How the Walmart-Microsoft partnership builds on the four strategic themes for digital transformation
Walmart and Microsoft recently announced a five-year strategic partnership to further accelerate digital innovation in retail. This comes as a major announcement both for observers of the cloud wars as well as observers of the continuing digital transformation in retail. The agreement will leverage a broad base of Microsoft’s cloud, AI and IoT solutions for Walmart’s enterprise-wide use – including a wide range of external customer-facing services and internal business applications.
To explore some of the details within this agreement, I recently spoke with Karen Garrette, Microsoft’s worldwide lead for retail strategy, to gain some first-hand insights and to examine how their strategy maps to the four strategic themes for digital transformation – a framework I researched and developed in ”Mastering Digital Business” to help decode the digital DNA of world-leading organizations.
The first strategic theme for world-leading digital organizations relates to the use of platform business models to provide a digital core and to enable permissionless innovation across an ecosystem of constituents. These models also enable organizations to move from linear value chains to multi-dimensional value networks. At their core is a digital platform that provides a cloud foundation, security and governance, data and analytics, service catalog, service integration and management, and industry services and microservices.
In the five-year agreement, Walmart has selected the full range of Microsoft cloud solutions, including Microsoft Azure and Microsoft 365 to “further accelerate Walmart’s digital transformation in retail, empower its associates worldwideand make shopping faster and easier for millions of customers around the world.”
According to Microsoft’s Garrette, the Walmart-Microsoft team is taking a modular approach to building out capabilities and plans a broad set of cloud projects including customer-facing and internal applications that will utilize AI, analytics, data platform, machine learning, IoT and many other capabilities in support of Walmart.com and SamsClub.com as well as in-store and associate applications.
Building on the Azure platform will provide the flexibility, security and scalability that Walmart needs to serve its nearly 270 million customers and approximately 2.3 million associates worldwide. While Microsoft is not yet sharing details on the partner ecosystem, it’s clear this will play a key part in the future model as well.
Leading practices in innovation are critical to help align the corporate innovation engine with the goals and objectives of digital transformation and to support the notion of moving from idea-centricity to exploring “where to play” and “how to scale” to maximize results.
According to Garrette, Microsoft has changed the way it brings innovation to customers considerably in recent years and focuses heavily on client co-innovation and collaboration. The Walmart-Microsoft teams will be focused on topics such as how to make shopping faster and easier for customers, how to empower employees with the latest tools, how to leverage the cloud to deliver functionality into new markets (as opposed to van-delivery), how to leverage IoT to reduce energy usage for connected HVAC and refrigeration units in thousands of U.S. stores, and how to apply machine learning when routing thousands of trucks in the supply chain.
