MSFT Microsoft Corporation

By Jay Greene and Laura Stevens 

Microsoft Corp. and Amazon.com Inc., fierce rivals in cloud computing, are collaborating in another emerging field: voice computing.

The companies on Wednesday announced plans to allow their voice-enabled digital assistants -- Microsoft's Cortana and Amazon's Alexa -- to work together later this year. The agreement provides each assistant with capabilities they lacked, and poses new challenges to Apple Inc. and Alphabet Inc.'s Google, which have their own voice-enabled assistants.

Amazon customers who use the company's voice-activated Echo speakers will be able to tap into Microsoft's artificial-intelligence capabilities by saying, "Alexa, open Cortana." They can check their Outlook calendar for coming appointments, for example. At the same time, customers using computers running Windows 10 will be able to say, "Hey Cortana, open Alexa," to turn on the lights in their homes or add items to shopping lists.

By joining with Microsoft, Amazon expands Alexa's reach. Morgan Stanley estimates Amazon has sold more than 11 million Echo devices through last year. Cortana is available on the 500 million computers running Windows 10, though Microsoft said in May Cortana has 141 million monthly users. Both services also run on apps available on the mobile operating systems from Apple and Google.

"This is a great move for Alexa, but also a necessary move," said Gene Munster, head of research at venture-capital firm Loup Ventures. Right now, Alexa is lacking in some aspects such as email and calendar options, which it gains through the partnership, he said.

One thing the companies won't share is data. An Amazon spokeswoman said the companies will only exchange necessary information to process requests that is consistent with both companies' privacy policies. "Once you open Cortana, all voice data goes to Microsoft and not Amazon," she said.

Alexa, which emerged in 2014 when Amazon introduced the Echo, has focused on consumer and home-automation needs. Cortana, which made its debut in 2014, works in personal computers as well as Microsoft's Xbox One game consoles. Cortana's strength is in its integration with Microsoft's productivity software, said Patrick Moorhead, an analyst with research firm Moor Insights & Strategy.

The digital-assistant market is still emerging, with no clear leader. Apple's Siri is on as many as 1 billion devices, Mr. Moorhead estimates. The company will start selling its HomePod speaker later this year, a device that likely will tie into millions of iPhones' and iPads' calendar and email information.

Google Assistant is on about 150 million devices that run the latest versions of its Android operating system, Mr. Moorhead said. The company is racing to catch up to Alexa with Google Home, a voice-activated speaker similar to Amazon's Echo.

"There are going to be multiple successful intelligent agents, each with access to different sets of data and with different specialized skill areas," Amazon Chief Executive Jeff Bezos said in a statement.

The tie-up is a signal the companies realize the future of voice assistants may be more about the content rather than how it is delivered, said Ahmed Bouzid, a former member of the Alexa team and founder and CEO of Witlingo, which builds voice products for Alexa, Google and Cortana.

"This development is moving towards that world where it really doesn't matter if you access the content through Google or Alexa or Cortana or Siri or Bixby," Mr. Bouzid said.

Write to Jay Greene at Jay.Greene@wsj.com and Laura Stevens at laura.stevens@wsj.com

(END) Dow Jones Newswires

August 30, 2017 15:33 ET (19:33 GMT)

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