Zulily picks Amazon, an e-commerce rival, for cloud-computing deal

SEATTLE — Online flash-sale retailer Zulily says it has nearly finished putting the bulk of the software it uses to run its business on the cloud-computing infrastructure of Amazon Web Services.

The announcement — the latest in a series by AWS meant to tout its momentum, as the leader in rented computing power and software services tries to fend off rivals Microsoft and Google — reads like many prior examples, including Ryanair, Shutterfly, and Cox Automotive.

But Zulily’s move stands out because the company, which sells items from baby clothes to perfume in daily flash sales, competes directly with Amazon’s core online retail businesses.

There are reasons some companies are cautious about such a move.

Large retailers like Target and Kroger are said to be avoiding Amazon’s cloud. AWS is already the Seattle company’s most profitable business unit. Why spend money to help a rival? Some caution that running software on Amazon’s servers runs the risk of tipping off the company’s retail groups to trends or other insight that might give them a competitive advantage.

So what does Zulily think about putting its critical business information in the hands of the dreaded Amazon?

“We’re not,” said Luke Friang, Zulily’s chief information officer. “We’re putting it on AWS’s servers. So we don’t see it that way.”

Amazon says it largely runs AWS as a separate business, with its own chief executive and separate technology and sales teams. To land customers, AWS executives guarantee that they don’t examine corporate records and other sensitive information stored on their servers.

“I would lie if I said the question didn’t came up,” Friang said. But AWS allayed those concerns for him years ago, he said. When Zulily started its search for a cloud-computing provider last year, “we didn’t even think about it.”

Most of the software Zulily uses was built in-house, Friang said.