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Microsoft CEO Satya Nadella Stephen Brashear/Getty Images
Microsoft CEO Satya Nadella

Microsoft Pushes Cloud Services to Retailers Anxious to Avoid Amazon

Retail customers are key to Microsoft's competition with Amazon and Salesforce.

Dina Bass (Bloomberg) -- Microsoft Corp. is unveiling new cloud tools designed for retail customers, seeking to position itself as an alternative to Inc. and corporate software companies like Slack Technologies Inc. and Inc.

Microsoft is adding a feature to its Slack rival, the Teams corporate chat program, that lets store workers push a button to turn their mobile phones into walkie-talkies for in-store communications. In a speech on Jan. 12 at a retail industry event, Microsoft Chief Executive Officer Satya Nadella plans to discuss how Ikea shifted more than 70,000 workers to Teams, using the service for meetings and chat. The home furnishing giant’s largest store, in Stockholm, also started using a scheduling feature to manage the shifts of 150 restaurant staffers.

Ikea is also working with Microsoft to determine if Teams can play a role in its “store of the future” concepts. The Swedish company may put video screens in stores that use Teams to connect customers with kitchen design advisers, said Kenneth Lindegaard, an Ikea vice president. The company plans to have the rest of its 165,000-person workforce on Office 365 cloud software and Teams by the end of spring, although Ikea still has some smaller groups using Slack and Google’s G Suite, he said.  Ikea also uses Microsoft’s Azure and Google Cloud, he said.

The retail industry has been one of Microsoft’s most successful as the software maker tries to gain ground in cloud computing against market leader Amazon Web Services and lure more customers to its internet-based Office products. Some retailers are loath to work with e-commerce rival Amazon. Nadella and Google Cloud chief Thomas Kurian spoke this week at the annual show of the National Retail Federation, the biggest retail trade group, underscoring how significant the industry is to Amazon’s biggest cloud competitors.

 “A key part of our offering is that we partner and we don’t compete,” said Shelley Bransten, the vice president who oversees Microsoft’s work with retailers and consumer goods companies. But there are other benefits to working closely with retailers, she said in an interview. Some of the software products built for retailers will be useful for companies in other industries.

For example, the walkie-talkie feature in Teams can help manufacturers, said Emma Williams, a Microsoft vice president who is charged with adding features to Office and Teams for use by customers in health care, retail, manufacturing and finance. 

Microsoft explained the new features in a blog post head of Nadella’s speech in New York, the CEO’s first appearance at the retail conference.

Retail customers are also key to Microsoft’s competition with Salesforce, the leader in cloud-based customer relations software. Microsoft announced the official release of its Dynamics 365 Commerce software for helping retailers manage inventory, scheduling, call centers, e-commerce sites and in-store operations. The company said outerwear maker Canada Goose Holdings Inc. has been using it. 

Microsoft also provided new details on how some previously announced Azure customers are working with its products. One year ago, Microsoft said Walgreens Boots Alliance Inc. would begin using Azure and deploy Microsoft 365—a collection of software that includes Windows 10, Office cloud services and security and mobile-management software—to the pharmacy giant’s more than 380,000 workers. Now Walgreens will try Microsoft’s HoloLens 2 goggles for worker training and the drugstore chain also is using Microsoft products to anonymously track shoppers’ steps, in order to better plan store layouts. 

Microsoft is also targeting another lucrative Amazon business — digital advertising for products on retailers’ websites. In August, Microsoft acquired New York-based PromoteIQ, which helps companies like Kroger Co. and Kohl’s Corp. sell ads on their websites to companies who want prime placement for their goods. Nadella will announce Home Depot has also signed up for the service.

TAGS: Business Cloud
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