Cloud wars: Beating out Amazon Web Services, Microsoft lands 5-year deal with Gap

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Microsoft Corp. today announced that it has struck a five-year cloud computing deal with The Gap Inc. that will see the apparel giant shift much of its operations to Azure.

Gap, which generated $15.9 billion in sales last year, is the latest traditional retailer to choose Azure over Amazon Web Services, the industry’s biggest cloud platform by a wide margin.

The deal follows a similar announcement from Wal-Mart Stores Inc. in July. The company inked a far-reaching cloud deal with Microsoft focused squarely on countering Amazon.com Inc., with Microsoft Chief Executive Satya Nadella naming their mutual rival as a “core” influence on the alliance.

Like Walmart, Gap said it plans to migrate hundreds of existing applications to Azure. The company will start with the key inventory, store and site management systems powering its vast retail empire, which comprises more than 3,400 locations.

Gap also has a sizable e-commerce operation that is likewise a focus in the deal. The company plans to build a “centralized data platform” on Azure to deliver new personalized merchandising, marketing and service capabilities for customers. Gap will draw on the analytics and machine learning tools available on Azure as part of the project. 

To support this cloud-focused roadmap, the apparel giant intends to move application development operations to the platform as well. And to top it all off, Gap will roll out the Office 365 productivity suite to employees. 

“Azure is going to play a very, very big role for us to be able to scale our business seamlessly,” said Gap Chief Technology Officer Rathi Murthy. “We’ve seen a huge transformation in the whole retail industry in shopping patterns. Our online business continues to grow, so we need to make sure our platform is fast, responsive and able to scale.”

Microsoft isn’t the only cloud giant benefiting from the apparent reluctance of some major retailers to use AWS. Google LLC, the third-largest player in the cloud market, has racked up contracts with big names such as The Home Depot Inc. and Target Corp.

AWS, for its part, continues to maintain a comfortable lead in the market: The Amazon subsidiary saw revenues jump 46 percent to $6.68 billion last quarter. Amazon’s cloud unit also cites a number of retail customers, such as Brooks Brothers and Lululemon Athletica.

And it continues to win other deals. Microsoft’s announcement of the Gap deal comes just days after Korean Air Lines Co., South Korea’s flag carrier, revealed plans to move its entire information technology infrastructure to AWS over the next three years.

Photo: Unsplash

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