Aiming to take on Amazon.com Inc. (AMZN) in the cashierless checkout arena, Microsoft Corp. (MSFT) is reportedly working on its own self-checkout technology.

Citing six people familiar with the matter, Reuters reported that the software giant is developing technology that would track the items placed in a shopping cart, eliminating the need for shoppers to wait in checkout lines. The Redmond, Washington company has been courting retailers around the world by demonstrating the technology and has held talks with Walmart Inc. (WMT) about a potential collaboration, noted Reuters.

The technology is being developed by Microsoft's Business AI team which consists of 10 to 15 employees. The group has explored placing cameras in shopping carts to track customers’ items and has looked at how smartphones can play a role.  Some of their efforts have already been presented to Microsoft Chief Executive Satya Nadella, noted the report. (See more: Macy's Will Let Customers Skip the Checkout Line.)

Retailer Readying for Next Amazon Disruption

Microsoft is trying to take on Amazon and help retailers ready themselves as Amazon expands its Amazon Go store, which launched in Seattle in January and is cashierless. The store, which was in development for five years, is located on the ground floor of Amazon’s new headquarters in Seattle and is stocked with technologies that remove the need for cashiers. Amazon Go customers can shop for a bevy of food items, including pre-made salads and sandwiches, snacks, beer, wine and other beverages. Consumers can also purchase a selection of produce, meat and meal kits from the e-commerce giant. Customers first need to download the Amazon Go app, scan it upon entry and then just pick up what they want to buy. They don’t have to stop at a checkout counter or open their wallet to pay. Amazon Go employs sensors, cameras and a computer vision system to scan the items being purchased and then automatically charges them to the shopper’s Amazon account. (See more: Amazon Go Just Made Jeff Bezos $2.8B Richer.)

Retail an Opportunity for Microsoft

Amazon Go locations are slated to open in Chicago and San Francisco. That, noted Reuters, has prompted rivals to prepare for yet another Amazon-led disruption in retail and provides an opportunity for Microsoft to grow its business with retailers. Noteworthy also is that Microsoft is in second place behind Amazon Web Services in providing cloud services.  

Reuters said there is no timeline as to when Microsoft will bring the technology to retailers, and it's not clear if it will move ahead with it, although some are upbeat about the prospects. Gene Munster, a veteran Wall Street analyst and head of Loup Ventures, told Reuters that the future of checkout is cashierless. He said the market opportunity for automated checkout in the U.S. alone is $50 billion.

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