Walgreens teams with Microsoft

Walgreens Boots Alliance is teaming with Microsoft to design “digital health corners” for its stores as both companies battle an ever-expanding Amazon.com.

For Walgreens, the pharmacy giant must contend with looming competitive threats from Amazon and other upstarts looking to disrupt the drugstore business. Meanwhile, Microsoft is angling to gain ground against Amazon Web Services by offering backend computing muscle to retail, grocery and health operators.

As part of the accord, Walgreens will begin using Microsoft’s Azure cloud-computing software, moving applications and data to the tech giant’s data centers, the companies said. For Microsoft, it’s the second major Azure-centered deal with a retail chain this month, following a pact with grocer Kroger Co. last week.

Walgreens has forged a series of agreements amid a rapidly evolving health-care and retail landscape. After CVS agreed to buy health insurer Aetna, Walgreens set up a senior clinic venture with insurer Humana. And to ramp up its technological and e-commerce sophistication, it inked deals with Verily Life Sciences, a unit of Google parent Alphabet Inc., and Birchbox cosmetics.

The deal with Microsoft will start with a pilot of digital health corners in as many as 12 stores this year, which will be designed to promote sales and help patients manage chronic diseases.