Walmart, Microsoft Deepen Partnership as Both Grapple With Amazon

The enemy of my enemy is my friend—even in the retail and cloud computing businesses.

So says retail giant Walmart (NYSE: WMTas it announced this morning a five-year partnership with Microsoft (NASDAQ: MSFT) to use machine learning and other technologies, deepening an existing partnership between two of Amazon’s biggest rivals.

“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 CEO Doug McMillon said in a press release Tuesday.

Walmart is, of course, a key retail competitor to Amazon (NASDAQ: AMZN), while Microsoft jousts with Amazon in providing cloud computing services. Tech publication The Verge reported that Microsoft CEO Satya Nadella hinted at that rivalry in an interview with The Wall Street Journal, asking: “How do we get more leverage as two organizations that have (the) depth and breadth and investment to be able to outrun our respective competition?”

Walmart says it will work with the Seattle-based tech giant in three key areas. These include digital transformation (retail is increasingly becoming a mobile-first business with shoppers placing orders online but picking up in the store), innovation (using machine learning to manage truck routes), and what Walmart calls “changing how we work.” These are Walmart programs to make employees more efficient and collaborative.

Tuesday’s announcement comes just weeks after reports suggested Microsoft is working on developing technology that could rival Amazon Go’s cashier-free stores, The Verge reported.  Amazon’s Go store in Seattle deploys multiple cameras and sensors that use computer vision algorithms to detect which items a shopper is taking out of the store, and then automatically charges that customer for them. Microsoft is reportedly experimenting with attaching cameras to shopping carts to track items, the publication reported.

Walmart’s deeper tie to Microsoft is just one way the Bentonville, AR-based retailer has been leveraging technology to maintain its retail dominance. In the last year, Walmart’s tech incubator, called Store No 8, has purchased startups innovating in technologies such as virtual reality in order to develop the future of retail. The store is also working with Bossa Nova Robotics to use machine learning-enabled robots to help maintain more accurate inventory, and is working on an “intelligent food” system to keep produce fresh.



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