The world’s largest software maker Microsoft Corp. (MSFT - Analyst Report) will now be helping popular retailer J. C. Penney Company Inc. (JCP - Analyst Report) to update its technology solutions. J. C. Penny’s employees will use Microsoft Office 365 throughout the company, thus enabling efficient sharing of information and eventually improving customer service.
Microsoft’s Office 365 is a cloud-based subscription-based software service. It was officially launched in 2011.
J. C. Penney operates more than 1100 stores across the U.S. and Puerto Rico. The stores also house several leased departments such as Sephora, Seattle's Best Coffee, optical centers, portrait studios, jewelry repair, as well as the conventional merchandise normally found in a departmental stores.
J. C. Penney is deploying Office 365 for its more than 177,000 employees located across its 1000 stores in the U.S. alone. The employees of J. C. Penney can access the latest Microsoft Office software from their smartphones, PCs or other smart devices, thus making their job easier.
The software will help in bringing together its workforce on a single platform, thus allowing them to transfer relevant information at a faster rate. This will eventually improve the flow of communication between them, allowing team members to work effortlessly. All of these will ultimately help in bringing a unique shopping experience to J. C. Penney’s customers.
J. C. Penney has been seeing stiff competition from the likes of Wal-Mart (WMT - Analyst Report), Target (TGT - Analyst Report) and Macy’s (M - Analyst Report). Amazon.com Inc. (AMZN - Analyst Report), the leader in the online retail segment, is also making life difficult.
Technology investments are very important for a retailer in an increasingly digital world and it is possible that the company will also opt for other Microsoft software; particularly so, since it has seen issues with maintaining an optimal selection that has impacted demand.
Just a few days back, the U.K.-based retailer Tesco also deployed Office 365 at its headquarters and across its stores and field offices in Europe and Asia.
Microsoft has been battling the slump in the PC market caused by sluggish economy. In addition, the popularity of smartphones and tablets from Apple Inc. (AAPL - Analyst Report) and Google Inc. (GOOG) have been cannibalizing PC market sales. Thus, these collaborations may ease some pressure on Microsoft going forward.
As per research conducted by IDC, cloud-based services may grow into a $100.0 billion market by 2016, representing a compound annual growth rate (CAGR) of 26.0%. Cloud services are expected to drive the growth in IT going forward, generating 41.0% of all growth in IT by 2016. Thus the strengthening of Microsoft’s position in the segment is encouraging, as the PC market is showing no signs of revival in the near future.
Microsoft reported revenue, excluding deferrals, of $16.01 billion in the first quarter of fiscal 2013, down 11.4% sequentially and 7.9% from the year-ago period. Revenues also missed the consensus by 2.5%.
Microsoft, Apple, Google, Amazon, Target, Macy’s and Wal-Mart all have a Zacks Rank #3 (Hold), while J. C. Penny has a Zacks Rank #5 (Strong Sell).