Microsoft in talks to sign on Amazon as customer in $1 bln cloud tools deal

 (Reuters) – Microsoft in a deal worth over $1 billion, news site Insider reported, citing an internal document and a person familiar with the matter.

The e-commerce giant has committed the amount for over five years and to secure more than one million Microsoft 365 license seats, according to the report.

Microsoft, whose shares gained nearly 1% in extended trading following the report, declined to comment. Amazon did not respond to Reuters’ request for comment.

Amazon is expected to start setting up the new systems in early November, the report said, adding that the company currently uses a local, on premise version of Microsoft’s Office products.

The move would be a radical one for Amazon, and a major win for Microsoft. The two companies are bitter cross-town rivals and rarely work together or give each other business on a scale like this.

A person familiar with Amazon’s operations said the company stayed off of the cloud version of Microsoft’s 365 products because they didn’t previously want to save anything on a competitor’s cloud. Microsoft and Amazon declined to comment immediately when contacted by Insider on Tuesday.

One potential draw for Amazon is that employees would have alternatives to in-house products such as WorkDocs and Chime, which are not that popular. Amazon has tried to offer cloud-based productivity tools to other business customers, but those services have not had huge uptake generally.