Walmart and Microsoft have formed a strategic partnership to further accelerate the retailer’s digital transformation.
Optimising Microsoft’s cloud computing capabilities
Central to this strategic partnership is Microsoft’s role as the retailer’s preferred cloud provider which will enable Walmart to tap into the tech company’s range of solutions. Building on this, the companies will work together on a broad set of cloud innovation projects that leverage machine learning, artificial intelligence and data platform solutions for a wide range of external customer-facing services and internal business applications. The aim of this strategic partnership will be to significantly accelerate Walmart’s ability to execute in three key areas.
1. Digital transformation
In a five-year agreement, Walmart has selected the full range of Microsoft cloud solutions, including Microsoft Azure and Microsoft 365 for enterprise-wide use to help standardise across the company’s brands. As part of the partnership, Walmart and Microsoft engineers will collaborate on the assessment, development, and support phase of moving hundreds of existing applications to cloud native architectures. This includes migrating a significant portion of walmart.com and samsclub.com to Azure.
As Walmart builds a global IoT platform on Azure, it will leverage its scale to improve site availability and speed and seamlessly launch new features. It will also help the retailer to reduce costs through connected HVAC and refrigeration units and applying machine learning to route trucks in its supply chain.
3. Changing how it works
Through this partnership, Walmart is investing in its people with a phased rollout of Microsoft 365 providing associates with the productivity tools to foster a culture of collaboration, creativity and communication. Microsoft’s workplace platform supports connected teams, providing colleagues with access to a full range of tools including Microsoft Workplace Analytics, Microsoft Stream, and Microsoft OneDrive.
The CEO view
Commenting on the strategic partnership, Walmart’s president and CEO, Doug McMillon, stated, “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 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 even further and faster.”
Growing global alliances
At a global level, alliances are being built across several areas. As retailers enter the ecommerce channel, or scale up existing programmes, many are acquiring supply chain capabilities, especially for same-day delivery. As with Walmart and Microsoft, retailers are also partnering with technology companies to help develop new ways of working and generate actionable insights from the growing volume of data they have access to. Companies such as Google, JD.com, Ocado and Tencent have been at the heart of many of the new alliances which have been struck over the last 12 months.
Powering the future Walmart ecosystem
This partnership comes at a pivotal time in Walmart’s ongoing digital transformation. While the retailer has digitised a significant proportion of the work undertaken at its Home Office and within its stores, this new partnership highlights the significant opportunities which remain. Walmart will also be able to optimise Microsoft’s capabilities as it moves beyond being a multichannel leader to developing its own ecosystem.
The retailer will also be able to draw on its impending acquisition of Flipkart and its recently announced strategic partnership with Tencent in China. Many of the building blocks already in place, including its stores, online presence, digitally native brands, logistics operations, payment app and enhanced data-science and analytical capabilities. The ability to combine these in a meaningful way through optimising new technologies for its shoppers could be a game-changer for the retailer.