like Sony US in the early 2010th, where at least one Senior Manager would only talk to an employee directly, instead only to her senior manager (same level BS).
Informal is owning the workforce finally, it is on the rise, and you can use it as a shit detector. People who value hierarchy over merits will refer to these manners. Others not. :)
Coming from a country in which the so called formal form changed significantly in the last decades and is now reserved to people you don't want to get along with (that's how politicians refer to members of other parties, or how customer support starts to address you after you tell them that you want to quit the contract), I always ended up using the informal form, which translated into many funny stares.
Sounds reasonable. If someone did the same to me in a professional setting my instinct would be to treat it as an intentional lack of respect. Albeit my language is French (but it functions the same as German in that case).
Just to add another data point: in the small town when I come from (southern italy) the Lidl store was a total failure and a complete mess. They acquired land built the whole building, opened short of staff, operated briefly (always short on staff and with a huge turnover) and then had huge problems with (afaik) the legality of the contracts for employees and allegedly employee mistreating.
That Lidl store didn't last long, to put it nicely, and the building is still on sale many years after that.
Are Germans usually this strict about language in a professional setting? I am from the USA but worked for a company with offices in Germany for a couple years. They were formal in some ways but also made many jokes that could get you fired in the USA. Maybe my experience was the exception.
If they talk formal, run. It's most likely a shithole.
This level of formality between people I find very patriarchal and outdated. Also, with people you just met it becomes somewhat awkward to always ask for which formality to use. English is doing very well without it.
Using "du" instead of "Sie" for adressing people can be a very serious issue. If you do this to a policeman, for example, you can be fined by typically 600 € in Germany (source: https://www.bussgeldkatalog.org/beamtenbeleidigung/). To give an analogue in the English language: you wouldn't address your boss with "yo nigga". So I believe the reprimand was rather rightfully.
A rule in the German language is: in doubt, use the more formal language register. The "default language register" in German is typically "one register more formal" than the "default language register" in English.
Overall, using "du" is acceptable in 90% of social interactions. It's only when talking to people in higher positions or as a courtesy to elderly / unfamiliar people.
Not even close, not even close. Why would you even write this? This must be a dog whistle.
Edit: that link you posted justs lists the €600 as "this happened once and depends on income of offender", also there is no source.
In addition, the intro paragraph says
> Es gibt jedoch bei Beleidigung keinen „Bußgeldkatalog“. Vor Gericht wird der Straftatbestand der Beleidigung verurteilt.
which translates to there is no schedule of penalties but it all depends on the statutory offence. So my understanding is there was a criminal offence that included an insult (saying "Du") which was mentioned in the report but not the cause for the fine in the first place.
Fun offtopic fact: The default register in English is actually more formal than most people realise. English had "thou" as the informal second person, and "you" as the more formal variant, but "thou" died out, leaving only the formal register. Curiously enough, Brazilian Portuguese underwent the exact same phenomenon, so they use "você" informally, whereas European Portuguese uses it as the formal second person.
In France, there's a soft tendency to use the plural you ("vous") a lot more because of the more rigid French class system. In Quebec it's seen as a snobby thing to do due to the more working ass culture.
That said, in neither country would anyone ever get a monetary fine for using one over the other. That's crazytown
Are they not well advised by their localization partners?
Are you crazy? This is not anywhere close to saying "du".
It must be taught since it's a part of the language, but I almost wish non-native German students could skip the "du" tense entirely, if it's that much of a faux pas to use it in the wrong scenario.
This is exactly what I have guessed. Many people think that replicating AWS is just the question of money. It is not. Most of the great datacenter people are hired by AWS, MS and Google. These are the guys who can think of cost efficient reliable solutions, quite often inventing new things in the process that the outside world has no idea. I was watching countless videos while working for Amazon about the data center tech. Mind blown, every single time. I seriously doubt that the Schwarz group will be able to attract the talent to replicate this. Many of the AWS guys are life timers, do not care about money. What is a more likely scenario that they will burn through a few billion EUR before realizing that they know nothing about cloud computing and cut their losses.
It is going to be interesting to watch though.
I've heard, anecdotally, that Amazon/AWS engineers tend to be more money-driven than others in the same tier, or at least they're willing to put up with a lot more headaches because of the money.
Is that a misconception?
If not money, then what keeps them there?
Google definitely seems to have the better working conditions. The impact on the world you have is probably similar. So relatively speaking, I'd expect people at Amazon to be into it for the money more.
Both had amazing starting salaries - I think Aldi was £48k rising to £70k over 3 years if you went on the area manager scheme. Plus a car. The teams there were so enthusiastic and energised and appeared to really really enjoy their jobs.
I am impressed by any company that consistently looks after their staff financially and otherwise.
I have a hard time believing this, given that senior engineers at places like Google or Facebook are making 300k+.
So they are largely comparable to SV salaries at Google/Facebook. Which means since Google/Facebook pay more than average, they are above average for SV.
And that's at places like Berlin which are cheaper to live than SV.
This is true even for the senior engineers, at around half the compensation or so; for the principal engineers and directors, working somewhere like Google or FB gets you 3-5x what's quoted for Lidl.
> So they are largely comparable to SV salaries at Google/Facebook
This is completely wrong. Compensation for senior engineers at Google/FB is around 350k USD: https://www.levels.fyi/#
> And that's at places like Berlin which are cheaper to live than SV.
Agreed. Nevertheless, the salaries aren't going to make any senior engineers in SV "pale", when they're half as much.
But most of the Jobs aren't in cities like Berlin. Most of them are at there HQ in Heilbronn or near it. So the cost of living is even lower.
Big problem in German enterprise.
They don't have any IT skills, but much money and are constantly crying for "digital transformation" what usually only leads them to being conned by big consulting agencies.
- Brain-drain, likely (US vs German salaries is a joke) but also likely offset by brain-gain from other places (in my experience only Scandinavia, Netherlands and Switzerland beat German salaries, lately)
- safety-seeking culture draws the wrong people to the big corps. The more of them there are, the worse productivity and innovation gets.
- because of their appeal to masses of safety-seeking underperformers wages at German blue-chips are usually noticeably lower than at consultancies or Mittelstand, pushing away even those few talented they did recruit
- keeping talented and motivated people long-term is even harder because if enough of the wrong there are, you’ll often have strictly defined career-options, so that e.g. after 10 years you cannot possibly get another raise unless you stop engineering and do Inner-corporate bureaucracy work.
- I’ve seen niches in these companies where people shield their team / unit from that mess, pro-actively outsmarting the corporate machine (e.g. hacking the hiring process, securing backing from CEOs, pushing for technological visions...) Those units have a big draw on inner-company talent, but are limited in how much talent they can take into care. Working there is very pleasant. As maybe highlighted by the fact that these guys are more likely aware that their pay is an insult, but they stay regardless.
It's just a cultural thing. Germany has tons of family-owned businesses with a fairly conservative ethos that manage to do well in spite of complete technological illiteracy.
Their IT was an absolute joke back then, we had to use a 20-year-old ERP and most of the work was done on paper. Thinking that these guys could take on AWS sounds ludicrous to me. However, they are cost-killers and hyper-aggressive when it comes to selling, so this might even work...
I believe you meant https://stratechery.com/2019/the-value-chain-constraint/
Are they?
I received few offers from them and their salaries where in par with what I earn in Italy (around 100k) which is very good for Europe but not as much as SV
Most Italians I met working in Austria and Germany left Italy because of low salaries and they're not making anything close to 100k here either.
I've even met Italians who moved to Eastern Europe for higher tech salaries than back home so something doesn't add up.
I'm a senior developer who works on distributed systems for one of the largest Italian private held financial institutions.
To be completely honest I know almost nothing about finance, I just know how to make reliable software for them.
I've been there for almost 4 years now, I started as a contractor but they offered a substantial yearly bonus to the base salary so I accepted the hiring proposal.
Before that I've been an independent contractor for more than a decade and at the end I was making a bit less but not far from that. I mainly worked for overseas companies remotely (a few times I went over there for short periods - weeks or a couple of months) or in agencies here in Italy that worked for the fashion industry.
Must say it all changed when I moved to Milan, I could dream this kind of salary in my birth city (Rome)
Sounds very similar to Dyson. The biggest problem is that nobody wants to make decisions because what's the point when James Dyson is just going to come along and casually overruled it? Especially frustrating if it's something he isn't interested in.
They were also supposed to get into housing.
To be fair, the recycle business is basically "free money" in Germany.
Even more sad, is when you search and try to find better sources, and realize that it's mostly just a few small, outlier publications, copy and pasting off of each other. Business Insider unabashedly copy and pasted from Charged Retail, and didn't even bother to format/ edit/ paraphrase anything. Even text from the link to sign up for the Charged Retail news letter is in there (https://markets.businessinsider.com/news/stocks/lidl-owner-l...).
So the way I see this, there is no story here. This is not real news. This is a rumor. Maybe even fake news. Nothing more, so let's stop talking about it.
Then that gets picked up by intermediary news sites like this *.co.uk domain. Then it gets floated to social media, where it gets popular and noticed by the big guns (NYT, Business Insider, Tech Crunch, etc) and then they just post the same stuff. Then suddenly what was once a rumor becomes true.
it's not copy pasting. BI is also a publishing platform.
Same reason why you see Bloomberg articles in full being posting on Yahoo Finance.
The commentary is what makes this interesting, not the content of the article.
To be fair, you're probably right. The commentary is the most interesting part, even if the content is just a rumor, or hypothetical or whatever. There is still some value to be had from the threads. I saw a lot of experiences or personal info shared here about Schwarz Group, so some of that was interesting.
Yes.
- Logistics in Germany is awesome, and Amazon really doesn't have a leg up on the already existing logistics solutions there.
- For a cloud provider, negotiating deals now when AMD is on the rise must be perfect.
- Beating AWS on EC2 pricing is easy. AWS EC2 pricing is insanely expensive. German providers like Hetzner Cloud entered the market at 1/10th of the EC2 price.
- A k8s-focused cloud provider gets an enormous number of already existing k8s services without the need to compete directly with all the AWS services.
A "Hetzner Cloud" + K8S in Germany? I'd move all my stuff there.
Don't get me wrong I love Hetzner and their cloud offering and I think they're doing a fantastic job, but it is not comparable to platforms like AWS, Azure or GCP. It's good enough for simple use cases but I think most large companies that want to switch from on-premise would have a hard time adopting it since so many crucial features are missing.
The LIDL cloud will have the same problem I think: They will probably build it on top of OpenStack or Kubernetes but will never reach feature parity with AWS, Azure or GCP. I think in their niche (retailing, logistics) they might be able to get some good adoption if they offer specific services and infrastructure based on their own use cases and experience, but this isn't really competition for AWS, at least not in the broader sense.
I would think that an honest setup supported by k8s would, at least alleviate the need of managed solution?
Are there AWS services without a competitive open source solution deployable in k8s?
For example, I can deploy Kafka on k8s. I still need to know enough about Kafka to be able to deploy it correctly (zookeeper, etc.). I need to know enough about k8s to know how Kafka can run on i and to fix issues. I then need to know enough about Kafka itself to tune it, fix issues, manage it, etc. Then there's interaction events such as upgrades which require coordinating between k8s and Kafka. And in the end I'd still be a novice at all of it.
This part is just not accurate. I'm running their dedicated server with 256 GiB RAM right now.
But for their cloud offering the maximum is only 128GB RAM.
See https://www.hetzner.com/cloud and click on "dedicated vCPU". btw: do not confuse "dedicated vCPU" with dedicated server.
They seem to either not have much in the way of internal procedures or just ignore them if they exist.
As long as you're prepared for all of your data and backups to just disappear, it's a great low-cost environment.
If you expect their operational team to not accidentally delete your environment, it just hasn't happened to you yet.
Also, I'm quite surprised about this announcement. I knew LIDL was in a really good position, but to attempt to compete in the cloud market is impressive. Good luck to them.
Schwarz group doesn't. Most products won't compete with them.
Lidl is easier to keep in check. For at least WalMart (it's happening in Europe) and Aldi a fighting them on their home turf.
Everyone operating in the EU is under EU law, including Amazon, so it's certainly not a competitive pitch vs. Amazon, however much it might be on a checklist of things customers are looking for.
I'm not saying it's enough to build an AWS-sized business or that Lidl is in a position to do it but there are cloud hosts who sell themselves specifically on that, such Exoscale.com
There are absolutely companies who won't use Amazon due to concerns over things like that.
Also, it's a matter of culture, the native law context of a company drives a lot of the things they do internally.
When I worked with a European cloud host, customers in Germany demanded German data centres and EU ownership. I've seen enough people/companies ask for that to convince me there's at least some demand.
What's your reason for saying it's not a good differentiator?
One of the great strengths of AWS is their phenomenal compliance department - whatever regulations you're subject to, AWS offer tools, guidance and support to help you maintain compliance. That's one of many, many reasons why AWS is simply incomparable with cheaper cloud offerings from smaller providers.
I think after Snowden we should have gotten wise on how much official treaties and promises are worth. Before, this was the thinking of conspiracy nuts. Now it is prudent consideration.
Germans would now, the US literally wiretapped their head of government, and also ran operations to extract trade secrets. Without reprise to this day, by the way.
At end of the day, the new name of the game is America first. Having a EU company handle your data is really an advantage.
US laws and treaties come with and asterisks.
This has always been my problem with AWS. Cost savings might make sense for someone who actually needs 200 servers but if I just want one I'm paying 10 times as much for half as much in terms of performance.
It rubs me the wrong way when a $70/mo AWS instance is more than twice as slow than a $10/mo 'traditional' VPS instance.
Elastic compute of the type provided by EC2 and similar services (Google Compute Engine, etc.) is a fundamentally different service than simple VPS. AWS has something that is, or is very close to, a simple VPS in LightSail, and the pricing is pretty competitive with other VPS providers.
LightSail doesn't have a $70/mo instance, the closest is $80/mo for a 16GB RAM, 4-core, 320GB SSD instance with 6TB of transfer quota. The least expensive is $3.50/mo, and $10/mo gets you 2GB RAM, 1 core, 60GB SSD, and 3TB transfer.
What is the fundamental difference that you speak of?
At least to me, the only major difference is that while AWS markets their VMs as EC2 because they were designed for elasticity (i.e variable compute workloads), which explains the elastic in the name EC2; VPS providers OTOH market their VMs as a cheaper alternative to dedicated servers (i.e. fixed compute workloads).
The difference in pricing largely follows from the difference in design since the cloud shines when your resource needs are elastic. VPSes shine when your resource needs are largely inelastic.
Also, 6TB/month is a bit over a day of download at 400Mbps. It's barely even worth mentioning.
Sure, lots don't. Which is why, even if AWS is the right vendor, EC2 isn't the right service for lots of uses. That's why LightSail is a thing. Comparing VPS pricing to EC2 pricing to say AWS is too expensive is the wrong comparison, because of AWS services, EC2 isn't the one that any application that can be acceptable served by a traditional VPS ought to use. It's not an apples to apples comparison. It's not even apples to oranges. It's something like apples to pork roast.
Not really. AWS is largely independent service products with a few shared core services. K8s is just the core services.
Each AWS service is effectively its own product. Regardless of what tech you have in the background, you would have to make a complete product to compete with AWS's version. You would still have to build an entire customer interface and documentation and do product support.
Or you could build one giant monolith product that isn't decomposeable into services, and at that point you're no longer an AWS competitor, you're just another weird PaaS that enterprise won't touch. Enterprise is a whale, and you need whales.
Looking at k8s like it's a business solution is like looking at a wheel+tire and thinking it's a car.
The prime factor driving negotiations is volume. It is going to be hard to beat AWS on this front.
>> Beating AWS on EC2 pricing is easy. AWS EC2 pricing is insanely expensive.
This is simply not true. Taking into account everything you get with EC2 it is in par with other providers.
Factors:
- multiple (redundant) tier1 networking routes
- DDOS protection
- firewall
- redundant power (this almost never the case)
- access management that can easily be tuned to meet with corporate security standards
- network-attached storage that is very flexible with IOPS and size configurations
- multiple different hardware offerings that can match your workload
- elastic scalability (turn on when need more, turn off when no need)
- control over resource allocation down to AZ and shared/non-shared level
I am not saying that everybody needs these, but for those companies which do you won't be able to compete with a cheaper less powerful solution. These are the guys who can calculate what they are paying for and also know what they get, in detail.
There are so many moving parts in a datacenter that you can get wrong (and companies regularly do) that hiring the best dc engineers is going to be the first challenge when building an AWS competitor unless you have a James Hamilton clone stashed somewhere.
Linode, DO etc all have these features at a fraction of the price.
Multiple tier1 networking routes? I seriously doubt that. Those vendors won't deal with small players. AWS used to have 160Gbps in NA 10 years ago. EC2 has DDOS protection, for one simple reason, if somebody DDOSing it it will impact many customers. And you can also use Shield. The point here is that you have options. What sort of DDOS protection Linode or DO have? How much bandwidth did they get? How many tier1 routes? There are the sort of questions you need to ask for a fair comparison, which absolutely not happing on HN. Many people think that building a data center is like creating a hello world application. I have seen this repeadetly, several times.
So yes, really. Nothing on your list is unattainable at much, much lower cost if you're willing to put in the work at maintaining it yourself (no cloudformation at most traditional providers of this stuff, and while you can somewhat roll your own with k8s for /some/ stuff, the offering traditionally is nowhere near as cohesive.)
The non-open source but complementary services (think Dynamo/EventBridge etc) are imo AWS' real strength. If you need to be able to just throw cash at the problem and never worry about capacity management yourself, AWS (and GCP, and Azure, and <insert PaaS provider here>) is usually an excellent fit.
They are not streamlining retail processes because they earn too much money with it. They have great IT talent, which is building fancy pilots all day, but refuse roll them out because it will cannibalize their core business. Their core business is keeping people in the store for as long as possible so they buy more stuff.
On the logistics side, they have been the first large-scale retailer to digitize the EUR-pallets (they have RFID-based plastic pallets) which allows for some pretty fancy stuff.
They roll out their pallet processing tech at the suppliers' plant and have logistics data in their systems even before it is loaded on the suppliers' trucks.
That's the big difference I've noticed between German and US companies.
In German companies if you are an exec that brought success to the company in the past then your word is the law and focus is on keeping the status quo and make sure that any new ventures don't make existing higher ups obsolete.
Whereas in US tech companies innovation is the primary focus regardless if someone's division ends up obsolete and needs to be let go. Famous examples being how Netflix pivoted from DVD rentals or Tony Fadell, creator of the iPod who was tasked on delivering an iPhone prototype back in the day and failed as his team's design was basically an iPod based phone which lost in favor of the current iOS iPhone we all know today. During the live iPhone launch demo, Steve Jobs deletes his contact from the favorites list basically saying "you're fired" and the rest is history.
You won't see something like this in a German company where age and experience in the company is more valued than being a visionary for future market trends. That's why you'll never see the big German car manufacturers pull off a Tesla even though they have more resources. Can't pivot and cannibalize the current products and have to shit-can some famous higher ups that were successful in the past.
Not to nitpick your overall post, but let me explain the context better.
Netflix is named "Net flix" because the original plan was to offer a streaming product ASAP, but investors and end-users weren't ready at the time.
So mailing DVDs was done initially, and because of a loophole in USPS pricing rules, was a genius move when looking at cost. (Netflix historically has employed a former Postmaster General to stay on top of that.)
Source: worked there, read a bunch of stuff on this.
Edit: I found a few articles. Seems mostly a lesson on how you shouldn't have a government monopoly on the postal service in your country..
I think because of this more talent has moved to the cutting edge technology companies in the US than Europe wants to admit.
Consumer focused software is where the big money is now an that is unfortunately a huge vacuum in the German tech sector.
Lidl launching an AWS competitor is probably done on advice of their accountant. The big four are known to overpromised on the capabilities of their outsourced software division in India. When Google and Microsoft struggle to catch up to AWS with 10s of 1000s of the best engineers it is completely unrealistic Lidl is going to achieve anything.
This is a discount brand for crying out loud clearly on misinformed money waisting spending spree bender. The Germans will have a hangover like nothing else they have experience before.
Maybe exception to the rule but definitely an example of not being stuck in the past and it's a LARGE corporation.
They pulled out more Tesla's than Tesla will ever do, and they still rank on top of the carmaking industry.
Tesla, on the other hand, the first thing has done when they bought Grohmann Engineering was to stop the production for competitors, that led the founder to leave.
That's never a good sign for an established business.
That's the price you pay for having a "humanly deficient man" as a CEO.
Sorry, but Dieselgate would like to respectfully disagree with you.
Only 2% of the cars were sold in US
Of course the fact that US was leading the production of luxury electric cars has to do with the revelation being made public in 2013 while politicians and regulators have known for years
They were (illegally) accumulating money to invest in electric car manufacturing without having to "disrupt" the industry which has political consequences in Europe, where job places are highly unionised
I'm not saying they were right I'm saying that they were keeping the stability at any cost, they just sacrificed some upper manager after the scandal, and in fact 6 years later the numbers say that in the electric car market "Volkswagen leads all carmakers with over 1.4 million sales. Renault-Nissan and China's Geely have also overtaken Tesla."
Blockbuster, Sears.
VW, BMW.
Btw, even though I'm a huge Ferrari fan, the research being made at Daimler AG (Mercedes) is astonishing, not only in Formula 1, their self driving trucks are an incredible piece of technology
Delivery robots, Amazon-style prototypes for cashier-less systems, heck, even Instacart like delivery are nowhere to be found. If Amazon decided to enter the German supermarket landscape, Lidl (also, Aldi and others) would be in serious trouble.
ALDI and Lidl are world class at selling a limited selection of medium quality goods to a massive audience at extremely cheap prices.
It's unclear how any of the technologies you mentioned would improve that core competence. It's also unclear that any of them could threaten that core business. Maybe we will all get our groceries delivered by drones in twenty years, but it's not obvious that that is true. And it's not obvious that being a follower on this, rather than a leader is inefficient for LIDL.
I could turn it around and say that in the US there seems to be a penchant for high-tech solutions "just because" rather than thinking about whether they make sense. One example: In Germany we don't have any voting machines, never was even seriously discussed. Every ballot needs to be counted by hand. Yet final counts are available on the night (with further verification done later). Some analysis based on experiences in the Netherlands also suggests that it's cheaper to do it that way.
It was quite seriously discussed and some were used during the 2005 election. You don't see any discussions about it today because the constitutional court put a stop to it.
https://www.loc.gov/law/foreign-news/article/germany-constit...
I doubt that since I think that Amazon's vision is very different from what many German customers want. Here is a (German) text of a German blogger who went to Amazon Books in the Empire State Building. His experience was not positive:
> https://www.danisch.de/blog/2019/06/18/ein-seltsamer-einkauf...
I wonder why they don't just use e-ink price labels? These are common around here for a decade or so.
Also as a clarification, the in store demo Amazon Echo devices are set to a variety of names including Alexa and Amazon, which one to say where is printed on the product description tag I saw. They’re not spaced far enough apart though, occasionally “the wrong one” would answer me.
I had a much nicer time shopping at an Amazon Go Store, though selection was limited and I had to edit my receipt later as it thought I’d bought a pop when I had only browsed for flavours.
I don't know anything about the operations and logistics of Trader Joe's but from a consumer perspective the stores seem very streamlined. In many ways it reminds me of Lidl in Germany (more so than Aldi).
Wal-Mart completely crashed and burned in Germany and it already started at the weird greeting person at the entry. When Germans see this, the business is basically already bust. Keep the fake customer relations smiles, Germans find that creepy and annoying. I would bet it would literally be better to have some person yelling at people to move faster.
And then comes workers rights. Germany won't have any of the degrading bullshit like Wal-Mart or others in the US (good luck, Tesla in Berlin). Running a business profitable in Germany is way different from doing the same in the United States. That's both for legal/bureaucratic reasons and also customer expectations.
People in Germany also bring their own bags and actively don't want some slave to bag their items. It's a real skill not to piss off other Germans in a supermarket when you scramble to bag your stuff and take longer than a few seconds. In my experience, Aldi cashiers (well-paid btw) are better than any robot you could put there. Their speed is insane (remember to keep up with the bagging or you will get evil stares or comments for being a moron).
The market is completely different.
That means they have no way to know which items were sold, since all those discount stickers are the same, no matter what item they were affixed to.
Given that, I don't see any way they could do decent stock control in-store. If you don't know what went out the door, you don't know what needs to be restocked.
Having said that, if the items being reduced were scanned as part of the process of being assigned a discount sticker, then the stock-taking process should be able to capture this.
(Reduced items are usually sold, or failing that, discarded or returned).
Apply discount to previous product
Do other stores not do this?
I know Tesco did this not too far in the past - they had an IT-enabled process, but it was based on staff going round the shelves, scanning barcodes, and punching a button if stock was low. That's despite them having tons of computer power pointed at store-level sales records.
As someone who doesn't know retail, like most users of this site, it's easy to assume you should drive re-ordering from sales records. I'm not sure that's actually true.
Amazon could not enter the German market that easily, people really like to shop in Aldi / Lidl and the online retail business is not as strong as in the US.
On a side note, Amazon is unable to penetrate ALDI & LIDL's market share because they offer better prices. It's as easy as that, and it is not about whether German people love waiting in queues or driving to some shop. The savings by shopping at discounters are very real.
Once you factor delivery costs into the equation, many German food retailers only offer the more expensive brand foods for delivery, and not the cheap stuff - exactly as Amazon does.
SAP is terrible yes, but do you know any other way on how to get complex processes from multiple sectors together in a single system?
SAP is basically admitting your logistics and operations became so complex and large that there is no other way to do this more efficiently.
One example is a company which produces ship engines and various other parts. They source all resources from different sub-companies across the globe. From the raw material to final assembly.
All this information needed to be tracked in an ERP system and to be honest, SAP works well in this regard because it has a standardized process (which is terrible i must admit) but atleast it's a standardized process.
In the German market, ALDI/LIDL/REWE currently have a healthy oligopoly. Why destroy end user prices and your own margins by automating?
Amazon is not directly attacking their store-focused model because for the billions needed in investment to reach the automation needed for main-stream adaption, they can get way higher margins in other categories (e.g. non-food).
IMHO the perfect supermarket of the future is not food delivery, but a drive-in/pick-up model where you can go 24/7 and where your order is packed 100% by robots. Until we reach this point in terms of technology, the traditional supermarkets will not change due to the above-mentioned oligopoly.
The prices go down because you don’t have to pay people. If it costs the same, you don’t lower prices just because you’re using automation.
There's three things to note there: it's not Lidl itself, but the parent company doing this, and the plans were announced late last year. Also they're building out the infrastructure for internal use first and are not necessarily looking to offer a cloud to customers, though they may work with select other companies.
EDIT: I was able to load the original source just now and it claims that following an acquisition they were now offering/planning to offer this service to other retailers. I cannot find other sources (particular German ones) supporting this claim. The blog of the allegedly acquired company speaks of a "strategic partnership" and "investment" only [2].
EDIT 2: This [3] is the German source that the link on this post refers to. Unfortunately it's paywalled. The abstract claims that the acquisition is a "building block in building out their Cloud business".
[1] https://translate.googleusercontent.com/translate_c?depth=1&...
[2] https://camao.one/blog/partnerschaft-schwarz-gruppe-heilbron...
[3] https://www.lebensmittelzeitung.net/tech-logistik/Lidl-und-K...
[0]: https://www.stimme.de/heilbronn/wirtschaft/2018/schwarz-grup...
Also, the german link above doesn't even mention the acquisition and the german source for the english article (from "Lebensmittel Zeitung") doesn't talk about "cloud specialists" either.
CAMAO IDC is a software development company (who knows how to use the cloud), they're not "cloud specialists" in the sense that they know how to run a cloud provider.
Source: I work there
It then also mention Delivery in UK, and ecommerce projects. Which makes me doubt if the publication knows what AWS really is.
The whole piece ( If you can even call it a piece ) is very poor reporting, to the point I am thinking of should I be flagging this.
Edit: Please Read Comment by Cu3PO42 https://news.ycombinator.com/item?id=23151233.
Probably they want to repeat the success of AWS and apply the same pattern. Their retail businesses will provide base load for the cloud. Their own services can be developed in such a way that they can sell them to other retailers as cloud services. Or they develop a market place and switch to platform business.
https://lobste.rs/s/wfltz1/eu_commissioned_study_proposes_eu... Oh...
Hetzner has a completely different business model and so far it has been working very well for them. They are good at optimization of all their available resources via flexible pricing. As their loyal customer for almost 10 years I love one their aspect that I hate with AWS: with Hetzner, I'm 100% sure how much I'm going to pay at the end of the billing period. Actually, for several of my customers I turned on yearly billing as the amounts are so ridiculously small.
This makes as much sense as saying "So if Digital Ocean (also from the US) can't compete with AWS, who can?"
They're different niches
"Lidl’s parent company Schwarz Group is taking on Amazon by launching its own cloud computing service for third party retailers."
My guess would be that they are not aiming to compete with AWS per se, rather to offer infrastructure and services for online stores, which could possibly include having their own data centers for the service part.
Amazon is well established. Amazon has thousands of employees. Amazon does, ultimately, provide a good service. But Amazon is also dominant, demonstrates a callous disregard for worker rights in its other business arms, and has used its solid AWS profits as a way to prop up its undercutting and dismantling of other sectors.
Other businesses will not enter the space in as developed a state as AWS. That shouldn't be used as a negative against them even trying. Otherwise, AWS is only going to become more entrenched and the options for building at scale will become more limited.
I also wonder why I would trust LIDL to execute on a vital part of infrastructure for us, when they can't manage an SAP migration project...
https://www.consultancy.uk/news/18243/lidl-cancels-sap-intro...
Said "cultural issue" is the reason why the GDPR was implemented in the first place! It was not European ad-tech running wild tracking people all over the place so hard that even the notoriously slow and complex EU parliament had no choice but to act in the interest of their constituents.
It might be a sign they're moving in the right direction, but it also tells me they are transitioning from a board and executive team that felt that was the right path quite recently.
When you look at the details, it looks much more as though they're launching an alternative to Ocado, a company providing technology for food retailers to offer home delivery - they work with Kroger in the US.
With enough capital and will they will get to somewhere. You can be sure the political establishment likely has their back.
And it makes sense, of course. If you rely on US-companies, you're dependent on the US. Any political or economical conflict will result in Washington pressuring US-companies and you'll be in a bad place. Given that most European governments (and Germany's especially) are very unhappy with the current US administration, it's obvious that they'd want to reduce dependencies.
Sometimes people then point to the fact that it's still a US company but ironically people try to make that point on their US-created computers using websites on a US-owned gTLD with US-owned software. Generic cloud resources seem like the smallest issue to me in that chain.
There's no reasonable expectation that Amazon will not use any data it can easily access to make decisions.
I don't find that your argument regarding "using US created computers" and "US-owned gTLD" holds water. It's very hard to build e.g. CPUs that will contain very advanced backdoors that are totally hidden but can easily be targeted remotely to gather information, and the same goes for secretly using a domain. Additionally, the cost of doing so is astronomically high: the total loss of trust in US chip makers and internet companies. They may very well do that during major wars, but not to steal some company secrets.
On the other hand, it's easy for Amazon to siphon off data from AWS and even just using meta data (e.g. looking at how and when a customer scales to what size) gives you valuable insight into their business. And if they get caught? A few politicians will be annoyed, a few media articles (but hey, they may overshadow reports on unionization, so it's not all bad) and potentially a few companies leaving their platform, while others will undoubtedly say "I have nothing to hide from Amazon, so what?"
In other words the threat model is dramatically different.
For comparison, Amazon has 40,000 employees in AWS.
No need to waste resources on products such as AWS Greengrass, or AWS Lumberyard, or even AWS EKS.
My guess at the total headcount for EC2 would be several thousand employees.
Source: worked as an engineer at Amazon, including EC2 for 5 years.
So maybe you're even underestimating!
EC2 has thousands of engineers by my estimation. Source: I worked thete.
There are 200+ AWS services now. So just 8 engineers (2 pizza team) for each service would be 1600 engineers. Let alone marketing, enterprise sales etc.
The REAPER DAW was written by one person. The initial Linux kernel was written by one person. cURL was written by one person and even your BMW uses it [1]. The original Skype was written by three programmers. The list goes on... Of course, you later get a lot of maintainers joining the projects. But you certainly don't need 40 000 programmers if you are not selling your product, or not selling it yet. And even then I think a lot of those jobs are, while they are useful for AWS, not part of the core development.
AWS is nearing 50% larger than SAP in sales, which have 101,000 employees.
AWS is now approximately the size of Oracle in sales, which have 136,000 employees.
Source: worked at Amazon for 5 years, including EC2.
I have my doubt, but I really hope this becomes something good. Good european competition in that sector is quite neccessary. We have seen how european laws influenced the world, and especially USA in the last years, hopefully business can reach similar effects.
To my reading
a) lidl is NOT launching an AWS competitor, per se
b) this is all about the data and the power of the logistics platform
Amazon is heavy in the food business.
Amazon observes the use of any of its primitive services by any competitors to determine where growth is occurring, then goes and eats competitor business.
Lidl will not use AWS, wants its supply chain to not use AWS, and would prefer to have adjacent businesses use primitives (like distribution logistics) it makes available so it can observe and eat them when time is right.
Walmart already two years ahead in this game.
It's not really a mismatch of the comments and article though. The title of the article is "Lidl owner launching its own rival to Amazon Web Services". And the body says things like "While Schwarz IT intends to use Europe’s enhanced data protection laws as a key differentiator to Amazon’s dominant service".
So perhaps you're right about the true purpose, but the article is claiming otherwise.
The game of telephone goes like-
* there's what I would guess to be reality * the things the article says, that distort from (what I would guess to be) reality * the things the headline says that distort from what the article says * the things most HN commenters who only read the headline say that distort yet further from the article and from reality
By reading some of the top HN comments, and then the article, I get to play this game backwards. This was a particularly good example.
I don't doubt that Lidl is building some platform for retailers and its supply chain to use. That's just good business.
And no doubt data protection plays some role in the strategy, though data protection is a right generally afforded individuals, and Lidl's focus will be commercial.
But these two paragraphs are particularly out of proportion:
Schwarz Group, which owns both Lidl and Kaufland, is launching its own rival to Amazon Web Services (AWS) following the recent acquisition of software specialist Camao IDC
The acquisition, which completed on May 1, brings 70 cloud specialists into the wider group representing key “resources in an important area of digitalisation”.
My guess would be that Lidl does expect to do something innovative in e-commerce (around, say, augmented reality) and is planning to offer that as a service to other retailers, hence the comparison with Amazon's strategy. I can't believe that Lidl is planning to compete with S3 or EC2.
It's more like saying "Google will do X" when it's technically Alphabet that spawns X.
By the looks of it they want to start with a managed K8s and database services.
If you look at the job offers, you can see that they are using OpenStack[1] for some parts of there platfrom
[0] https://stackit.de/en/cloud/ [1] https://schwarz.jobs.schwarz/job/Neckarsulm-&-Umgebung-Cloud...
Their inventory system seems out of whack - the stuff we buy regularly will just ... vanish, never to come back. We've been shopping and heard others complain of the same thing - sometimes the same items we were looking for (and had used to buy).
Their in store bakery was initially great - for about a week, then scaled back and rarely has anything fresh - regardless of time of day. You can tell if/when there's been some regional VP to visit that day because the bakery is hot/fresh/piping that day, then... offline. Now... many US folks in grocery stores may not be used to 'good bakeries', and perhaps it was a money loser for them, but... they didn't really give ours a chance to develop with the local shoppers in the first place. Give people more than 2 choices of bread - do it for a month or two, to give people time to try out options, get a rhythm, etc. Buying something, liking it, then coming back 3 days later for more and the bakery is effectively 'closed'... doesn't make you want to come back.
I wish they'd focus more on better in store inventory/stocking before moving to be an AWS-killer....
https://www.camao.one/de-de/referenzen
Unless they have some other cards they haven't played yet, this sounds more like a headline intended for investors rather than customers.
Source: I work there
It may well end up running on top of AWS!
If you were the CTO/CIO and were tasked in building up a cloud that competes with behemoths , how would you do it. Of course it would be an "A Team" to do it , but what would be your priorities (e.g pick up cloud foundry and build things on top , take low hanging IaaS services) , there are so many aspects to it , how would you track progress and decide when to go out to market ? How would different teams (right from procurement , network , premises , to developers and ops personnel) be managed and seamlessly work ? What would be reasonable milestones and $$ spends ? :)
Note this is purely out of curiosity..any links/blogs would be fine too :)
I hope they at least embrace open-source options and easy billing management, to counter-act the greediness of AWS-way of doing things. Competition in this area is definitely a good thing for all the customers.
Might have been a wake up call for them to put more resources into IT and make it a core competency in the future.
They are good in their core business, and I’m sure this means logistics, marketing, etc. but does it translate to potential operational efficiency in cloud infra I honestly don’t know. It may, but I wouldn’t hold my breath.
Their website is slow af btw (4s to display a detail page).
So if they want to do an AWS like. They'll need to invest. Its not like Amazon : hey we've a bunch of unused servers why we don't rent them?
That's not the origin story of AWS. That myth has been debunked numerous times.
"You can cook good food EVEN though you're using Lidl stuff"
I'm not 100% sure that's what I want of a cloud provider.
They fulfill the adage that "you don't need a lot of choices, just one good choice."
Lidl reputation as a brand has gone up for me since I moved here.
I am not sure why it works like that. These days you get direct to supermarket more often (taking out Fresh Produce Markets) but again—it's not direct to consumer. Personally, I think it's more because of the retailers being cutthroats than any other reason.
It's rare that supermarket chains have direct contracts with farmers. Usually there are one to three middle men in the chain that all want their cut - on the farmer side a cooperative or other association (e.g. with milk it's common that a milk processor buys the milk from the farmers and then sells the processed milk on), then wholesale markets, and finally cooperatives on the supermarket chain themselves - for example, the supermarket chain "Edeka" actually not only runs their own stores, but also is a cooperative of independent store owners, as their name "Einkaufsgenossenschaft der Kolonialwarenhändler" reflects.
Just like in the supermarket industry, there is plenty of demand in the market for quality products at cheaper prices.
I remember the early days of AWS where they would surprise us with price cuts every 6-12 months. That hasn’t happened for a long time, which suggests to me that AWS is, over time, taking advantage of their dominant position and getting more greedy with pricing. Just like Amazon itself!
Imo, they're already good at the supermarket business. I am wondering, instead of doing something out of their expertise, why they do not try to focus and beat other players in their core business. I think there are plenty of areas that can be improved. Having only 70 army and try to be on par with AWS is preposterous!
Hopefully, they can stat out with offerings that are especially attractive for European retailers or something like that.
I'm certainly hoping a major European player emerges in cloud but it would be an impressive diversification in this case.
I work for a pretty big EU university (~50000 users) and there is very little AWS/Azure/Google we can actually legally use. And this isn't a case of "bureaucracy gone mad" either, there are some real concerns with the big cloud providers that the rest of the world doesnt seem to have the time or the energy to tackle.
Another thing is that AWS/Azure/Google are getting _super_ complex. The idea of a back to basics cloud provider that fully complies with GDPR might actually be a compelling offering.
That said- whether this kind of tech can come from a budget supermarket chain in Germany is another thing all together. Despite the hype, not much exportable tech actually comes out of Berlin, and its not clear that they have the breadth and depth of expertise in "open source at scale" to make this actually happen. But on the other hand- who knows? Will be interesting to see.
Lidl has not quite a big reputation for IT: https://www.consultancy.uk/news/18243/lidl-cancels-sap-intro...
Low prices? Seriously?
It is not clear if the cloud will be publicly available for customers and therefore a rival to AWS.
One of those reflexes basically boils down to combination of ineptness and not invented here (i.e. in Germany) syndrome. Another part of this is that the locals have an understandable historical aversion against anything invading privacy; as this has been abused by both nazi's and communists to hurt people in the past.
Unfortunately the net result is an industry that is still dependent on shoveling around a lot of paper via post and fax (!!), and a misguided trust in the security of what is basically a patch work of small companies, corporate departments, and government agencies working with very outdated, home grown stuff that can only be assumed at this point to be quite insecure and hopelessly compromised by foreign and domestic intelligence agencies at so many levels that you might as well print the stuff in a newspaper.
Most customers you talk to almost right away start assuming they can't use AWS, Google cloud, or Azure for legal reasons. Of course, all of these run data centers in Germany where they comply with applicable law to keep their quite many German customers across basically all industries happy. This is a complete non issue from a technical and legal point of view. Also, the likes of IBM, SAP, and Oracle are happy to take your money for running this for you (at great expense).
Yet, I've had this discussion with several naive startup founders where they are going to build X and of course from day 1 are going to do their own infrastructure as well because it's obviously the right thing to do (for them). Most of these startups die young. Most bigger German companies get burned repeatedly by this stuff as well.
I know at least one billion dollar construction materials company insisting on running their own cloud that are sinking obscene amounts of cash into running things in a convoluted way. There's no shortage of local suppliers preying on this type of behavior. I declined working on their pile of steaming manure.
LIDL just burned 0.5 billion with a local IT supplier (SAP) that milked them for the fools they are on a project that they should have pulled the plug on years ago. That's all you need to know about their level of competency in this area. Saying this is doomed to fail is just stating the obvious.
https://www.investopedia.com/news/walmarts-new-weapon-agains...
And regularly stipulates SaaS providers that it contracts with to not use any AWS resources. Stipulating that they use their service in future is likely the next logical step.
My pardon, I assumed that this was common knowledge; though it would appear that their branding is so terrible that this is assumed to be a joke.
Pretty big mountain to climb.
So think it as a new flavour of Boeing vs Airbus, if you will. Hopefully with not so many state subsidies.
In reality it's a major german business group who plans to get into IT services with a recent acquisition. They have none of the experience that AWS or GCP have acquired in the last 6-10 years.
They'll do their best and I honestly hope it works out because I want to see more European cloud providers compete with american ones.
If you want a database tracking how many potatoes are in which trucks and when they'll arrive, they'll sell it to you. If you want a Kubernetes cluster, that isn't their business.