Amazon signs a $1 billion deal with Microsoft for Microsoft 365 cloud tools

Amazon signs a $1 billion deal with Microsoft for Microsoft 365 cloud tools

Microsoft is preparing to bring on Amazon.com as a customer for its cloud-based productivity tools in a deal worth more than $1 billion, Insider reported, citing a source familiar with the company’s internal documents.

Microsoft, whose shares rose nearly 1% in extended trading after the announcement, declined to comment. Amazon also did not respond to Reuters’ request for comment.

Amazon, through its Amazon Web Services division, creates its own productivity and collaboration products (namely AWS WorkDocs and WorkMail), but apparently uses on-premise Microsoft Office products for internal use, RedmondMag reports.

According to the report, Amazon’s transition to the Microsoft 365 cloud will begin in November. Possibly concurrently with the release of the AI-powered Microsoft 365 Copilot 1 product November, and will last until 2024.

Microsoft is currently preparing “organizations for working with the office and security” to the huge resource impact of having Amazon as a customer, Insider reported.

The public cloud segment of the market is split between Amazon and Microsoft, and both are competing for service, price, size and, more recently, growth (Amazon has always been the cloud market leader, but its growth has slowed recently, while Microsoft has been growing).

From 2019 to 2021, the two companies engaged in a long, high-profile bidding war for a multibillion-dollar cloud contract with the US Department of Defense. That conflict ended a year ago when, after much hesitation and trial and error, the Defense Department decided to split the contract between Microsoft, Amazon, Google and Oracle.

Previously, Meta, Microsoft and Amazon launched an open-source mapping project that could become a competitor to Google Maps and Apple Maps.

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