What you need to know A new report suggests that Microsoft is preparing to bring on Amazon as a customer for its Microsoft 365 cloud productivity tools.The megadeal will cost Amazon up to $1 billion to acquire one million Microsoft 365 licenses for its corporate employees.Amazon employees have been using traditional, on-premises Microsoft Office software, but the company seems ready to transition to cloud-based productivity tools.A source revealed that Amazon was reluctant to make the transition before because it didn't want to store its data on Microsoft's cloud.Microsoft will start setting up the new systems next month, with the full transition expected early next year.

Microsoft is reportedly getting ready to bring on Amazon as a customer for its Microsoft 365 cloud productivity software. If true, this would see the long-standing rivalry between both companies end, or at least change quite a bit, as it transforms into a business partnership. 

Per internal documents and a source familiar with the megadeal, Amazon will part with up to $1 billion within a span of five years to secure one million Microsoft 365 licenses for its corporate employees and workers with frontline roles within the corporation, as reported by Insider. 

To this end, Amazon employees have used traditional, on-premises Microsoft Office software, but the megadeal with Microsoft is its first step toward transitioning to Microsoft's 365 cloud productivity tools. A person with close affiliations with Amazon's dealings disclosed that the company was previously reluctant to transition because it didn't want to store its data on Microsoft's cloud services. 

The person familiar with this deal further indicated that Microsoft is expected to start setting up these new systems for Amazon as early as November, while the full transition for Amazon employees is expected to take place early next year.

Admittedly, this is no easy feat, given the scale of the corporation. The source revealed that the magnitude of this deal would require elaborate measures to facilitate a seamless and smooth transition, which includes proper allocation of cloud resources and more people on deck across Microsoft Office and security organizations to ensure that the high demand for the services is satisfied.

Amazon vs Microsoft 365 may soon change

Amazon's AWS is relatively cost-friendly compared to Microsoft's cloud-based productivity tools, but the latter is more popular across organizations and offers more variety. Given the magnitude of this deal, it's a major win for Microsoft.

Neither of the companies has responded to confirm or deny the allegations. We'll have to wait and see what happens in the next few months.

Do you think the Microsoft and Amazon megadeal will pull through? Please share your thoughts with us in the comments.