Microsoft recently held its Inspire conference in Las Vegas, where its many announcements could be grouped into high-level themes such as the journey to public and private cloud, AI everywhere, embracing open-source on the development side, and leveraging technology to solve global problems. For this note, I’ll highlight a few areas that are top-of-mind for partners.
Microsoft Azure – Everyone, on the Ark now!
It’s no surprise that Microsoft’s key thrust is getting reseller partners and end-user businesses to utilize their cloud platform in any way they can for myriad reasons. First, according to NPD’s B2B Distributor and Reseller Tracking service, the cloud infrastructure, and platform-as-a-service category grew at a 24 percent compound annual growth rate from 2016 to 2018. During the first half of 2019, growth reached 37 percent year-over-year making it one of the fastest-growing segments that we track.
Second, the SMB market now has access to once unreachable enterprise applications as prices come down. This is helping them to even the playing field versus larger enterprises. For example, according to our most recent SMB Quarterly Tech Monitor, services small businesses intend to buy with their technology purchases are cloud-based applications, which is the third-highest service bought behind extended warranties and service or maintenance contracts.
Lastly, I view cloud as a Trojan horse strategy for Microsoft and its partners to further entangle themselves into the end-user business similar to larger consulting firms. Resellers see an upside in using Microsoft Office 365, back-up & recovery, and more, but many fall short of truly mapping or account planning the entire business (e.g., HR, sales, legal) leaving room for rivals to encroach. Thus, it is imperative for partners to study each department and up and cross-sell Microsoft Dynamics 365 (e.g., retail, sales, customer service, etc.) in as many areas as they can to drive incremental products or even utilize the PowerApps functionality to build integrations, utilities or apps, and services coupled with a solid annuity stream. Remember, this is about true solution selling which means you need to profile what each department or job function does. For example, a customer service department will buy call center software, but may also buy accompanying thin-clients, dual monitors, wireless headsets, and keyboards. The HR department might buy more multi-function printers, enterprise content management software or eDiscovery, and SIEM-based software for compliance or investigations.
The Battle for Office Productivity – No “I” in Team
Another key segment the firm continues to enhance is in the content and collaboration software category which has grown 16 percent year-to-date. In my opinion, Microsoft recognizes its strong presence in the consumer and commercial desktop productivity tools segment and is building off those competencies by adding greater stickiness via artificial intelligence, enhancing the ease of use for its users/developers to customize (e.g., APIs), and acquiring innovative firms that strengthen their presence in cloud and mobile. Thus, Microsoft continues to push further into the unified communications and collaboration segment via Microsoft Teams as an increasing number of workers telecommute and need solutions such as presence, as well as younger generations entering the workforce who are inherently more collaborative than today’s workforce.
Key features within Microsoft Teams I believe will resonate with these groups are those that improve productivity by reducing the time it takes to accomplish a task, make the employee smarter, and improve collaboration. As an example, being able to record and generate a transcript for a team meeting, similar to a court stenographer, can save significant time. It also avoids miscommunication, as not all employees can keep up with notes or many may be reluctant to re-ask a question.
From the perspective of growing and sharing employee intellectual capital via internal or external sources, the SharePoint team site allows for archival of information to share amongst teams coupled with making it easy to plug-in APIs with third-party sources such as newsreaders or financial analysis tools to make information richer for competitor and customer profiles. Thus, coming from the competitive intelligence side and knowing that eighty percent of what you need to know is inside company walls, this type of tool can quickly help employees find someone with expertise in the subject, see if they are available, correlate that information with other sources, and share it with key stakeholders.
Based on what was shared at Inspire, Microsoft appears to be firing off on all cylinders and reaping the benefits of its robust partner ecosystem. Keys in the future will be educating partners on its vertical and departmental offerings, coupled with providing more tools in its existing products that make it easier to port workloads into Azure such as its Azure Data Box. Lastly, Microsoft must continue to weave in AI-based functionality wherever it can in its tools to save time for users and create stickiness.