Amazon to become Microsoft 365 customer in landmark $1 billion deal

Amazon could be set to become a Microsoft 365 customer as part of a landmark $1 billion deal, according to reports. 

The tie-up will see Amazon use Microsoft’s 365 productivity suite, sources close to the matter told Insider.  

Amazon has reportedly committed to spending upwards of  $1 billion over five years and take on one million Microsoft 365 license ‘seats’, a term used to describe an individual user. 

Internal documents viewed by the publication suggest that 365 tools will be used by employees spanning both corporate roles and frontline positions. Amazon boasts more than 1.5 million employees globally across its corporate, cloud, and retail divisions. 

The initial shift to Microsoft 365 at Amazon is expected to begin in November and will coincide with a newly-released, updated version of 365 that will offer generative AI tools for users. 

In September, Microsoft announced general availability of its Copilot tool for enterprise users would begin on November 1. 

The generative AI assistant will be available for 365, Windows 11, Bing, and Edge users and is part of an ongoing effort to seamlessly integrate generative AI features across its core products. 

Sources suggested that Amazon has already begun allocating cloud resources to accommodate for the complete carryover, which is expected to begin in early 2024.

At present, Amazon reportedly uses its own on-prem version of Microsoft Office products, the previous iteration of the tech giant’s cloud productivity suite.

The firm also relies heavily on in-house productivity tools, such as the WorkDocs file collaboration platform and Chime, an online meetings service akin to Google Meet or Teams.

Both platforms have been around for several years but have traditionally lacked in features and capabilities what Slack, Teams, or Google Workspace can offer.

The popularity and extent to which these tools are used internally at Amazon is unclear, but sources suggested they’re unpopular, which could explain the shift to a more modern productivity suite at the firm.

Burying the hatchet

For Microsoft and Amazon - traditionally fierce rivals in the global cloud computing space - to agree to a deal of this scale suggests a major pivot at Amazon.

Sources suggested that Amazon previously opted to use its own in-house productivity tools and on-prem software as part of a concerted effort to swerve rival products. 

This was, at least in part, due to a hesitancy to harness rival productivity tools and “save work” on competitor cloud frameworks. 

Amazon and Microsoft are yet to comment on the speculation. ITPro has approached both organizations for comment.