Amazon is preparing to sign a deal worth more than $1 billion with its main rival Microsoft to supply the e-commerce giant with office software.
A recent one Insider report, citing an internal document and an anonymous person familiar with the matter, claims that Amazon will pay for Microsoft 365 licenses for a million of its enterprise and frontline workers.
While the two remain major competitors in many markets, especially in the cloud, Amazon is already a user of Microsoft’s software tools.
Amazon is becoming a major Microsoft 365 customer
The deal will see Amazon migrate from traditionally installed instances of Microsoft Office to Redmond’s cloud-based plan, likely in an effort to provide employees with the most up-to-date software versions in a more cost-effective manner.
Such a deal between the two companies may seem unlikely, given that AWS and Azure are competing against each other in the cloud market, but Amazon doesn’t have its own office software.
Technically, WorkDocs and Chime go some of the way to providing what Microsoft offers, but they don’t achieve nearly the same level of success.
Insider’s source believes that Amazon could start setting up licenses in November, with a full move planned for early 2024. It’s unclear whether Amazon employees will benefit from Microsoft 365 Copilot’s full generative AI capabilities.
Following the Insider report, Microsoft shares rose 1% in after-hours trading.
This mega deal will give Microsoft a huge boost, not that it needs it. The company has recently come under fire in several markets for its unfair dominance.
Several companies and agencies have filed complaints about anticompetitive practices, prompting investigations by antitrust authorities.
Redmond has only just removed Teams from its Microsoft 365 bundle, following a complaint from Slack and dissatisfaction from others video conferencing software providers.