While the country is in the midst of Amazon’s mid-year discount fiesta and Jeff Bezos enjoys being crowned the richest man in modern history, rivals Walmart and Microsoft announced a new five-year partnership in hopes of knocking the online shipping giant down a peg or two.
According to The Wall Street Journal, the focus of the deal will be on Walmart’s use of Microsoft’s Azure cloud technology, which will be tailored to improve Walmart’s forecasting, purchasing, and data-sharing abilities. With Microsoft’s help, not only is Walmart trying to eat into Amazon’s massive U.S. e-commerce market share, which currently stands at around 49 percent, it is also depriving Amazon of a major potential customer for its own AWS cloud platform.
For Microsoft, the partnership seems like an obvious play, with CEO Satya Nadella telling the Journal that the two company’s shared rivalry with Amazon “is absolutely core to this [deal].”
While Walmart has been developing its own cloud-computing division over the last few years using some Microsoft tech, by integrating its data more deeply into Azure, the company hopes that new AI and machine learning algorithms will make it easier to streamline deliveries and cut costs as it continues to expand its online offerings. Those now include grocery pickup, smart home tech installation, and more, in additional to traditional online purchases.
Interestingly, one aspect Microsoft’s and Walmart’s deal doesn’t seem to touch on is development of new cashier-free stores. Just over a month ago, reports surfaced claiming that the two companies were already working on their own joint version of Amazon Go, Amazon’s no-checkout convenience store that opened to the public earlier this year in January.
But even with Walmart’s huge nationwide brick-and-mortar presence, when it comes to the evolution of retail, it’s pretty clear Walmart is going to need extra help incorporating some of the sci-fi features found in the flagship Amazon Go store, which should set Walmart and Microsoft up for even more collaboration in the future.