Amazon and Microsoft, two tech giants that have collaborated in the past, are reportedly in talks for a major cloud deal worth $1 billion. Although this potential deal, which will strengthen their existing partnership, has not yet been officially confirmed by Microsoft, internal sources and documents have revealed important details.
According to Bloomberg, Amazon plans to pay Microsoft $1 billion within five years for one million Microsoft 365 licenses. These licenses will be used by Amazon’s corporate and front-line workers. Currently, Amazon relies on on-premises Office 365 installations, but this new deal will mark a shift to cloud-based productivity tools.
The migration to Microsoft 365 is scheduled to begin in November and coincide with Microsoft integrating AI Copilot capabilities into its Office applications. This transition process is expected to continue until early 2024. To meet the demands of this significant deal, Microsoft is said to be scaling up its resources in its cloud and security departments.
In the past, Amazon has avoided investing in cloud-based Office applications due to concerns about storing its data on a competitor’s cloud platform. It remains unclear what factors led Amazon to make this shift towards Microsoft 365.
This agreement represents a significant victory for Microsoft and has the potential to pave the way for further collaboration in a variety of areas. The positive reaction to this news was also reflected in the stock market, with Microsoft’s share price increasing by 1% in after-hours trading. However, it is important to note that currently this deal remains a rumor until it is officially confirmed by Microsoft.