Amazon Commits Over $1 Billion to Microsoft for Cloud Services
In a surprising move, Amazon has decided to partner with its biggest cloud rival, Microsoft, by purchasing Microsoft 365 licenses for 1 million Amazon employees. This deal is worth over $1 billion and marks a significant shift in Amazon’s approach to its competitors.
Despite having its own productivity tools and offerings, Amazon has chosen to invest in Microsoft’s cloud products instead. This decision has raised eyebrows among industry experts, who see it as a testament to the growing influence of generative AI in the tech industry.
One top executive from a solution provider, who partners with both Amazon Web Services (AWS) and Microsoft, commented on the deal, stating, “Amazon is the biggest cloud company in the world, and they’re giving a ton of money to the No. 2 cloud company—to buy their competitor’s cloud products.”
According to reports, Amazon plans to use the 1 million Microsoft 365 licenses for its corporate employees as well as frontline workers. This move comes as AWS continues to dominate the global cloud market with a 32 percent share, followed closely by Microsoft at 22 percent.
While Amazon does have its own collaboration products, such as Chime and WorkDocs, they lack the same capabilities as Microsoft 365, particularly with Teams. AWS offers over 200 cloud services, but its productivity offerings are not as popular as Microsoft 365 and Google Workspace.
Previously, Amazon had avoided using Microsoft’s cloud products due to concerns about storing data on a competitor’s infrastructure. However, this $1 billion deal signifies a change in strategy for Amazon.
Both Amazon and Microsoft have yet to comment on the matter. The implementation of the new Microsoft systems is expected to begin next month alongside the introduction of new generative AI capabilities into Microsoft 365.
Overall, this partnership highlights the increasing importance of AI in the cloud computing market and demonstrates Amazon’s willingness to collaborate with its rivals.