FedEx And Microsoft Announce New Collaboration Set To Rival Amazon

FedEx and Microsoft have announced a multiyear collaboration that will combine FedEx's global logistics network and Microsoft's intelligent cloud. The new service, called FedEx Surround will be a package-tracking and logistics-intelligence service, utilizing Microsoft's suite of AI, machine learning and analytics solutions. This announcement comes as FedEx ends its partnership with Amazon.

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For over 25 years, FedEx has been the leader in providing online package tracking tools. Surround takes this to the next level by applying real-time information on weather, traffic, fires, natural disasters, and other factors to reroute shipments on the go.

"Together with Microsoft, we will combine the immense power of technology with the vast scale of our infrastructure to help revolutionize commerce and create a network for what's next for our customers," said Frederick W. Smith, Chairman and CEO of FedEx.

According to the release, the product's benefits extend to any business with a supply chain, focusing on those with time-sensitive deliveries, such as hospitals. FedEx Surround can also collect data points gathered by FedEx's IoT technology and analyze them with Microsoft's Azure, Dynamics 365 and AI capabilities. FedEx Surround will also analyze past trends to help make improvements to future shipments

The companies did not disclose any details of the partnership, including how much FedEx will be paying Microsoft to use its Azure cloud technology. Though, the collaboration does represent another instance of Amazon rivals choosing to go with Microsoft's cloud offering over the cloud computing market leader Amazon Web Services (AWS).

This announcement arrives as Amazon continues to invest in building out its own shipping network. While FedEx still carries out many of Amazon's deliveries due to third-party sellers, some are predicting that the e-commerce giant will soon cut out FedEx entirely and ship everything itself. UPS and the US Postal Service continue to be significant shipping providers for Amazon.

FedEx Surround will be available this summer, with other joint announcements coming later this year.

"Now more than ever, organizations are counting on an efficient and capable supply chain to remain competitive and open for business," said Satya Nadella, CEO of Microsoft. "Together with FedEx, we will apply the power of Azure, Dynamics 365 and their AI capabilities to this urgent need, building new commerce experiences that transform logistics for our mutual customers around the world."