As Amazon Battles with Retailers, Microsoft Leads Them into the Cloud

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While I don’t blame Amazon one bit for turning the retail sector upside-down and competing aggressively for every available dollar, and while it’s no surprise that major retailers are avoiding Amazon Web Services like the plague, it’s still been striking to watch Microsoft’s recent run of blockbuster retail deals.

As Amazon has become a global powerhouse in e-commerce and retail, and has bought its way into the grocery-store and drug-store sectors, Microsoft has brought in new leadership for its retail-industry business unit while also locking down broad and deep contracts with a growing number of the world’s top retail chains:

Many of these deep relationships go beyond technology deployments to often-radical transformations of business models, operating models, and competitive positioning. For Walgreens, that means completing its transformation from a traditional retailer to a multifaceted and digitally driven provider of healthcare.

For Kroger, it’s the mega-shift from selling groceries to creating and selling technology solutions to other retailers.

And in every example of this remarkable retail run, the customers are demonstrating strong belief in Microsoft’s core strategy of unified architecture from the cloud to the edge because no industry has greater need for intelligent and connected devices and IoT than retail.

As Microsoft executive vice-president Judson Althoff said in a recent blog post, “On the cloud and AI front, we are seeing organizations as varied as MastercardVolkswagen Group,  BuhlerGrab and Sodexo embrace these technologies to drive innovation in payment processing, connected cars, ride-hailing apps, food safety and facility management. These customers recognize the advantage of having a consistent computing stack from the cloud to the edge.”

Beyond the aggressive deployment of these cutting-edge technologies, these big-time customers are also leaning heavily on Microsoft to help them work through incredibly vital, strategic, and potentially risky overhauls of who they are, what they do and how they generate revenue.

For example, look at this perspective from the CEO of Walgreens Boots Alliance (WBA), Stefano Pessina, in describing the groundbreaking initiative his company and Microsoft are undertaking.

“Our strategic partnership with Microsoft demonstrates our strong commitment to creating integrated, next-generation, digitally enabled healthcare delivery solutions for our customers, transforming our stores into modern neighborhood health destinations and expanding customer offerings,” Pessina said in a press release put out by the two companies.

He went on to add, “WBA will work with Microsoft to harness the information that exists between payors and healthcare providers to leverage, in the interest of patients and with their consent, our extraordinary network of accessible and convenient locations to deliver new innovations, greater value and better health outcomes in health care systems across the world.”

Amazon battles with retailers, as Microsoft leads them into the Cloud
Satya Nadella, CEO, Microsoft (right), and Stefano Pessina, executive vice chairman and chief executive officer of WBA

In that same press release, Microsoft CEO Satya Nadella offered this perspective: “Improving health outcomes while lowering the cost of care is a complex challenge that requires broad collaboration and strong partnership between the healthcare and tech industries. Together with Walgreens Boots Alliance, we aim to deliver on this promise by putting people at the center of their health and wellness, combining the power of the Azure cloud and AI technology and Microsoft 365 with Walgreens Boots Alliance’s deep expertise and commitment to helping communities around the world lead healthier and happier lives.”

Next week, I’ll lay out some additional details about these blockbuster deals and they ways they demonstrate the vast business potential of the cloud and AI—and why the competition in the Cloud Wars is and will remain extremely intense.

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