The agreement will help both companies take on Amazon.
And cloud computing is one of the few areas where Microsoft (MSFT) competes with Amazon (AMZN). While it’s best known as an online retailer, Amazon also has a cloud service that racked up over $5 billion in sales in the first quarter.
“Walmart was never going to partner with Amazon for obvious reasons and Microsoft is the second largest provider of cloud solutions in the world,” said Dusan Milosavljevic, an analyst at Berenberg bank.
Walmart will also get access to artificial intelligence technology that could reduce energy consumption in its stores and machine learning expertise that would improve its delivery systems.
Last month, Walmart announced a new personal shopping service that lets customers order items via a text message with speedy delivery. It also launched new apps for back-to-school shopping.
Microsoft has been trying to convince retailers about the power of data and technology, working on everything from inventory to transport to online shopping.
Meanwhile despite tech glitches, Amazon’s Prime Day has been a huge success so far. Sales soared by 89% in the first 12 hours of Prime Day compared to the first 12 hours last year. Prime Day, which went live on Monday, offers discounts to Prime members. It is the company’s annual sales bonanza.
Retail think tank Coresight Research predicted that sales will reach $3.4 billion this year, about $1 billion more than last year.