Brief:

• Amazon and Microsoft, the tech giants that compete to offer cloud computing services, are working together on voice computing. The companies on Wednesday announced a collaboration to let their voice-enabled digital assistants, Amazon’s Alexa and Microsoft’s Cortana, talk to each other, a press release said.

• Users of Amazon’s voice-activated Echo speakers will be able to reach Microsoft’s digital assistant by saying, “Alexa, open Cortana.” Then they can access work calendars or book a meeting in Microsoft’s Outlook, for example. Windows 10 users will be able to say, “Cortana, open Alexa” to control smart-home devices, shop on Amazon or use the more than 20,000 skills built by third-party developers.

• The companies won’t share customer data, The Wall Street Journal reported. The companies will only exchange necessary information to process voice requests while following their customer privacy policies, an Amazon spokeswoman told the newspaper.

Insight:

As Amazon and Google continue to duke it out for dominance in digital home assistants, recent news suggests strategic partnerships could provide an important advantage. For marketers, this means they can reach more consumers via voice-activated devices.

Amazon’s collaboration with Microsoft will help to expand Alexa’s reach beyond the estimated 10.7 million Echo devices the company has sold between November 2016 and March, as measured in a study. Cortana works on the 500 million computers running Windows 10, but the digital assistant only has 141 million monthly users, Microsoft said in May.

Alexa and Cortana complement each other’s services as competitors like Apple and Google seek to improve the capabilities of their digital assistants. Alexa has focused on home-automation and consumer needs, and is giving developers a way to make money by developing specialized skills for the service. Cortana, which works on PCs and Xbox One game consoles, is more integrated with Microsoft’s Office software.

Walmart this month partnered with Google to bring voice shopping to Walmart customers, using Google's voice-assistant technology on both Google Home and the Google Express website and app, according to blog posts from both companies. Shoppers can also choose to link their Walmart account to Google for "personalized shopping results," according to Sridhar Ramaswamy, Google's senior vice president of ads and commerce, who announced the tie-up in a blog post.

When big names put aside their competition in some areas to partner in others, like we are seeing with Amazon and Microsoft or Google and Walmart, it suggests big stakes are in play. In this case, these companies are betting that the digital voice assistance space is going to be a significant one to play in going forward. The number of Americans who use a voice-activated assistant device like Amazon Echo or Google Home at least once a month will more than double this year to 35.6 million, according to researcher eMarketer. The market leader will be Amazon with 71% of users while Google will have 24%. 

About 60.5 million Americans will use Siri, Cortana or another smartphone-based assistant at least once a month this year, eMarketer estimates. That usage covers 28% of all U.S. smartphone users, or about one-fifth of the nation's total population. EMarketer estimates that Amazon will maintain its market leader position even as Google Home grabs greater market share. The key for Amazon will be to provide an insurmountable mix of content and functionality that has a greater value proposition than its competitors.