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Report: Target will stop paying Amazon for cloud computing services

The company wants to stop financing its chief rival.

Here's something that might surprise you: Target has been paying Amazon – one of its fiercest retail competitors – to handle a big chunk of its internet needs. 

But now the Minnesota company is planning to break off that relationship and take its business elsewhere, according to an exclusive report from CNBC

"Sources familiar with the matter" told the network that Target will be "scaling back its use of Amazon Web Services" in order to "stop financing its chief rival."

The cold war between Target and Amazon is no secret. In recent months, Target has stepped up its online game (by investing in online ordering and same-day delivery, for example) to steal some of Amazon's thunder.

Why the change could be complicated

Amazon Web Services (AWS for short) is a key side business for Amazon, and one of the world's "biggest big dogs" in cloud computing (though not quite as big as Microsoft), according to Forbes

And it can count some of the largest corporations among its clients, including Netflix, General Electric, McDonald's, Comcast, and many more

In simple terms, these companies – including Target – rely on Amazon's service for things like data storage, instead of using and maintaining their own physical computer servers (which would be hugely expensive, considering these AWS clients have massive online presences).

But if the CNBC report is true, Target isn't planning on handling its own web traffic. The network said Microsoft Azure – the chief AWS competitor – is "among the rival cloud vendors vying to nab Target's cloud business."

The retailer plans to make the transition away from Amazon "through the end of the year and probably into 2018."

GoMN received this comment from Target:

"While Target doesn’t discuss details of our vendor-partner relationships, I can share that we currently use multiple cloud service providers and will continue to do so. Early this year we evaluated providers, as we regularly do, and determined there were options that would better fit our business. We decided to implement changes and have been in the process of doing so since. While we won’t share details, we plan to continue to use multiple cloud providers moving forward."

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