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Microsoft (MSFT) has a new ally in its efforts to displace Amazon (AMZN) as the leading cloud computing company: retailer Wal-Mart (WMT)

With competition fierce between Wal-Mart and Amazon, the former has started informing some technology partners that none of the applications they run for the retailer can be housed on Amazon Web Services. Tech executives told the Wall Street Journal that if they want to continue to keep Wal-Mart's business they have to look toward alternatives such as Microsofts Azure cloud service.

While Wal-Mart maintains most of its data internally, a spokesman told the Wall Street Journal there are some instances where some of the cloud apps it uses run on AWS. The spokesman declined to name which apps, but did acknowledge it has urged vendors to use other cloud providers in those cases.

It shouldnt be a big surprise that there are cases in which wed prefer our most sensitive data isnt sitting on a competitors platform, the spokesman told the Journal, noting its a small number of instances. The paper highlighted one example in which data warehousing service Snowflake Computing was asked by a Wal-Mart client to handle its business on the condition that it would run the services on Microsofts cloud. Snowflake obliged and is developing a product for Azure. (See more: Analyst Downgrades Amazon Citing Need for Greater Operating Leverage.)

Wal-Marts push to keep its data off of AWS may not do much to hurt Amazons cloud hosting business, but it could help rivals who are closing the gap on its leadership position in that market. Late last week Pacific Crest Securities said Azure could have more revenue that its main rival for the first time in 2017. In a research note covered by The Street, analyst Brent Bracelin said Microsoft becoming the biggest cloud provider for the first time in 10 years would transition the company from a cloud laggard to a cloud leader. Bracelin said he came to this conclusion after conducting an analysis of the 60 biggest cloud computing companies. (See more: Microsoft Could Surpass Amazon in Cloud Computing This Year)

People jump through hoops to do business with Wal-Mart all the time, said Robert Hetu, an analyst with the research firm Gartner to the Wall Street Journal. That should absolutely accelerate the competition from Azure. Microsoft is already the main cloud infrastructure provider for Jet.com, the ecommerce company Wal-Mart paid $3.3 billion for last fall and currently Wal-Mart is one of Azures biggest customers. The Journal reports that other big players who compete against Amazon are following suit and requesting service providers to stop using AWS, which could prove to be a big boon for the Redmond, Washington-based software company.

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Wal-Mart Orders Tech Partners to Get Off Amazon Cloud (MSFT, WMT) - Investopedia