Walmart-Microsoft 5-Year Cloud Deal — Three Key Areas of Execution

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Walmart-Microsoft 5-Year Cloud Deal — Three Key Areas of Execution

By Kevin B. Simon

Walmart-Microsoft 5-Year Cloud Deal - Three Key Areas of Execution


On July 17, 2018, Walmart Inc., America's multinational retail company announced its strategic partnership with Microsoft to accelerate its current digital prowess and presence in the global retail industry where its losing grounds fast to Amazon. Earlier, Walmart has expanded its e-commerce ecosystem by acquiring online retailers like Jet.com (2016, United States) and Flipkart (2018, India), by selling its Chinese e-Commerce business Yihaodian to JD.com in exchange for a 5% equity stake valued at US$ 1.5 Billion in the year 2016, and concurrently, adding new features to its mobile app. The retail giant even launched a tech incubator, Store No.8, to develop next-gen shopping experiences in augmented and virtual reality.

Under this new strategic partnership, Walmart would be benefitted by making faster check-out via Microsoft's cloud-powered solutions and at the same time making their listed products accessible to millions of their customers around the world. 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 standardize across the company’s family of brands.

"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 Doug McMillon, Walmart CEO. "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."

"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 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 the past, Walmart has already availed Microsoft services for their critical applications and workloads and now looking to work together on a broad set of cloud innovation projects which leverages Machine Learning (ML), Artificial Intelligence (AI), and data stored at cloud platform solutions for an extensive set of external realtime customer-facing services and internal business applications as well. This will accelerate Walmart’s command to execute in three key areas:

Digital transformation: Bringing the whole supply chain into the digital domain may save Walmart millions of dollars in the next few years, as sensors are deployed to track energy consumption to inventory stock intake. This may improve Walmart’s competitiveness against Amazon and other online retailers, which are already using the Internet of Things (IoT) to gain a competitive advantage. Walmart's dependency on Microsoft Azure will be a paramount factor which will allow them to leverage on the latter's capabilities, such as;

- Capitalize on depth and breadth of Microsoft’s compute capacity

- Ability to seamlessly manage workloads in an elastic environment

- Leverage expanded access to new toolsets to innovate faster

- Drive a more cloud-native environment and therefore continue to manage cost

This partnership will allow Walmart and Microsoft employees/engineers in their upcoming collaboration to the assess, develop and support in moving hundreds of pre-existing modular applications to cloud-native architectures. For example, to grow and enhance the online experience, the company will migrate a significant portion of walmart.com and samsclub.com to Azure, including its cloud-powered check-out enabling Walmart to grow with rising customer demand and reach more global markets than ever before.

Innovation: Transforming a customer's shopping experience by enhancing the existing metrics like site availability and speed, or the ability to quickly and seamlessly launch new features will leave with an impression of the progress of Walmart with the customer. Another major area of focus would be energy consumption reduction for a behemoth of Walmart's size by building a global IoT platform on Azure which would have connected Heating, ventilation, and air conditioning (HVAC) and refrigeration units to reduce energy usage in thousands of existing U.S. stores or application of machine learning to route thousands of trucks in the supply chain.

Changing Work Processes: Walmart has its emphasis to foster a curious, collaborative, accountable, and agile environment to position the company against Amazon for future growth. Through the partnership with Microsoft, Walmart will be investing in its employees with a phase-wise rollout of complete Microsoft 365 that will provide their employees with the productivity tools. Tools include Microsoft Stream, Microsoft OneDrive & Microsoft Workplace Analytics which will empower accessibility in Walmart associates to collaborate, and remain productive so they can save time and work better.

About the Author:

Kevin B. Simon, (ORCID: 0000-0002-2962-8008). He is a Marketing Professional at Cognitio Innovo, with a keen interest in technology-driven businesses. He is graduate in management studies (MBA) from the Institute of Management, Nirma University, Ahmedabad.