What’s Really Behind the Walgreens-Microsoft Agreement?

On the face of it, news last week that Walgreens Boots Alliance and Microsoft had signed a seven-year strategic partnership to “transform health care delivery” seemed primarily centered on Walgreens migrating most of its IT infrastructure onto the tech giant’s Azure cloud platform. That wouldn’t exactly scream transformational change.

But the larger story is how the retailer and Microsoft will leverage the Azure platform and other tools to create what WBA CEO Stefano Pessina calls a “seamless ecosystem of participating organizations.” As Forbes magazine points out, the partnership indicates that more deals like this are ahead for Walgreens, which has avoided some of the expensive acquisitions of its competitor CVS Health.

The companies are also planning to develop a suite of chronic disease-management and patient-engagement applications, and to leverage Microsoft’s internet of things capabilities. Later this year, Walgreens will pilot up to 12 “digital health corners” in its stores to promote different health care-related hardware and devices.

Translation: Walgreens hopes to engage patients at a deeper level with the use of these technologies to give it a competitive advantage by providing more options for consumers.