Here’s What the Microsoft-Walgreens Deal Indicates



Walgreens signs up for Microsoft cloud services

Microsoft (MSFT) and Walgreens (WBA) announced last month that they would cooperate on developing digital healthcare solutions. The companies have their sights set on improving healthcare outcomes while reducing healthcare costs.

Among other things, Microsoft will bring to the table technology to connect people with Walgreens stores so they can access healthcare services whenever and wherever they need them. As part of this program, Walgreens has signed up for Microsoft’s cloud services and will start selling healthcare-related digital devices at some of its stores this year.

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$379 billion up for grabs in the digital health market

The Microsoft-Walgreens partnership shows the companies laying the groundwork that will allow them to better capitalize on the rapidly expanding digital health market. The global digital health market was valued at $71.4 billion in 2017 and will exceed $379 billion by 2024, Global Market Insights estimates show.

Amazon (AMZN), JPMorgan Chase (JPM), and Berkshire Hathaway (BRK) also have their sights on this market. Last year, the three companies announced that they would be teaming up on a program aimed at improving care outcomes and lowering the cost of their employee health insurance.

Outside the joint venture with JPMorgan and Berkshire, Amazon has its own ambitions in the healthcare market that could see the company clash with Microsoft in the future, considering its partnership with Walgreens. Last year, Amazon acquired online pharmacy company PillPack, sparking speculation that the company may be looking to shake up the drugstore industry. Walgreens is one of the largest drugstore companies in the United States.


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