Microsoft Ignite and the new Microsoft model

Nov 13, 2018

#Microsoft

It’s been a month since Microsoft Ignite and while a lot of the things that were announced weren’t earth-shattering, there was much to mull over and consider. It wasn't the new tech that was displayed that was most interesting about the conference: it was the overall direction of Microsoft as a company and what they are telling us about how they plan on meeting their customer’s needs moving forward.

The old Microsoft model

Traditionally, Microsoft has sold licenses to customers, published documentation, leveraged partners for the implementation and extension of their applications for specific customer needs, and stayed hands-off with things until it was time to renew. To be clear, this was the traditional enterprise model for most vendors. Oracle, SAP, [insert enterprise software vendor name here]; all of them used this same approach for how they sold and supported their customers.

The cloud has completely changed this model. It’s so much easier for customers to hop between vendors that something else needs to make them “sticky”. Enter Satya Nadella and “tech intensity”.

The new model and what it means

Think of tech intensity as a way of expressing the company’s mission more succinctly. It means everything Microsoft creates from here on out is done with the intention of making all of its customers tech companies. In big, bold font, Nadella is declaring "come work with us in our cloud and we’ll help you realize the dream of digital transformation”. This isn’t just lip service.

If all Nadella was offering was Azure and its service offerings, there wouldn’t be much of a differentiator between Microsoft and their competitors (I’m looking at you AWS and Google). The increased pace of hiring Customer Success Managers to help customers “buy-in” to Office 365 and other technologies shows Microsoft really is serious about getting people to use their technologies.

Aligning with your customers makes sense

This strategy aligns Microsoft’s interests with their customers. So long as you’re a Microsoft customer, and you’re reaping value from their technology stack, you’re going to stick with them. And the longer those customers stick with Microsoft, the more profitable Microsoft is.

Technologies like Logic Apps, Cognitive Services (chatbots, etc.), and emerging physical computing services (IoT) can then be sold on top of the subscriptions they already have in place (I’m looking at you, Office 365).