This week, I’m at Microsoft Ignite in Orlando, Florida, along with tens of thousands of folks, many from the West Coast who are likely again surprised at how early 9 a.m. is on the East Coast. Before the keynote, we were treated to a session with Walmart and how that huge operation is working with Microsoft and Azure to better compete with Amazon and its AWS offering. I found this interesting because, in a way, that is a competition between models. Walmart and Microsoft is the more traditional vendor/customer solution while Amazon/AWS is effectively one company. Given that there is often competition for resources when a solution is internalized like it is at Amazon, while the customer/vendor relationship is more formally defined it will be interesting to see, in a few years, which turns out to the more efficient. But what is also clear is that Walmart would likely avoid AWS because it is from a competitor and be attracted to Microsoft instead. As Amazon grows, I wonder how much business AWS will lose simply because other large firms don’t want to fund their competition?
This keynote comes at an interesting time for Microsoft. On the one hand, the company appears to have recovered from the last decade, when it seemed to lose its way, and it is doing extremely well again. On the other hand, Jeff Bezos, Amazon’s CEO, just shot past Bill Gates as the richest guy in the world suggesting that, as well as Microsoft is doing, Amazon is doing better. Though, I often wonder, when you are at the peak like Amazon is, whether folks inside the company tend to get arrogant, feel they can do no wrong, begin to abuse customers, and drop into the cross hairs of government regulation. It may be far less disruptive to be where Microsoft now is, and a powerful competitor can keep a company grounded and focused. These are interesting times. Part of what showcases this is that the warm-up for CEO Satya Nadella’s talk was mostly about diversity and inclusion. We live in fascinating times.
Ignite and Envision the Future
Nadella opens talking about the power of computing and how technology is being used to better map solutions to the people who will use them. He argues that every business is a digital technology company because that is what is helping firms focus on what makes them unique. He argues that one of the strongest skills in this new age is picking the right partner to assure a successful future. A partner that not only knows the technology but knows the customer well enough to apply that technology for the greatest positive effect.
He went back into the past and talked about the transition in manufacturing from steam to electricity and how Ford embraced and drove the change and survived and flourished. Many competing car companies failed or were forced to be acquired because they didn’t pivot to this then-new technology quickly enough. Nadella is positioning the cloud as equivalent to electricity, providing similar economies of scale, in this case with information, that could define the next wave of massive winners and losers. (I should interject that in a world where boards don’t seem to be doing their job, in selecting Nadella, Microsoft’s board clearly stepped up, as he appears to be the optimal CEO for Microsoft.)
Nadella moved to talk about Royal Dutch Shell and how it is using cameras, computer vision, and Narrow AI to improve quality and safety and optimize production. Then to CBRE, a huge real estate firm that is undergoing massive changes to evolve its business in a service called CBRE 360. It built the service on top of Azure Twin Service. This CBRE service creates a simulation that models the interaction of people and things to optimize the business. Next, he moved to Buhler, a firm that manages food distribution and logistics. It is using computer vision and an industrial-grade blockchain to assure food quality and safety. Jumping again to BMW, a firm that wants to maintain control over the experience it provides its customers. It is building its own digital agent to connect the driver more intimately to the car. Next, H&M, a huge retailer, is using a digital mirror that sees the person standing in front of it, and then connects users to fashion items they may relate to by showing them in concert with the reflected image. Eli Lilly is the next firm showcased, and its need to get its arms around health care costs. The company realized that much of the cost is in the inefficiencies in workloads and it moved to Office 365 aggressively to refine and optimize those workloads and reduce those inefficiencies.
Back to cars, Nadella then began talking about ZF (it makes the transmission on several of my cars), which uses HoloLens to better connect line workers with remote support so that they can more effectively blend assembly and assistance without disruption.
Nadella argues that the most important problem firms are dealing with is how they can improve the quality of customer engagement. The CEOs for SAP and Adobe were brought on stage and apparently these three CEOs have been attending each other’s shows on this theme for some time. Nadella has created a taxonomy of silos that currently contain customer data. These three firms are coming together to create the “Open Data Initiative” to open up the promise and benefit of real-time customer data for all companies. At the heart of this initiative is the friendship and trust these CEOs attest to have with each other. This is an interesting and powerful comment because, often, firms get up on stage at shows like this and the entire depth of their relationship is the on-stage event; there is little substance under the presentation. This is different; these guys really like each other and appear to want to work together, which is critical to successful sustaining partnership. It strikes me that we, and I mean those of us who are industry watchers, should focus more on trust and collaboration than we do.
This “Open Data Initiative” is designed to give companies better control and benefit from the data they already collect. While they aren’t calling out Google, the sense is that this is a strong counterpoint to the Google model, where the data is mined for that firm’s own benefit, often to the detriment of customers and partner businesses.
The CEOs spoke about the future of businesses and how they are struggling to better connect their solutions, and customer experiences, to their firms and brands and how this initiative is designed to better address this problem. Basically, this effort is designed to unlock the data that already exists, treat it like a renewable resource, and apply it in real time to improve the customer experience and create better sustained customer loyalty and satisfaction.
Security and Trust
Nadella then moves to one of the most important topics in the technology industry today, security and trust. Key to this are three key areas: operations, technology and partnerships. One of the critical partnerships is with government. One of his first examples is Account Guard, and this targeted the lack of security around government email accounts. This came out of a series of successful phishing attacks on political parties and institutes. Microsoft worked with the legal system to create a special master so that once an attempted attack was detected, the response could be almost instant, so the user was protected.
He used the example of 58 businesses that were attacked using email distributed malware to steal banking information. Apparently, Windows Defender was able to use deep learning to quickly identify and mitigate the attack before it could do significant damage, largely because it operated at digital speeds.
The Internet of Things (IoT) represents one of the biggest security exposures we will face this decade. There are currently around nine billion microcomputers that are operating under an IoT umbrella. Azure Sphere was created to assure that this massive new potential exposure could be protected, so this wave of IoT devices doesn’t become the next global disaster. E.ON was used as the example because it has significant exposure due to the nature of its power distribution business, and it is protected by Azure Sphere.
Coca-Cola was yet another example of a Microsoft customer that wanted and received a unique multi-factor authentication using Microsoft Authenticator to assure its employees and bottlers are protected and its product is better assured safe.
In an interesting ending, Nadella asked that we all work together to assure this next wave of technology assures equity and equality across the world. Microsoft has created an initiative, “Technology For Good,” focused on doing good worldwide. Its latest effort, “AI For Humanitarian Action,” is targeting the use of technology to promote human rights, better disaster response, more efficient humanitarian food distribution, more effective medical care to distressed areas, and overall focus on making the world a far better place to live.
This is yet another example of a company doing well that is also focused on doing good.
Wrapping Up: Microsoft Doing Well and Doing Good
This is what a keynote should be: a balance between vision and products, a heavy focus on customers and applied solutions, and a solid and heartfelt effort to help improve the world we all live in. Nadella hit all the notes with this one and continues to effectively set the bar regarding how these things are done. What struck me the hardest was the ending, showcasing the firm’s heart, and the only thing I missed was Microsoft’s traditional sense of humor and making fun of itself. Then again, if I had to choose between that and a focus on making the world a better place, I think I, and you, would prefer the latter. Impressive work.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+