Microsoft and Walmart Collaborate

Walmart and Microsoft have partnered up Tuesday for a wider use of cloud and artificial intelligence (AI) technology to improve online shopping experience.

Background

Microsoft Corporation is an American multinational technology company headquartered in Redmond, Washington. It develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and services. Its best-known software products are the Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers. Its flagship hardware products are the Xbox video game consoles and the Microsoft Surface line up of touchscreen personal computers. The word "Microsoft" is a portmanteau of "microcomputer" and "software".

Since Satya Nadella took over as CEO in 2014, the company has scaled back on hardware and has instead focused on cloud computing, a move that helped the company's shares reach its highest value since December 1999. As of 2017, it is the world's largest software maker with a revenue of $90 billion, and one of the world's most valuable companies.

Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, departmental stores, and grocery stores. Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. It also owns and operates Sam's Club retail warehouses. As of January 31, 2018, Walmart has 11,718 stores and clubs in 28 countries, operating under 59 different names.

Analysis

Retail giant Walmart Inc. has entered into a 5 year strategic partnership with Microsoft Corporation to make full use of Microsoft’s cloud solutions, including Microsoft Azure and Microsoft 365, in order to make shopping faster and easier for its customers. Walmart added that engineers will collaborate on the assessment, development and support phase of moving hundreds of existing applications to Azure. It has been using Microsoft services for critical applications and workloads, and will now embark on a broad set of cloud innovation projects that leverage Machine Learning (ML), Artificial Intelligence (AI) and data platform solutions for a wide range of external customer-facing services and internal business applications.

The agreement pairs Amazon’s largest retail rival with its closest challenger in cloud computing. Cloud computing is Amazon's secret, and its technology powers some of the most popular internet services. “Walmart’s commitment to technology is centred on creating incredibly convenient ways for customers to shop and empowering associates to do their best work. Walmart is a people led, tech empowered company, and we’re excited about what this technology partnership will bring for our customers and associates. Whether it's combined with our agile cloud platform or leveraging machine learning and artificial intelligence to work smarter, we believe Microsoft will be a strong partner in driving our ability to innovate further,” Walmart CEO Doug McMillon said.

Both companies have been overhauling their services to compete with Amazon. While Walmart is doubling down on its e-commerce presence, Microsoft has been working on a technology that would eliminate cashiers and checkout lines from stores. The technology also aims to aid retailers to keep pace with Amazon Go, the highly automated store format created by the e-commerce giant. “The world’s leading companies run on our cloud, and I’m thrilled to partner with Walmart to accelerate their digital transformation with Microsoft Azure and Microsoft 365. How do we get more leverage as two organizations that have depth and breadth and investment to be able to outrun our respective competition,” Microsoft CEO Satya Nadella said.

The flexible and secure global technology will significantly accelerate Walmart’s ability to execute in key areas such as digital transformation and innovation. Microsoft’s cloud technology will allow them to manage workloads in a changing environment, access new tool-sets for innovation and manage costs.

Assessment

Our assessment is that Walmart wants to bulwark against Amazon’s retail ambitions and expertise in data, and boost its online presence. We believe that customers will value Walmart’s constant innovation and efforts to help them save them time and money. We feel that collaborations across industry verticals will improve productivity by fostering a culture of creativity and communication.