Microsoft, Walgreens Boots deal sends message tech giants want more
- Microsoft and Walgreens Boots Alliance Inc. (WBA) are partnering to create new ways to deliver outpatient healthcare services directly to consumers, the companies announced Tuesday. The seven-year agreement will tap Microsoft's technology backbone and WBA's retail and store reach to help personalize healthcare access.
- As part of the partnership, WBA will migrate its stores and 380,000 employees to Microsoft 365, which includes Windows 10 and Office 365. With Microsoft as its "strategic cloud provider," WBA will use Microsoft Azure to host the majority of its IT infrastructure.
- The companies also plan a multiyear research and development push to build healthcare solutions, providing funding, subject matter experts, technology and tools, according to the announcement. In 2019, WBA will pilot "digital health corners" in select stores to sell "heatlhcare-related hardware and devices."
No longer satisfied with providing the technology underlying most modern business, tech giants want more.
For Apple, it's dipping a toe into the streaming market. For Microsoft — and Amazon, with its sector-spanning venture — it's healthcare. Tech companies have changed how the world operates. Now they have the chance to change how humans operate, too.
This isn't Microsoft's first foray into healthcare technology. Through Microsoft Garage, the passion project playground for employees, the company developed technologies like Seeing AI, an app which helps visually impaired people interact with the world. But the deal with WBA is far more expansive and has a motive.
With competition from many sources, Walgreens wants to be seen as innovative, disruptive and dynamic, according to Ed Anderson, research vice president and distinguished analyst at Gartner. Microsoft's intention is the same.
The deal is a big, muiltiyear engagement to produce a strategic outcome in healthcare, Anderson said, in an interview with CIO Dive. Conveniently, it offers great competitive market plays as an outcropping of the relationship.
In addition to receiving a major customer for a long-term commitment, Microsoft got a development partner to bring healthcare solutions direct to customers.
The companies did not articulate all that the seven-year deal would hold, Anderson said. When customers and technology vendors sign three-year deals, they fall under the scope of what is possible with technology today. Once industry hits the five-year deal range, customers and vendors are making a more strategic statement of which direction they think technology will go.
But seven-years out, the future of technology is less certain, Anderson said. Where technology will be and what it can offer long-term is less clear.
There are clear indicators of the companies' strategy in the announcement. WBA and Microsoft will work on developing digital healthcare solutions; the companies will also migrate infrastructure to Microsoft's technology platform.
What's unknown is what is the bridge between those two efforts, Anderson said. How is Microsoft 365 and Azure going to bridge to the application of the new, digital healthcare scenarios?
In the near-term, industry has to wait to see what Microsoft and WBA will accomplish. The deal is grounded in a real orientation around business solutions and outcomes that have the potential to revamp access to healthcare.
If industry starts to hear news about joint engineering and development in the next year or so, it shows the potential and promise for the deal. Otherwise, it's just a big customer win for Microsoft.
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