Walmart enters strategic partnership with Microsoft

Walmart is banking on Microsoft Corp. to provide it with the technology foundation to meet the demands of today’s evolving consumer marketplace.

On Tuesday, Walmart named Microsoft as its preferred and strategic cloud computing partner. Under a five-year agreement, the retail giant will implement Microsoft’s range of cloud solutions for customer-facing services and internal business applications, including Microsoft Azure and Microsoft 365 for enterprise use to help standardize across its family of brands.

Plans call for Walmart and Microsoft engineers to move hundreds of the Bentonville, Ark.-based retailer’s applications to cloud-native architectures. That includes migrating “a significant portion” of Walmart.com and SamsClub.com to Azure, the companies said, noting that cloud-powered checkout will enable Walmart to grow with rising customer demand and reach more global markets.

“Walmart’s commitment to technology is centered around creating incredibly convenient ways for customers to shop and empowering associates to do their best work,” Walmart CEO Doug McMillon said in a statement. “Walmart is a people-led, tech-empowered company, and we’re excited about what this technology partnership will bring for our customers and associates.”

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Walmart already uses Microsoft services for critical applications and workloads. Through the strategic partnership, the retailer will engage in a breadth of cloud innovation projects that leverage machine learning, artificial intelligence and data platform solutions across the enterprise.

“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,” said McMillon.

By employing the Azure cloud platform across its brands and global businesses, Walmart will be able to leverage Microsoft’s computing capacity, seamlessly manage workloads in an elastic environment and expand access to new tools, the companies said.

For example, they explained, a cloud-native environment will allow Walmart to better manage site availability and speed as well as launch new features to customers. The retailer also will be able to operate at scale as it builds a global Internet of Things (IoT) platform on Azure, ranging from connected HVAC and refrigeration units to reduce energy usage in thousands of U.S. stores to the application of machine learning in routing thousands of trucks in the supply chain.

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Internally, Walmart also is beginning a phased rollout of the Microsoft 365 workplace platform to provide its associates with productivity and sharing tools that foster collaboration and communication.

“Walmart is a pioneering retailer, committed to empowering its employees and delivering the best experience for its customers wherever they are,” said Satya Nadella, CEO of Redmond, Wash.-based Microsoft. “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.”

In Microsoft, Walmart now has secured a leading IT player to help it support a vast global enterprise with over 2.3 million employees and $500 billion in annual sales, as well as serve the 270 million customers that visit its 11,700 stores under 65 banners in 28 countries and e-commerce websites each week.

The partnership, too, better positions Walmart in its battle against rival Amazon.com, whose burgeoning Amazon Web Services (AWS) subsidiary has rapidly become a leading provider of cloud-based computing services and solutions to businesses worldwide — not to mention a well of innovation for Amazon’s core online retail and distribution business. In 2017, AWS totaled revenue of $17.5 billion, up 43% year over year and more than double its 2015 sales.