Microsoft and Shell have enjoyed a long and productive relationship, built on deep connections that stretch back decades. Shell was one of the first global businesses to adopt the Windows operating system across its entire enterprise. More recently, Shell has been a pioneer in digital transformation, embracing technologies that improve efficiency and safety, and accelerate development of cleaner energy sources. This includes major deployments of Azure, Microsoft 365 and the Power platform.

That relationship is growing even deeper to help meet the difficult and complex challenges of energy transition. Under a newly announced strategic alliance, the two companies aim to jointly develop technologies that will help them accelerate achieving their carbon reduction ambitions, while helping customers and other organizations reduce their own emissions. Microsoft will help build new artificial intelligence (AI) solutions that accelerate Shell’s digital transformation and Shell will supply products and services that help Microsoft in its drive to net zero carbon emissions.

“These complex challenges can’t be solved in isolation, or by doing business as usual,” says Judson Althoff, executive vice president of Microsoft’s Worldwide Commercial Business. “We are proud to play our role in a sustainable future, and we know that a successful energy transition depends on strong technology partnerships anchored in co-innovation and development with leaders in the energy sector.”

Advancing Shell’s digital transformation

Under the alliance, the two companies will continue advancing Shell’s digital transformation, building on an extensive technology portfolio. With technology flowing both ways, the companies can learn from each other and implement solutions together, which will also create new opportunities for their customers and suppliers to reduce their carbon footprints.

The alliance is expected help Shell suppliers decarbonize. Shell is already using Azure to develop a digital tool to track supplier emissions, show baselines, set targets and develop plans for its own operations to achieve these targets. Going forward, Shell and Microsoft aim to develop additional digital tools to help Shell’s suppliers reduce their carbon footprints.

Shell and Microsoft will also work together to provide tools and solutions that help customers manage their carbon footprint. They will collaborate on a digital platform to help small to medium sized companies calculate their carbon footprints, while exploring new ways for customers to find and access low-carbon solutions and products.

“Together we already develop, test and deliver technologies that push the boundaries of what can be achieved,” says Huibert Vigeveno, downstream director at Shell. “We are proud of our relationship. And today we are going further.”

Where digital transformation and energy transformation meet

As Shell supplies energy and products to Microsoft, the alliance will begin to merge digital transformation into energy transformation. Shell is innovating in large-scale renewable energy and advanced technologies that drive efficiency into industrial processes.

Microsoft’s plan is to become carbon negative by reducing its emissions and then removing more carbon from the earth’s atmosphere than it emits. Similarly, Shell’s ambition is to be a net-zero emissions energy business by 2050 or sooner in step with society and customers. Shell recognizes that becoming a net-zero emissions energy business is a huge task. The business plans Shell has today will not get it there, so its plans must change over time, as society and its customers also change.

Microsoft and Shell are not alone in these efforts. Under this new alliance, the two companies aim to offer practical solutions to those seeking to lower their carbon emissions. Shell and Microsoft also are exploring opportunities to advance the use of sustainable aviation fuels.

“We are seeing a cultural shift, not just internally, but everywhere. We have to change the way we do business,” says Dan Jeavons, Shell’s general manager of data science. “Microsoft and Shell each have customers across many industries and their needs are changing. Together, we are working to understand those needs and to find ways to address them. That will unlock tremendous value for Shell, Microsoft, our customers and beyond.”

Data helps drive decarbonization

Digital technology will play a key role in the energy transition, which is where the expertise of Shell and Microsoft align. Shell processes billions of data points each week from its global asset base. The company uses Microsoft’s Azure cloud platform alongside digital twin technologies from Kongsberg and AI platform technology from to quickly aggregate and analyze that data to generate a virtual picture of what’s happening across its businesses.

Shell has built a data and analytics platform called which provides machine learning and software engineering capabilities to scale AI solutions across the company. That helps Shell to automate processes like robotic inspection of facilities that can improve maintenance, safety and efficiency. Shell and Microsoft are working together to build out those technologies and share them with customers and suppliers. Both Shell and Microsoft are working to accelerate innovation across the energy industry through the development of open data standards. This is demonstrated through membership in OSDU and Open Footprint Forum.

“The cloud creates a common fabric, but it only works if you have a common data exchange. That makes it much easier to innovate on top of that,” Jeavons says.