FedEx and Microsoft Join Forces to Compete Against Amazon for Package Shipping

Competing in Today’s Digital Landscape

FedEx Corp. (NYSE: FDX) and Microsoft Corp. (Nasdaq: MSFT) today announced a new multiyear collaboration to help transform commerce by combining the global digital and logistics network of FedEx with the power of Microsoft’s intelligent cloud.

Together, FedEx and Microsoft aim to create opportunities for their customers through multiple joint offerings powered by Azure and Dynamics 365 that will use data and analytics solutions to reinvent the most critical aspects of the commerce experience and enable businesses to better compete in today’s increasingly digital landscape.

“FedEx has been reimagining the supply chain since our first day of operation, and we are taking it to a new level with today’s announcement,” said Frederick W. Smith, chairman and CEO, FedEx.

“Together with Microsoft, we will combine the immense power of technology with the vast scale of our infrastructure to help revolutionize commerce and create a network for what’s next for our customers.”

This new strategic alliance represents a long-term commitment between the companies to fuel innovation, collaborate on product development, and share subject-matter expertise.

Today, FedEx networks link more than 99% of the world’s gross domestic product across 220 countries and territories, and Microsoft Azure is trusted by more than 95% of Fortune 500 companies.

By combining the breadth and scale of the FedEx network and the Microsoft cloud, businesses will have an unprecedented level of control and insight into the global movement of goods.

“Now more than ever, organizations are counting on an efficient and capable supply chain to remain competitive and open for business,” said Satya Nadella, CEO, Microsoft.

“Together with FedEx, we will apply the power of Azure, Dynamics 365, and their AI capabilities to this urgent need, building new commerce experiences that transform logistics for our mutual customers around the world.”

Announcing FedEx Surround - Driving Digital Illumination of the Physical World

FedEx Surround, the first solution resulting from the FedEx and Microsoft collaboration, allows any business to enhance visibility into its supply chain by leveraging data to provide near-real-time analytics into shipment tracking, which will drive more precise logistics and inventory management.

While most carriers are reactive to global logistics dynamics with limited visibility options built into a package’s journey, FedEx Surround will provide near-real-time insights - down to the granular level of ZIP code, for example - to shine a digital light on the progress and movement of physical inventory.

The benefits offered by FedEx Surround will extend to any business with a supply chain and particularly those that depend on highly time-sensitive deliveries. For example, a hospital may urgently need a package to help save a life, or a part may need rapid transport to a manufacturing facility to avoid an operational shutdown. In each instance, the near-real-time data insights provided by FedEx Surround offer a significant advantage to not only the organizations using the platform but also the people they serve.

FedEx Surround can also collect multiple data points gathered through the enhanced scanning and proprietary IoT technology of FedEx and analyze them using Microsoft’s broad suite of AI, machine learning, and analytics solutions. This will provide participating businesses with not only enhanced visibility of a package’s location during its journey, but also knowledge of global commerce conditions and external challenges in near-real-time, such as severe weather or natural disasters, mechanical delays, clearance issues, and incorrect addresses.

This unprecedented level of data-driven insight will give FedEx Surround customers the opportunity to intervene early and act to avoid logistical slowdowns before they occur to reduce friction and costs. And with every package that ships, FedEx Surround will analyze past trends to identify future opportunities for streamlined shipping, creating a stronger and more resilient commercial ecosystem.

Information regarding FedEx Surround availability will be shared beginning this summer, and customer access will be rolled out in the months ahead.

FedEx and Microsoft expect to announce additional solutions as part of their collaboration in the coming months, which will leverage even more Microsoft technologies, including Dynamics 365. This includes reimagining commerce experiences for businesses to offer consumers more integrated ways to shop and faster and more efficient deliveries.

Cloud Battle

As reported by CNBC, the companies did not disclose the full nature of the partnership, including how much FedEx will be paying Microsoft to use its Azure cloud technology. But the partnership represents yet another example of Amazon rivals choosing to go with Microsoft’s cloud offering over the cloud computing market leader Amazon Web Services (AWS).

Amazon and FedEx have been increasingly competitive with each other as Amazon invests heavily in building out its own shipping network. FedEx announced last year that it would end its ground-delivery contract with Amazon. Amazon still gives FedEx plenty of business, but many think Amazon will eventually ship everything itself without the help of third parties.

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