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Amazon is set to sign a billion-dollar deal…with Microsoft 365

Amazon is preparing to sign a deal worth more than $1 billion with its key rival Microsoft to supply the ecommerce giant with office software.

A recent Insider report, citing an internal document and an anonymous person familiar with the matter claims Amazon will pay for Microsoft 365 licenses for a million of its corporate and frontline workers.

Although the two remain major competitors in numerous markets, especially cloud, Amazon is already a user of Microsoft’s software tools.

Amazon becoming a major Microsoft 365 customer

The deal will see Amazon migrate from traditionally installed copies of Microsoft Office to Redmond’s cloud-based subscription, likely in a bid to keep workers supplied with the most up-to-date versions of software in a more cost-effective way.

Such a deal between the two companies may seem unlikely given that AWS and Azure go head-to-head in the cloud market, but Amazon doesn’t have its own office software.

Technically, WorkDocs and Chime go part of the way to offering what Microsoft offers, but to nowhere near the same measure of success.

Insider’s source believes that Amazon could begin setting up licenses in November, with a full move planned for early 2024. It’s unclear whether Amazon workers will benefit from the full generative AI capabilities of Microsoft 365 Copilot.

Following Insider’s report, Microsoft shares rose 1% in after-hours trading.

This megadeal will give Microsoft a huge boost, not that it needs one. The company has been under fire recently, in various markets, about its unfair dominance.

Various companies and bodies have launched complaints about anticompetitive practices, which have sparked investigations by antitrust bodies.

Redmond has only just removed Teams from its Microsoft 365 bundle, following a complaint from Slack and dissatisfaction from other video conferencing software providers.

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