Walmart: Microsoft's Digital Transformation Test Case

Microsoft's collaborative deal with Walmart is shaping up to be a digital transformation laboratory.

The companies announced a five-year agreement in July that included enterprisewide use by Walmart of Microsoft Azure cloud services and Microsoft 365, the end user package that includes Office 365, Windows 10 and Enterprise Mobility + Security (EMS) functionality.

As one of the first steps in the agreement, the companies on Monday unveiled that they would be jointly staffing a "cloud factory," basically an expansion of Walmart's existing technology center in Austin, Texas (pictured), early next year. In all there will be 30 technologists in the office, which will include an undisclosed number of Microsoft engineers mixed in with the Walmart technology specialists.

The cloud factory's assignment includes a lot of the types of projects Microsoft has been routinely encouraging customers to undertake. In the lift-and-shift category, they'll be migrating thousands of internal Walmart business applications to Azure. The team will also be building new, cloud-native applications.

Beyond modernizing applications by putting them in Azure, the collaboration will include work on emerging technologies. For one thing, Walmart already has Internet of Things (IoT) sensors in a lot of locations.

Clay Johnson, Walmart executive vice president and enterprise chief information officer, said in a Q&A on Microsoft's site that they'll work with Microsoft to get data from existing and future sensors into Azure, where they can analyze it in new and different ways.

"With our IoT work and sensor enablement, we're looking at our energy consumption and other factors to predict equipment failures before they happen. Improving equipment performance can result in enhanced energy efficiency, which lowers costs and our carbon footprint," Johnson said. "Putting IoT data into edge analytics lets us look at data at a store level and backhaul it to Azure to look at it across a region or the whole U.S. We started talking to Microsoft about this concept of a set of stores being a 'micro-cloud,' and you roll them into Azure for data analytics and insights."

Artificial intelligence (AI), chatbots and natural language processing -- three more hot areas of digital transformation -- will also get tested at a massive scale in the Walmart environment, spearheaded by the Austin-based joint team.

Projects will include internal chatbots designed to help Walmart's 2.2 million employees navigate benefits, chatbots for managing supplier interactions and natural language processing of terabytes of unstructured text to improve business operations.

"Microsoft's going to get to see stuff at a scale they've never seen before," Johnson said of the Walmart environment. The retailer had $500 billion in revenues in fiscal 2018 and operates 11,200 stores worldwide. "I think they'll learn a lot from our footprint. Co-locating top engineers from both companies will deepen the technical brainpower for creating disruptive, large-scale enterprise solutions for Walmart."

Posted by Scott Bekker on 11/05/2018 at 12:52 PM