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Amazon Inks a $1 Billion Deal with Microsoft for its 365 Productivity Suite

Amazon has reportedly paid $1 billion to license Microsoft 365 for its cloud services, despite having its own productivity apps.

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According to an Insider report on Tuesday, has agreed to a deal with , purchasing a million seats of Microsoft 365 for a staggering $1 billion. The deal, set to stretch over a five-year period, will see the tech behemoth transition from reliant on-premises Microsoft Office products to cloud-based solutions as early as next month.

A Shift to Cloud-Based Productivity

It appears that despite having its own collaboration and productivity tools like AWS WorkDocs and WorkMail under Amazon Web Services, Amazon will transition its personnel to Microsoft's cloud-based suite. The company has been reported to kick off the switch to Microsoft 365 in November, a date possibly aimed to sync with the November 1 release of Microsoft's AI-powered Microsoft 365 Copilot product. The migration will extend up to 2024 and will impact both core corporate employees and the frontline workers of Amazon.

Rival Companies Brace for Impact, Amazon's Switch Reflects Shift in Strategy

On the Microsoft front, the company is reportedly preparing its Office and security organizations to adeptly manage the imminent resource challenges of having Amazon as a major customer. The final confirmation of this unexpected collaboration, however, remains unverified as neither company has officially announced the deal at the time of writing this report.

Historically, Amazon and Microsoft have maintained a rivalry, particularly within the public cloud domain where both companies are significant contenders. Amazon holds the leading position in terms of market share, although recent quarters have shown slowing growth whereas Microsoft's growth has been on an upward trajectory. The competition escalated during 2019-2021 when both companies entered a bidding for a significant Department of Defense cloud contract. This wrangle concluded in 2022 with the DoD dividing the contract among Microsoft, Amazon, , and Oracle.

Luke Jones
Luke Jones
Luke has been writing about all things tech for more than five years. He is following Microsoft closely to bring you the latest news about Windows, Office, Azure, Skype, HoloLens and all the rest of their products.

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