Microsoft is gearing up to bring Amazon as a significant customer for its 365 cloud productivity tools, marking a transformative deal that would turn long-standing rivals into business partners, an internal document was quoted as saying by news website Insider.
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According to the document, the e-commerce giant has pledged over $1 billion to obtain over one million Microsoft 365 license seats, spread across a five-year period. “Those spots are expected to be used by both Amazon corporate employees and workers in frontline roles,” the person aware of the matter was quoted as saying by Insider.
Amazon currently utilizes a localized, on-premise version of Microsoft's Office suite. However, it has outlined plans to transition to Microsoft's 365 suite, which is a collection of cloud-based productivity tools, according to an anonymous source familiar with the matter.
The implementation of these new systems at Amazon is slated to commence in early November, coinciding with Microsoft's release of an updated version of its 365 suite, featuring enhanced AI capabilities. The complete migration for Amazon employees is anticipated to occur in early 2024, as mentioned by the source.
Executing a transition of this magnitude necessitates extensive planning and the allocation of cloud resources. Teams within Microsoft's Office and security divisions are already in the process of expanding to meet the requirements of this substantial project.
This move would mark a significant departure for Amazon, representing a substantial victory for Microsoft. These two companies are staunch rivals within the same city and seldom engage in collaborative ventures or extensive business transactions.
According to an individual familiar with Amazon's operations, the company refrained from utilizing Microsoft's cloud-based 365 products in the past due to concerns about storing data on a competitor's cloud infrastructure. When contacted by Insider on Tuesday, both Microsoft and Amazon chose not to provide immediate comments.
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One potential incentive for Amazon in this arrangement is the provision of alternatives for their employees in place of internally-developed products like WorkDocs and Chime, which have not gained widespread popularity. Amazon has made attempts to offer cloud-based productivity tools to other corporate customers, but these services have generally not experienced significant adoption.