Microsoft Lines Up Yet Another Retailer, Walgreens, in Latest Challenge to Amazon

January 15, 2019, 8:33 PM UTC

Microsoft (MSFT) has lined up yet another retailer in its challenge to’s (AMZN) cloud business: drugstore operator Walgreens Boots Alliance. (WBA)

The technology company and Walgreens on Tuesday announced a seven-year agreement under which Microsoft will provide cloud services to its new partner, the second largest pharmacy chain in the U.S. behind CVS Health (CVS) with nearly 10,000 stores, by migrating most of its tech infrastructure to Microsoft Azure. The companies cited the complexities of the American healthcare as a new area of opportunity.

“Improving health outcomes while lowering the cost of care is a complex challenge that requires broad collaboration and strong partnership between the health care and tech industries,” said Microsoft CEO Satya Nadella in a statement. The companies said they would jointly conduct research to develop health care services. Later this year, Walgreens will pilot “digital health corners” at as many as 12 of its stores.

Walgreens joins Walmart, Kroger and Gap Inc among major retailers to have recently announced partnerships with Microsoft, whose Azure, as Fortune’s Adam Lashinsky put it in an article on Tuesday, is at the nexus of Microsoft’s “intelligent edge” strategy wherein every product and service aims to strengthen Azure, its growth engine.

Amazon has also been making moves into healthcare, though its overall intentions remain unclear. Last summer, the company said it was buying online pharmacy PillPack in a deal estimated at $1 billion aimed at giving it a platform through which to sell pharmaceuticals. The company has also teamed up with Berkshire Hathaway and JPMorgan Chase to eventually create a new health care company to redesign health care provided to their employees. Meanwhile, CVS, which recently closed a deal to buy insurer Aetna, has said it would turn large areas in some stores into health clinics.

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