business news in context, analysis with attitude

The Wall Street Journal reports that Microsoft and Walmart have signed a five-year deal that will use the technology company’s “cloud technology to power functions that could include algorithms for purchasing and sales-data sharing with vendors,” a deal that “pairs Amazon’s largest retail competitor with its closest challenger in cloud computing.”

According to the story, “Walmart plans to deploy Microsoft’s machine-learning, artificial-intelligence and other services to help employees, for example, pick products that go on shelves and optimize the performance of freezers and other equipment. The retailer is aggressively cutting costs as it invests in growing sales online, and it is using tech to analyze its operations, an area of Amazon’s expertise.”

The Journal goes on:

“The Microsoft deal is the latest example of Walmart collaborating with Amazon’s tech rivals. The retailer agreed last summer to list its products on Google Express, the online-shopping marketplace of Alphabet Inc.’s Google, enabling voice-ordered purchases on Google Home products that compete with Amazon’s Alexa service.

"Now, Walmart and Microsoft will look into new ways to use the retailer’s trove of customer and product data, with Microsoft engineers embedded in Walmart offices to help. Those efforts include discussing plans to jointly work on a new system to share product-sales data with suppliers, said an executive familiar with the plans. Currently, consumer-goods companies learn how their products are selling at Walmart through the system known as Retail Link.”
KC's View:
This is an example of how Walmart is thinking these days - looking to make the kinds of connections where one plus one might equal three. It is all about creating efficiencies wherever and whenever possible. But I also think that it is going to be key to figure out how to turn these initiatives into retail offerings that are compelling and relevant. Amazon may embrace algorithms, but everything it does is meant to be customer-oriented … technology for the sake of technology isn’t the kind of approach that leads to a sustainable business model.