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Microsoft (MSFT)-FedEx Partner on Digital Overhaul of Commerce

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Microsoft (MSFT - Free Report) recently announced collaboration with FedEx (FDX - Free Report) for digital overhaul of commerce. The move is likely to take the fight to the e-commerce giant, Amazon (AMZN - Free Report) .

The aim is to offer multiple joint solutions driven by Azure and Dynamics 365 to aid businesses provide enhanced delivery experience to customers with efficient shipment tracking and inventory management capabilities.

Microsoft's intelligent cloud capabilities combined with digital and logistics network expertise of FedEx will be utilized to enhance visibility and transform the supply chain.

Markedly, Microsoft Azure is utilized by more than 95% of Fortune 500 companies. Meanwhile, FedEx networks link more than 99% of the world's GDP.

Thereby, the latest deal is a big win for Microsoft, and positions it well to expand presence in the cloud infrastructure market, currently dominated by Amazon Web Services (AWS), per Canalys data.

Increasing adoption of Azure to support shipment and routing workloads provides the cloud platform with immense exposure in the domain, which is a positive. Robust adoption of the company’s offerings is instilling investor confidence in this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


Notably, shares of the company have gained 17.2%year to date, outperforming the industry’s growth of 8.8%.

FedEx Surround at a Glance

The companies’ first joint solution — FedEx Surround — utilizes data to offer “near-real-time analytics” into shipment tracking and aid businesses in improving supply chain visibility.

FedEx Surround is designed to aid businesses track shipments on a near-real-time basis and ensure smooth deliveries of extremely critical time-sensitive products. FedEx Surround can gather multiple data points via FedEx’s advanced scanning and IoT technology and analyze it by leveraging Microsoft's AI, machine learning and analytics offerings.

The data-driven insights will aid users to drive operating efficiency and productivity and minimize friction and costs. Notably, customers can access FedEx Surround in the months ahead.

The companies intend to roll out more solutions in the coming months featuring higher integration with Microsoft’s advanced technologies, including Dynamics 365.

Severe Competition

Following the latest deal, Microsoft is well poised to capitalize on the increase in the Internet-delivery and online shopping services usage on account of the coronavirus pandemic.

Medicines and grocery items are essential daily items and hence, door-to-door delivery of these products has gained traction in this crisis scenario.

Besides, rapid delivery of these items is expected to help people counter the hard times. This demand bodes well for the prospects of joint solutions by collaborations among online retail companies, which are making every effort to enhance their delivery system.

Markedly, notable retailers including Walmart (WMT - Free Report) and Kroger, which also happen to be Azure’s clients, are striving to strengthen their e-commerce capabilities.

Moreover, FedEx Surround is expected to gain traction among major players in healthcare domain as it will ensure timely delivery of critical products, which are in high demand amid the pandemic.

It should also be noted that Amazon had temporarily severed the usage of FedEx’s ground delivery network for its Prime shipments, which require deliveries at ultrafast speed. Thereby, the latest deal is a good mix and highlights the intense competition in the market.

We believe this deal will provide both Microsoft and FedEx a competitive edge among retailers and businesses striving to enhance their delivery mechanism amid the coronavirus pandemic to stay competitive.

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