The digital era has left many a legacy retailer in the dust, and Walmart is determined to avoid the same fate.

So on Monday, the U.S.’s largest retailer signed a five-year agreement with Microsoft Corp. to use the latter’s cloud, artificial intelligence (AI), and Internet of Things (IoT) solutions across its operations, with its stated goals being to “further accelerate Walmart’s digital transformation in retail, empower its associates worldwide and make shopping faster and easier for millions of customers around the world.”

“Walmart’s commitment to technology is centred around creating incredibly convenient ways for customers to shop and empowering associates to do their best work,” Walmart CEO Doug McMillon said in a July 16 statement. “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.”

Microsoft CEO Satya Nadella, meanwhile, called Walmart “a pioneering retailer, committed to empowering its employees and delivering the best experience for its customers wherever they are.”

“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,” Nadella said in the July 16 release.

Of course, another potential reason for the partnership that might occur to ITBusiness.ca readers, and that Nadella confirmed in an interview with the Wall Street Journal, is the challenges that Walmart and Microsoft both face from Amazon.com Inc. between the latter’s cloud and retail operations.

“How do we get more leverage as two organizations that have depth and breadth and investment to be able to outrun our respective competition?” Nadella told the Journal, adding that the companies’ shared rivalry with Amazon was “absolutely core” to their new partnership.

In Monday’s release, Walmart noted that it’s already using several Microsoft services for critical applications, with the new agreement simply placing greater emphasis on machine learning, AI, and data platform solutions in an effort to improve both its customer service and internal business operations.

The company plans to focus on three key goals in particular:

  • Digital transformation, with investments in Microsoft Azure and Microsoft 365 that will see Walmart deploy the platform across its enterprise operations and, with support from Microsoft, migrate hundreds of existing applications including a “significant portion” of walmart.com and samsclub.com to the cloud.
  • Innovation, with Walmart using Microsoft’s cloud capabilities to further improve its website’s speed and quickly deploy new features. “There are also massive benefits to operating at scale as Walmart builds a global IoT platform on Azure – from connected HVAC and refrigeration units to reduce energy usage in thousands of U.S. stores or applying machine learning when routing thousands of trucks in the supply chain,” the company said in its July 16 release.
  • Operations, with Walmart rolling out Microsoft 365 in phases and training its associates in how they can best use the platform to collaborate with each other across departments in ways that both save time and improve the quality of their work.
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