Dive Brief:

• Walgreens Boots Alliance and Microsoft announced Tuesday a multiyear strategic partnership aimed at developing new models for healthcare delivery that improve health outcomes while reducing costs of care.
• Under the deal, Walgreens will use Microsoft Azure, the tech giant's cloud and artificial intelligence platform, for the bulk of its IT infrastructure. Microsoft will also roll out its 365 line of subscription services to more than 380,000 Walgreens employees. 
• The companies will also collaborate on novel health networks and care management tools using Azure and AI and look into establishing joint innovation centers in key markets. This year, they plan to pilot up to 12 store-in-store "digital health corners" to market select healthcare-related hardware and devices.

Dive Insight:

Cloud-based platforms are becoming ubiquitous in healthcare, and Walgreens' choice of Microsoft infrastructure is bound to sting competitors like Amazon. With about 9,560 drugstores, 85,000 healthcare service providers and more than 1 billion prescriptions filled per month, the company offers huge growth potential for any cloud-based venture. 

And while Microsoft doesn't nab as many healthcare headlines as Apple, Amazon and Google, it has shown itself to be a serious player. 

In November, the company announced the availability of FHIR Server for Azure, an open source project on GitHub aimed at easing exchange and management of healthcare data in the cloud. That followed a joint commitment with Google, Amazon, Oracle, IBM and Salesforce to remove barriers to adoption of technologies for healthcare interoperability, especially those enabled through the cloud and AI.

Microsoft's creation of a formal healthcare unit last year signaled intent to double down on tools and services for the space. The Walgreens deal comes on the heels of an agreement with Veradigm, Allscripts' life sciences arm, to develop a cloud-driven model for clinical trials. 

Walgreens has been steadily expanding its healthcare footprint beyond retail and pharmacy. The company recently teamed up with Alphabet's Verily on a pilot project aimed at improving medication adherence. The company is also collaborating with Michigan-based McLaren Health Care to provide urgent and primary care services at some of its stores, and has been in talks with Humana about deepening that relationship, possibly through equity stakes. 

"Our strategic partnership with Microsoft demonstrates our commitment to creating integrated, next-generation digitally enabled health care delivery solutions for our customers, transforming our stores into modern neighborhood health destinations and expanding customer offerings," Stefano Pessina, executive vice chairman and CEO of Walgreens, said in a statement.