The two said their first service, called FedEx Surround, will give real-time analytics into supply chain and delivery, so companies could potentially better ship goods.
The companies did not disclose the full nature of the partnership, including how much FedEx will be paying Microsoft to use its Azure cloud technology. But the partnership represents yet another example of Amazon rivals choosing to go with Microsoft's cloud offering over the cloud computing market leader Amazon Web Services (AWS).
Amazon and FedEx have been increasingly competitive with each other as Amazon invests heavily in building out its own shipping network. FedEx announced last year that it would end its ground delivery contract with Amazon. The e-commerce and tech giant still gives FedEx business thanks to third-party sellers who use it to ship packages. But many think Amazon will eventually ship everything itself without the help of third parties.
Microsoft and FedEx's offering, which will be available later in the year, will collect data through FedEx's IoT technology and analyze it through Microsoft's suite of services, and could help predict issues that would slow delivery, such as severe weather or clearance issues. That could allow companies to change routes in order to deliver goods more quickly.