An internal document has revealed Amazon is going to pay over $1 billion for Microsoft 365 licenses.

As Business Insider reports, Amazon's employees currently use on an on-premise version of Microsoft Office, but a transition to Microsoft's cloud-based 365 suite is planned. The scale of the transition is huge, with Amazon requiring over a million seat licenses.

The internal document, combined with comments from a person familiar with the situation who asked not to be identified, reveal the move from on-premise to cloud-based 365 apps will begin in November with an initial setup phase. Amazon employees will then transition over in early 2024.

The move is set to cost Amazon more than a $1 billion, which it expects to pay over a five-year period. It's unclear why Amazon decided to make this switch, especially as it has its own document collaboration and sharing solution (WorkDocs) and video chat solution (Chime). By moving to 365, Amazon is also signing up to rely on Microsoft's cloud infrastructure rather than its own (AWS).

Microsoft has been working to improve 365 over the past year. The apps can now automatically update in four seconds, there's a new default theme, and is preparing to add an "everyday AI companion" to the suite in the form of Copilot.