Coca-Cola taps Microsoft for 5-year multicloud, software deal

Dive Brief:

The Coca-Cola Company entered a five-year deal with Microsoft to use its software and cloud products, the companies announced Monday. The soft drink maker plans to "gain new insights from data across the enterprise" using Microsoft Azure, Dynamics 365 and Microsoft 365.
The deal provides all 86,000 Coca-Cola employees access to Dynamics 365 Customer Service, the Power Platform and Microsoft Teams. Microsoft and Coca-Cola representatives declined to comment on the cost of the deal.
Coca-Cola aims to use Microsoft technology to replace previously disparate and fragmented systems, said Barry Simpson, SVP and chief information and integrated services officer of The Coca-Cola Company, in a statement.

Dive Insight:

In the $50-billion IaaS market, Microsoft is a holistic vendor that can envelop a customer in a broader set of solutions than market-leader AWS can. It can compete across almost every sector of software and the cloud.

Back in 2016, Google Cloud announced Coca-Cola as a banner customer alongside Disney. Now, right as financial outlooks look dreary, Coca-Cola is tapping Microsoft and its "tech intensity" approach to enterprise technology.

"Although Coca-Cola primarily relies on Microsoft cloud technologies, we use an appropriate mix of other cloud providers to maintain solution diversity," said Scott Leith, VP of global external and financial communications at The Coca-Cola Company, in an email to CIO Dive.

Coca-Cola net revenues slid 1%, with operating income also dipping by 2%, the company said during its earnings call for Q1 2020 last week. The company is looking to boost efficiency by leveraging Microsoft's set of tools amid a complicated economic forecast, which chairman and CEO James Quincey expects will lead to "significant impact" in the second quarter.

The stay-at-home orders brought about by the pandemic also played a role in Coca-Cola's adoption of Microsoft technology. As the majority of CFOs expect at least some of their workforce to work remotely on a permanent basis, the soft drink maker is turning to Microsoft to facilitate remote work, deploying Microsoft 365 and Microsoft Teams to its employees worldwide.

Collaboration tools became a key focus of enterprise while the pandemic unfolded. Now, companies are rebuilding their IT priorities, deferring capital-intensive modernization projects and focusing on technology that can power remote work.