Getting in bed with Amazon made Microsoft stronger

Amazon and Microsoft are fierce rivals in the cloud computing infrastructure industry. They have decided to collaborate on voice-assisted artificial intelligence.


Amazon was the first commercial promoter of voice-first artificial intelligence services via Alexa. Microsoft’s Cortana can benefit from the thousands of Alexa skills already available.


Microsoft’s Bing search engine gets access to Amazon Echo users. Alexa is now available on mobile devices and on cross-platform browsers.

Cortana-enabled devices can help Microsoft monitor the Amazon shopping habits of Cortana users. The always-on feature of smart speakers is a good way to study people in their homes.


Microsoft can improve its advertising business by building a better profile of people's Amazon shopping habits/preferences.


Microsoft (NASDAQ:MSFT) is the fastest-growing rival of Amazon (NASDAQ:AMZN) in cloud infrastructure. Azure and AWS are the two leaders in the $11 billion/quarter cloud infrastructure business. However, they have entered into a new partnership. Microsoft and Amazon agreed to let each other’s voice-based artificial intelligence platforms Alexa and Cortana work together.


By collaborating, Microsoft and Amazon positioned themselves to better benefit from the coming $13 billion (estimate for 2024) market for smart speakers. This initial cooperation can also lead to Azure and AWS accessing each other’s user population. Microsoft is promoting Cortana for the enterprise. Alexa is also being proposed to help small businesses. Some of the 20,000 Alexa skills available today allow businesses to interact with their product/service users/buyers.

This new alliance can help negate the looming threat of Alphabet’s (NASDAQ:GOOG) (NASDAQ:GOOGL) plan to offer its Google Assistant to third-party device manufacturers. Google Assistant is already considered as the best digital assistant. Amazon and Microsoft needed each other to keep pace with Google Assistant. Amazon and Microsoft both failed as a smartphone vendor. They can help each other become decent vendors of smart speakers.