Seeking to drive digital transformation in its retail operations and shake up its e-commerce business, Walmart appears to have found what it needed in Microsoft's growing ecosystem of cloud IT and applications.
The retailing giant announced on July 18 a five-year strategic partnership involving Microsoft's cloud, artificial intelligence (AI) and internet of things (IoT) offerings. The aim is help shoppers complete their transactions faster and promote a culture of collaboration among store associates using Microsoft's productivity software solutions.
"Walmart's commitment to technology is centered around creating incredibly convenient ways for customers to shop and empowering associates to do their best work," said Walmart CEO Doug McMillon in a company statement.
McMillon's approach to improving the Walmart shopping experience and bringing the best out of its employees happens to align with Microsoft's cloud- and AI-focus product strategy. "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 even further and faster," he said.
Like other major IT companies, Microsoft has been investing heavily in AI technologies that improve efficiency by automating workflows and adding intelligent decision-making capabilities to business processes.
On June 20, the software maker announced that it had snapped up Bonsai for an undisclosed amount. The Berkeley, Calif., startup specializes AI for autonomous systems and industrial equipment. Days later, Microsoft announced the general availability release of Azure IoT Edge, a service that allows organizations to run AI and data analytics workloads on edge devices and systems rather than transmit data back to the cloud or an on-premises data center for processing.
Some of those capabilities may help Walmart run a tighter ship in the years ahead. The retailer hinted at an Azure-backed global IoT platform that will help efficiently route its trucks and improve the energy efficiency of its refrigeration units and HVAC systems.
Meanwhile, Walmart's IT personnel, office workers and store employees will be increasingly relying on Microsoft Azure and Microsoft 365, a bundle that includes Windows 10, Office 365 and Enterprise Mobility + Security, to get work done.
Engineers from both companies will migrate hundreds of existing applications to the cloud. Meanwhile, a phased rollout of Microsoft 365 for office workers and store associates is expected to drive adoption of Microsoft Workplace Analytics, OneDrive, and other Microsoft collaboration and productivity offerings among Walmart's workforce.
Walmart vs. Amazon
The partnership also puts the companies on a collision course with e-tailing giant Amazon.
Walmart plans to move "a significant portion" of its e-commerce operations, namely Walmart.com and Samsclub.com, to Microsoft Azure. The move is expected to help Walmart respond more quickly to shopping trends and enable the company to roll out new features at an accelerated pace.
Walmart's e-commerce ambitions took another major turn in May, when the company announced the largest acquisition to date. Walmart outbid Amazon for Flipkart, India's fast growing e-commerce company, offering a whopping $16 billion for a majority stake in the firm.