Walmart teams with Microsoft as fight with Amazon intensifies

Walmart (WMT) announced today a strategic partnership with Microsoft (MSFT) to further accelerate its digital transformation in retail as it tries to fend off Amazon (AMZN). In another signal that its pitched battle with the e-commerce giant is intensifying, the world's largest retailer is also reportedly considering launching a subscription streaming video service to compete with Prime Video and Netflix (NFLX). CLOUD PARTNERSHIP: Walmart announced it is establishing a strategic partnership with Microsoft to "further accelerate Walmart's digital transformation in retail, empower its associates worldwide and make shopping faster and easier for millions of customers around the world." Through this partnership, Walmart has chosen Microsoft as its preferred and strategic cloud provider. Walmart, which is already using Microsoft services for critical applications and workloads, will now embark on a broad set of cloud innovation projects that leverage machine learning, artificial intelligence, and data platform solutions for a wide range of external customer-facing services and internal business applications. In a five-year agreement, Walmart has selected the full range of Microsoft cloud solutions, including Microsoft Azure and Microsoft 365, for enterprise-wide use to help standardize across the company's family of brands. As part of the partnership, Walmart and Microsoft engineers will collaborate on the assessment, development, and support phase of moving hundreds of existing applications to cloud native architectures. SUBSCRIPTION STREAMING VIDEO SERVICE: According to The Information, Walmart is considering launching a subscription streaming video service to compete with Netflix and Amazon Prime Video, even though such a move could be "enormously costly" for the retailer. Walmart is thinking of a service priced below $8 per month, a source told the publication. WHAT'S NOTABLE: Walmart already owns a video streaming service called Vudu, which the retailer fully integrated with Walmart.com back in 2011, allowing for customers to shop for digital titles. The service is closer to Apple's (AAPL) iTunes model than Netflix or Hulu Plus, as rather than stream movies based on a monthly subscription, users are able to rent individual titles or purchase them outright. PRICE ACTION: In afternoon trading, shares of Walmart have gained almost 1% to $88.34. Meanwhile, Amazon, which is in the midst of its yearly "Prime Day" event, is up 1.4% to $1,848.50 per share.