Gap chooses Microsoft's cloud, as retailers avoid AWS

Dive Brief:

Microsoft signed a five-year deal with clothing retailer Gap Inc. to its list of Azure customers Friday, reports CNBC.
Gap will use Azure's public cloud and move employees onto Microsoft 365 services like Windows 10, Office 365 productivity app bundle and the Enterprise Mobility and Security suite, according to the report. The retailer wants to use Azure for e-commerce operations, inventory and workforce systems.
Azure is now Gap's primary cloud provider. Retailers shy away from Amazon Web Services because they want "a partner that is not going to be a competitor of theirs in any other parts of their businesses," Shelley Bransten, corporate VP for global retail and consumer goods at Microsoft, told CNBC.

Dive Insight:

Traditional retailers are shying away from the old ways of doing things, like maintaining their own data centers. The cloud enables more agility and real-time data to better connect their global customer base. Migrating to the cloud takes the onus of data center management and costs off of a company.

In July, Walmart signed a similar five-year cloud deal with Microsoft. The companies already had partnerships for handling Walmart's critical workloads and apps and just announced another extension of their partnership to unite their engineers.

Turning to the No. 2 cloud provider as a retailer's primary public cloud highlights an industry AWS might have issues tapping into. Microsoft is able to scoop up retailers wary of using Amazon as a cloud provider because it's a competitor in the e-commerce space.

The disruption in retail is working to Microsoft and Google's advantage. Kroger split its cloud loyalty between Google and Microsoft while retailers including Target, eBay, Best Buy and L.L. Bean have turned to Google.