CRM Watchlist 2019: The big engines that could (Part 2B, Microsoft)

So far, so good

I've gotten five of the 13 reviews done now.  Here are the links.  Interest seems to be high in them, despite their insane length.

• Adobe
• Salesforce
• Infor & SAP
• Oracle

If you have any thoughts about any of them you'd like to share, please feel free to email me at paul-greenberg3@the56group.com.  I'll respond. Even if you're mean to me.

Once again…to be clear

I am assuming -- mistakenly, I hope -- that this is the first Watchlist winner review you are reading.  If it's not your first, forgive my repetition; if it is, pay close attention, please.

You probably know that I'm an analyst and that I am vendor-agnostic when it comes to the competitive wars that the enterprise vendors (or small business vendors) fight amongst themselves. I don't care who wins. This is a big marketplace – and includes CRM, CX and customer engagement technology. Gartner recently released the 2018 numbers for what they call CRM/CX market. They peg it at $48.2 billion in 2018 and growing 15.6% that year alone (from 2017), and expect double-digit growth rates through at least 2022. These vendors inhabit the largest business software market in the world. Thank you very much. 

That said, part of my living is earned as an adviser to these companies, who are all apprised of the fact that I don't care who wins those competitive wars.  For example, at the moment, of those I've written about, Salesforce is a client, Microsoft is to be, Oracle might be, and SAP, Adobe and Infor are not.  Client or not is irrelevant to me as an analyst. If public criticism is deserved, they will get it, client or not – and my body of work attests to that. That said, this is a post about one of the 13 who won the Watchlist. So it is going to be biased to the positive --because they won. And there were good reasons they won. While not perfect, this company has had the impact to be a meaningful player in the markets that they address.  So,  please make note:  Don't tell me this is one sided as if that's a bad thing. It is one sided. It's why they won the Watchlist. But the purpose of the post is not just to highlight their wonderfulness, but to show how they are thinking and acting as a company and how that can and does impact the markets and the world – and some of the things they have to do to sustain that impact.

So let's dive in.

The Vision

Microsoft, like its five brethren before it, is complex entity to dissect when trying to understand why they won the Watchlist. To that end, some of what I am going to be discussing occurred this year, outside the purview of the Watchlist entry but within the context of how Microsoft is executing their strategy to sustain their efforts and impact over the years to come – and interestingly enough, it is entirely consistent with both their vision and their strategies – for the most part.

To actually capture Microsoft's intent and game plan, its important to understand Satya Nadella's vision for the entire company.  I outlined it in a detailed way – at least what I inferred at the time (it has proven to be right since then, ahem. Thank you very much) but to reiterate it if you don't want to read the entire post, it's this:

Microsoft wants to be the mission-critical infrastructure for all 21st-century business.

I was very careful how I crafted that sentence. Because, to understand what Microsoft has been doing since the rise of Satya Nadella in 2014 you will need to understand what that sentence means. The company is aimed squarely at no less than that objective – and are progressing with varying degrees of success.  This effort includes reorganizing the company, building strategic alliances with other vendors among them competitors. It adds the production of the needed market-aligned products and services and encompasses their huge but low-profile philanthropic efforts. Let's construct the building now that you've seen the blueprint. There is no way in anything less than another book (and I'm NOT writing it) that I could show you ALL of it, but I am covering the germane parts for this – the products/platform, the partners/ecosystem, the philanthropic efforts, 

The Products/Platform

To understand anything that Microsoft is doing, unlike many companies, you have to understand its products.  Keep in mind, that goes counter to almost everything I both generally believe and ever say about any company, but in this case, it is justified. In order to understand its products and the role they play individually in Microsoft's strategy, there is one particular one that is the single most important thing that Microsoft produces, and that is their Infrastructure as a Service (IaaS) offering – Azure (pronounced, depending on who you ask, AZ-ure or more exotically, Az-URE. I lean to the former.).  Satya Nadella said it well on the Q2 2019 earnings call (as reported in this excellent ZDNet post on the state of all the cloud providers by Larry Dignan) :

"From a mix of services, it starts always with, I would say, infrastructure. So this is the edge and the cloud, the infrastructure being used as compute. In fact, you could say the measure of a company going digital is the amount of compute they use. So that's the base. Then on top of that, of course, all this compute means it's being used with data. So the data estate, one of the largest things that happens, is people consolidate the data that they have and so that they can reason over it.  And that's where things like AI services all get used. So we definitely see that path where they're adopting the layers of Azure."

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This is not only his sincerely held belief but is the foundation of all things Microsoft from their other products Office 365 to more germane to the Watchlist, Dynamics 365 to their vision, mission and strategy.  Azure is the framework and the centerpiece.

This is not an unfounded premise.  Azure is becoming the provider of choice for enterprise scale businesses. In 2018, the JP Morgan CIO Survey, with 154 respondents, said that Microsoft Azure was their trusted IaaS choice, with 27 percent with AWS a distant second at 12 percent. Among other reasons, because it is the most secure of the cloud infrastructure services  according to most reviews.  I'm not here to debate Azure, AWS and Google Cloud. That said, if the JP Morgan Survey holds true, then Azure is generally the most trusted by businesses and its 90 percent growth from 2017 to 2018 shows that the trust is yielding results.  Microsoft is making Azure not only their central offering but their polemic.  It is at the core of how they think about the technological underpinnings and frameworks for 21st century business infrastructure. Azure is the theme of all those enabling products Microsoft provides, all those tools that Microsoft offers for developing on its platform and all the strategic partnerships that Microsoft engages in. It is Microsoft's Olympus (my own overblown metaphor) – the dwelling place of the larger than life outcomes that Microsoft claims to provide if you respond to their ministrations.  In order to help me out, on July 19, The Gartner Report for Cloud Infrastructure as a Service, Azure was named one of the three leaders sitting between AWS and Google Cloud. Thanks Gartner.

Azure may be the technological framework, but the toolkit and workbench for the realization of this vision is the Microsoft Power Platform.

This simple diagram shows a well-integrated, tight knit but actually complex platform. What makes this even more remarkable is that if you look at Microsoft's platform offering of several years ago, it wasn't really very good. At best, it was rudimentary. Less nicely, it wasn't a platform at all. Just a crude set of authoring tools with some okay to good analytics. Think Dynamics XRP. I wasn't a big fan. Other large vendor platforms – notably Salesforce's Customer Success Platform, were far better than what Microsoft had.  Additionally, for the past several years, significant vendors, were feverishly moving ahead on their own platform plays including Oracle's soon to be released CX Unity, Pegasystems' Pega Infinity (more in an upcoming post) and bpm'online's Studio (same), among others, which might have forced Microsoft's hand in bringing their best platform efforts forward with a rapidly accelerated time to market. That also might be idle speculation on my part. Doesn't matter, really, because whether or not that's the case, the Power Platform is a high-quality real deal platform on par with anyone's and in some areas e.g. Power Apps, superior to what's else is out there.

PowerApps: In the hands of the people

PowerApps is a "citizen apps builder" at its best. Citizen apps builder is a euphemism for a set of tools that allows non-technical people, more likely than not line of business folks, to build applications without the development skills normally needed to do so.

There have been similar toolsets over the years. In the earliest days – two decades ago, the misunderstood Lotus Notes was a prime example of this kind of toolbox. I remember the Notes practice lead at Coopers and Lybrand (C&L) (yes, it was THAT long ago when C&L was separate from PW – if you actually understand what I just said…you are OLD!) told me that Notes was so versatile they had a massive technology management problem at C&L. Over 2000 Notes applications developed by the line of business staff members had been deployed. Say what? 

Authoring tool kits such as those provided by PeopleSoft (People Tools) required a more sophisticated power user to create anything of value, but as time passed, these kind of tool kits became easier and easier to use and more and more valuable to have.  PowerApps , in my experience, is without a doubt the most user-friendly, elegant version of these kinds of tools. I watched CRM and CI powerhouse Brent Leary and enterprise tech guru Josh Greenbaum build simple working apps in about 25 minutes at a Microsoft Analyst Day in 2018.  The kicker? PowerApps is free with Office 365 though to get access to the whole basket of data sources (over 200 I think), you do have to pay. A limited amount of data sets come with the toolset itself.

The other two components of the platform - PowerBI, their analytics engine and Flow, their workflow and process management engine -- deserve coverage, but in the interests of space I'm not going to cover them here. Go to the links to learn more about them.

Office 365 powered by Windows…uh..10…mostly

But it's not just Azure, which provides the framework, nor just the Power Platform in Azure's nuclear core, but it's also the transformation of Office 365 from a productivity suite to a unified communications hub – a comms layer that helps their customers communicate with their customers and each other and allows the products communicate with each other. One big gabfest of a hub.

If I ask you what does Office 365 consist of, you're pretty likely to tell me Word, Excel, PowerPoint and if you're a bit more knowledgeable you'll add Access (though why that still exists is beyond me).  However let me list what else Office365 provides as part of the subscription you more than likely have.

1. Word
2. Excel
3. PowerPoint
4. Outlook
5. One Note
6. One Drive
7. SharePoint
8. Teams
9. Access (again. Why?)
10. Exchange
11. Project
12. Visio
13. PowerApps
14. Bookings
15. MileIQ
16. Invoicing
17. MyAnalytics
18. Outlook Customer Manager
19. Planner
20. Publisher
21. Skype for Business
22. Staff Hub
23. Stream
24. Sway
25. To Do
26. Whiteboard
27. Yammer

That's 27 products which are clearly not just a productivity suite, but encompasses productivity, communications, authoring, and content distribution – among other things. Couple this with Windows as the by far most prevalent desktop (and also, business)  operating system at 87.48 percent (Net Marketshare: July 2019) and there is no question of Microsoft's dominance in this space. As they increasingly focus Office 365 around becoming a unified communications hub that is embedded/interwoven with Azure and their operating system runs this hub, they are going to be increasingly difficult to dislodge by anyone attempting to capture the business market.  At some levels, though I am stating this very cautiously, they are already mission-critical to many companies, with Office 365, Windows 10 and increasingly with Azure as the backbone. One of the critical missing pieces though is their complete lack of presence in the mobile space.  If you are providing a unified communications hub, a lack of mobile presence can (and likely will) derail  you. That said, at the moment, Microsoft, led by Satya Nadella, is making Microsoft products, applications and systems interoperable with IOS and Android, rather than trying to take over the mobility market with Windows Phone.  This strategic integration strategy flows to more advanced communications such as conversational interfaces. Cortana, which is not really competitive in the CI space, is now (or soon will be) interoperable with Alexa.

• Microsoft and Samsung step up partnership

So if we can step back for a second (watch the ledge), we see an Azure backbone/infrastructure; an Office 365 communications layer, a Power Platform, well, platform and the authoring tools through Power Apps and workflow tools (don't look back, this is the first mention) in Microsoft Flow.  But it still needs the business applications that will enable the activities and foster the outcomes in the customer ecosystem. Those are where Microsoft Dynamics 365 and the partner applications come into the grand scheme.

On to Dynamics 365

Ultimately, it's the customer-facing business applications that are my personal sweet spot/wheelhouse – you pick the term.  That means what has been called over time, MSCRM, Microsoft CRM on Demand, Microsoft Dynamics CRM and Intelligent Customer Engagement (ICE – though given the current political climate, that's not the best acronym) and now of course Dynamics 365.  I am speaking about their Sales, Marketing, and Customer Service applications/solutions.  What makes this piece of the vision's implementation super interesting is that:

1. By Microsoft's standards their business applications are a small part of their business (about an estimated $2 billion plus. Can you imagine – that's small?). According to the 4th quarter 2019 (FY) results (their fiscal year ended June 30, 2019), Microsoft's total revenues for were $125,843,000,000 (roughly).
2. Yet if the vision is true and it directs their strategy, business applications' importance far outweighs its revenues. How do you become the mission critical infrastructure if you can't run the business or at least enable the running of the business? The answer? You can't. So you have to have the business applications to support that.  This gives that unit a huge strategic importance in the execution of Satya Nadella's vision for the company.
3. This led to a dramatic repositioning of the business unit. At last check, the unit itself was being run by James Phillips and Alysa Taylor. It rolled up under the Microsoft Cloud business unit run by Scott Guthrie as part of the Azure efforts.  Could this have changed? I don't see anything, nor I have heard anything to suggest it has.  This org structure (rolling up Biz Apps under the Cloud unit) supports the overarching game plan that I've mentioned three million times or thereabouts in this post.
4. What increases both the complexity and the value of the business applications is the partnership with Adobe. What it means for biz apps (as Microsoft likes to call it) is that Adobe's Experience Cloud which includes their B2C enterprise grade marketing automation solution is what Microsoft positions at the enterprise level.  With the Adobe acquisition of Marketo, its going to be interesting to see if Microsoft uses that as their B2B enterprise-grade marketing automation platform/solution or they go with their own, which at its current level of development is suited more for the mid-market.

What Microsoft is wisely doing on the customer facing business applications side is doubling down on AI and machine learning. This effort aligns them with the markets that they are attacking and at the same time, provides them with some differentiation in those markets.  One very good example that I was lucky enough to see at Microsoft's Analyst Forum in February 2019, was an AI for Sales demo from the product team which is led by the always amazing Dina Apostolou. This was a mature product that was both valuable in the insights it provided. It still managed to be easy to use too. Rather than explain it, just watch this 2018 demo of the product (which I am sure is more advanced now than then) given at Microsoft Ignite.

As you will read shortly, they aren't limiting their AI and machine learning efforts to product evolution or customer engagement initiatives – though they have ample examples of that. They are focused on much more.  In due time, you will read this. But before we get to that, another strategic component of their outlook and their execution of the vision…

The Partners/Ecosystem

One thing that has characterized Microsoft even pre-SN (Satya Nadella) was that they were ecosystem thinkers.  To be clear when I something an ecosystem, I mean a business ecosystem, as somewhat clumsily but nonetheless accurately defined by James Moore in his 1993 Harvard Business Review.  article, "Predators and Prey: A New Ecology of Competition."  Okay, that's a long time ago, but then again, so was the invention of the wheel and your car still has them – and you still drive it.

The definition:

"An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world. The economic community produces goods and services of value to customers who are themselves members of the ecosystem. The member organizations also include suppliers, lead producers, competitors and other stakeholders. Over time, they coevolve their capabilities and roles and tend to align themselves with the directions set by one or more central companies. These companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments and to find mutually supportive roles."

Microsoft's partner ecosystem has been the best reflection of its thinking and in the context of its current vision, has been mission critical to the effort.  In its very earliest days it was 54 programs (this is over 15 years ago) and it was consolidated to one program. This got out of hand and once again in 2017 it was consolidated once again to a single program.  Even in its more fragmented days, one thing that Microsoft understood was strategic partnerships. They saw all partners – strategic or not – as part of a partner ecosystem, not just a company doing adjacent business. That meant, if done right, that the partners were companies that filled gaps or extended existing domains that were meaning for customers. It could fill a market space; for example a company like ClickDimensions which has marketing automation for the mid-market and is built on the Microsoft platform. It could be missing capability; for example Episerver who has web content management, some marketing and a solid ecommerce platform (for the midmarket only though).  It could be a company fulfilling core functions better than Microsoft itself. The obvious example of that is Adobe whose Experience Cloud fulfills both B2C enterprise scale marketing and literally the ability to build consumable experiences.  As we will see below, the strategic partnerships on the one hand fill important and specific holes in the Microsoft ecosystem AND they are fit well into the fulfillment of Microsoft's all-encompassing vision.  In the current parlance, these are purpose-built partnerships. For the want of a better term, Microsoft is an ecosystem thinker.

The Partnerships

Part of the corroboration of the grand plan can be seen in the flurry of recent go-to-market partnerships that Microsoft signed.  More than 12 months ago, they and Adobe came together in what I call the GARP – the Get-A-Room-Partnership where the intimacy and joint execution between the two companies in so many areas is so close, it's almost embarrassing. The purpose, value and reasons for the resounding success of that partnership can be found in a post I wrote in 2018 called Microsoft, Adobe Get a Room Partnership, Creating a New Category?. My conclusion, BTW, was that it wasn't creating a new category, but it was a successful, intelligent and paradigmatic strategic partnership.

That has been around for a bit but in the last two months Microsoft signed three more BIG partnerships that, in conjunction with the Adobe partnership, are significant steps forward in the achievement of Microsoft's vision. A brief look at each of them.

Microsoft, AT&T 5G Partnership – This one makes total sense and possibly $2 billion for Microsoft. This one is as much a deal as it is a partnership.  Described in the Geekwire post this way:

"The two companies today announced an "extensive, multi-year alliance" that will see Microsoft become AT&T's preferred cloud provider for non-network data. As part of the deal, Microsoft will help AT&T with its 5G push by bringing processing capabilities closer to the actual devices through edge computing."

This helps Microsoft by adding the speed of 5G (with AT&T as the preferred provider) to the unified communications hub and to Azure as a comms layer.  Very, very smart…and potentially lucrative for Microsoft.

Microsoft Oracle Cloud Partnership – This is perhaps the oddest, given the competitive nature of both companies who could compete (and often do) in multiple horizontal and vertical ways. The concept is interoperability via a direct connection between the Oracle Cloud and Azure. I think it's a tacit admission by Oracle that Azure holds court in the enterprise space and Oracle is wise enough to recognize that there is an advantage for Oracle to be able to run its enterprise applications via Azure and Microsoft recognizing the depth of Oracle's penetration via its apps and its database (still) in the enterprise. Smart and though starting out in a limited way – meaning between one Oracle data center (in Ashburn VA)  and Azure's U.S. Eastern node – there is lots of room for expansion.

Microsoft ServiceNow Highly Regulated Industries Partnership – This is a gateway strategic partnership for both companies.  It has a narrowly constricted initial focus – Azure for ServiceNow in highly regulated industries such as (their words not mine) public sector – which technically is the regulator as much or more than the regulated – and for Microsoft using what appears to be the ITSM product (less clear on CSM to me) to handle employee focused workflows across Microsoft itself. However, from what I have gathered from both sides, this is only the beginning of what both hope to be a more expansive strategic partnership with much greater and wider scope over time.

Microsoft & Sony Partnership – This one, with its Memorandum of Understanding (MoU) signed in May, is interesting because it is tying the consumer side products of Sony (PS4 possibly?) to Azure.  All the others are related to enterprises.  This one, consumers. Given the Xbox and PS4 competition, this is particularly telling – and a reflection (along with several of the other strategic relationships highlighted here) of Microsoft's Azure "coopetition" efforts.  Smart thinking. Here's a paragraph from the MoU:

"Under the memorandum of understanding signed by the parties, the two companies will explore joint development of future cloud solutions in Microsoft Azure to support their respective game and content-streaming services. In addition, the two companies will explore the use of current Microsoft Azure datacenter-based solutions for Sony's game and content-streaming services. By working together, the companies aim to deliver more enhanced entertainment experiences for their worldwide customers. These efforts will also include building better development platforms for the content creator community."

Each of these has a place in the Microsoft ecosystem, but, even more germane, Microsoft is tying all of them into Azure IaaS and ultimately, all the frameworks and services Azure provides (IoT etc.) – which is a reflection of the enormous – and likely successful – bet that Microsoft is placing on Azure as the IaaS for 21st century business. 

Doin' Good, Just Fine, Thank You

The other pillar of their victory – and despite a lack of much fanfare – their company – is the extraordinary scope of their corporate social responsibility efforts.  The 2018 numbers overall speak for themselves:

• $1.4 billion in software and services donations to non-profits
• $169 million in cash from the company (2017); $158 million from employees (2018)
• $3 billion worth of business with minority, LGBTQ, women-owned, veteran, and disabled owned businesses
• $30 million cash for first responders
• 100% score on carbon footprint reduction

This is only a partial list of their enormous efforts. They are #8 in the world in the most philanthropic companies according to CareerAddict.com a site I never heard of but at least is ranking these companies from the standpoint of most total cash donations, so, presuming some accuracy on the dollar numbers, I have no reason to doubt the validity of the site.

Aside from the obvious, why would their philanthropy matter to the Watchlist victory or more importantly, to the achievement of the Microsoft overall vision? After all, if I'm right, that's a business vision not a "do-gooder" vision, right? Yes, but wrong. Aside from the genuine desire of the company's principals to just do some good with the resources and power they have, it is increasingly obvious that the customers and future customers of businesses are making their decisions about their willingness to transact and interact with these businesses based on more than just good products and services.  Again a section from my new book (to be candid, I'm not really trying to promote the book, more than I'm lazy about doing new research to justify my point. Though feel free to think I'm promoting the book if you like and buy it):

"Self-interest, when it comes to businesses and work, goes beyond just making sure that companies satisfy customers with the right products and services.

To highlight the importance of understanding what the idea of self-interest means both individually and at scale, ladies and gentlemen, I enter into the record the 2015 Cone Communications/Ebiquity Global CSR Study. For those of you not aware of what CSR means in this case, it is the abbreviation for "corporate social responsibility," not "customer service representative."  In other words, it refers to what the company is doing to support the world, or at least the community, that it resides in. The data Cone gathered shows how much deeper self-interest truly goes when it comes to engagement with customers. Here are some of the more meaningful numbers.

Companies that support social and environmental issues

• have a more positive image to consumers (93 percent)
• are more likely to be trusted by consumers (90 percent)
• engender more customer loyalty (88 percent)

than companies that don't.

This has a direct impact on the company's bottom and top lines. The study found that customers would be

• more likely to pay more for an environmentally and/or socially responsible product (71 percent).
• willing to reward a socially/environmentally responsible company by buying its products over others and/or speaking about it positively to others (31 percent)
• willing to punish a company that was clearly operating counter to environmentally/socially responsible efforts (19 percent)
• willing to buy a product from a relatively unknown company if it were shown to be operating socially/environmentally responsibly (80 percent).

In 2017, Forrester Research, in their Forrester Data Consumer Technographics, North American Omnibus Survey, found that 52 percent of all customers evaluate company values when making a purchase—up a whopping 21 percent over the prior year."

But one of the reasons that sets them apart from any other companies that are doing their philanthropic good deeds, is Microsoft's AI for Good, initiative, their effort to use artificial intelligence (consistent with their overall increasing focus on AI and ML) in service of humanity.

This is a truly innovative approach to doing good (no catcalls from the competitive peanut gallery please), and they are committing $115 million to carry it out. At the UN ITU AI for Good Summit, this past May, in an interview, Microsoft's Jean-Philippe Courtois, EVP and President, Microsoft Global Sales, Marketing & Operations, laid out the strategy and approach (note their commitment, like pretty much all larger tech companies, to the UN's 17 Sustainable Development Goals) for AI for Good:

"Our mission is to empower every person and organization on the planet to achieve more, and participating in the conversation around AI for Good is essential to realizing our shared vision. The pace of AI innovation we see today provides a unique opportunity for us to take on society's greatest challenges at scale. Equally important is the responsibility that we share across academia, civil society, industry and government to ensure we are taking a principled approach to the creation and use of AI to ensure it is used in a way that fosters trust and enables its broader adoption so the potential of AI can be realized. We recognize the United Nations' Sustainable Development Goals are addressing urgent and complex societal issues that are bigger than any one organization. That's why Microsoft is partnering across public, private and nonprofit sectors to deepen and broaden our collective impact…"

Notable – and laudable.

They are dividing the AI for Good initiative into four pillars. They are (with brief explanation):

1.  Earth – Reduced somewhat inadequately to its fundamentals, this is their sustainability initiative. It covers climate, agriculture, biodiversity and water by providing grants and APIs to monitor, model and manage sustainability in those four areas.  Example: Vulcan Earth Ranger, a software platform development project that monitors activities in protected areas via AI and sensors. This can materially reduce wildlife poaching in African protected refuges. (Grant to Earth Ranger)
2.  Accessibility – This one is easier to explain. They provide the grants to organizations for the use of AI to develop the means to amplify human capabilities for, among other things, seeing, hearing, skills training, communications and social connection. Example: AI driven app called InnerVoice to support communications skills for those on the autism spectrum and with other learning disabilities e.g the association of communications and facial expressions. (Grant to iTherapy)
3. Humanitarian Action ($40 million over 5 years) – This is their AI initiative to support refugees, children, disaster response and prevention of human rights violations.  Example: Working with the Asylum Seeker Advocacy Project (ASAP) to provide legal aid to those trying to escape persecution in their home countries.  Using speech-to-text, Azure database and prioritization algorithms to make sure that legal assistance is available when it is most needed (Grant to t Asylum Seeker Advocacy Project)
4. Cultural Heritage($10 million over 5 years) – This will harness the power of Microsoft AI to empower people and organizations to preserve and protect the heritage of people, language, places and historical artifacts. Example: Taking the entire 1.5 million piece collection of the Metropolitan Museum of Art and digitizing it so it is accessible to 3.9 billion internet connected people over the world. (Grant to Metropolitan Museum of Art). BTW, this is my favorite museum in the world. I LOVE this place.

However, even with all this – The visionary master plan, the plan's execution via their product development and strategic partnerships; their corporate reorganization, and their commitments that go beyond just providing products and services to focus more on their company's role in supporting good works on the planet – there are several things I would suggest that they do to make sure that they continue to impact the world even better than they are now.

Three Things to Consider

At the risk of being boring, once again…These three suggestions are three of many. For the purposes of space, and my desire to remain mysterious and cagy about all the things that I would suggest Microsoft (as well as all the other Watchlist winners) do, there are only three here.

Ecommerce, ecommerce, ecommerce – Let me be clear again on ecommerce. It is NOT the fourth pillar of CRM. There is also no need for it to be that. It is a substantially important piece of any customer engagement (or if you must call it this, CX, which I won't call it) platform or even solution set.  Where CRM (sales, marketing, customer service) has become the operational core of a larger customer engagement effort, ecommerce has become the transactional core of that same effort – and a source for both transactional and behavioral data on individual customers. So, while not CRM, the value is manifestly obvious.  Microsoft does not have ecommerce. They have partners who are ecommerce providers, notably Episerver, but none of their own – at least not yet. Think of it this way – SAP has hybris, Salesforce has Commerce Cloud, a pretty well stitched version of Demandware and Cloud Craze; Oracle has Commerce Cloud who's distant relative is ATG (which I believe is still offered on premise), but fundamentally retooled in the cloud, Adobe has Magento. Microsoft has….um, uh, nothing. This is the time before it gets too late to build, buy or partner but to do something.

Talkin' the Product Talk – It's fascinating (at least to me) that Microsoft actually has a rough hewn corporate narrative around their vision.  But their product stories, of uneven quality, beyond the Azure story, don't really strongly support that corporate narrative, often leaving some serious disconnects on how this all fits in. For example, in your view, readers, if you buy the visionary picture that Microsoft paints (see above) then how does business applications fit in – and how does business applications given the big picture intersect with Office 365 – and the cloud? How does consumer products like X-box play into this narrative – or do they?  That's just business apps. We have the platform, PowerApps, which is embedded in Office 365. The "new" Office 365 which is no longer just a productivity suite but a unified communications hub. That one seems apparent, but where is Microsoft's product marketing and stories around that concept – if they truly believe that. Lots of Azure activity, and a visionary corporate, rough, not totally complete corporate narrative, but no stories and focus on how the products and platform fit into the ecosystem. To add fuel to the flames, here, the conversations that Microsoft has with its public (not just customers) leans to product focused rather than outcomes focused – and in this day and age, that is not just a nice thing to do but a need to do. Outcomes, what the customer will accomplish that he/she needs to accomplish for both the company they represent and for themselves. How do Microsoft products support those outcomes?   All part of what needs a lot of tweaking but has some structure already.

Open the Pipes…Where are the hydrants?  Microsoft's relationship to LinkedIn, their $26 billion baby, remains…peculiar. On the one hand, the acquisition of all that business-related individual professional data, makes the acquisition valuable.  On the other, their continued approach to LinkedIn, keeps the value well south of the acquisition price.  To explain, when Sales Navigator, LinkedIn's dopey little SFA product was created (long prior to the acquisition), it was also used as the justification for closing off what had been an open firehose of LinkedIn data that was being used by companies across many industries to develop applications, solutions and profiles that were helping to personalize the interactions they had with customers. LinkedIn was dominant in part because it was so open with its plumbing and data. 

One would think that if Microsoft was to be consistent with its global game plan, that the firehose would be opened and the hydrants flowing again but…no.  Instead, they have actually created a very confusing model for access. They've created this product bundle called Relationship Sales which is by their own hand, "Dynamics 365 for Sales Enterprise + LinkedIn Sales Navigator" for $145.09 per user per month. Along with the $.09 as part of the price, this combination looks ridiculous. LinkedIn Sales Navigator is described as an SFA tool and it thus looks like you are buying two sales tools. No one in their right minds would buy two SFA tools to do what one could do.  What they are really buying is access to the firehose and, thus, the ability to use that data. So, here's what I suggest, making life simple for everyone, including Microsoft. Sunset Sales Navigator. It was NEVER a good product and there is nothing that will make it good for SFA.  What it has is the pipeline – so sell that as an add-on service for Microsoft Dynamics 365 for Sales Enterprise – and make access to the firehose also a standalone offering, even if you have to charge for it (though cheaper if you buy Dynamics 365 Sales). Don't make it exclusive to an otherwise useless product. With AI for Sales – a brilliantly executed product and the analytics present in PowerBI, or some other way since there are many smarter than me on this, provide what is missing in Dynamics 365 Sales to optimize LinkedIn firehose use.  Get rid of the Relationship Sales bundle. This plan aligns far better with the vision, opens the firehose back up, and can be a revenue stream for Microsoft without confusing everyone with two SFA packages in the same bundle – one excellent, the other miserable. It also makes the acquisition worth the cost – and then some. Though, to be fair, it was a good acquisition. regardless.

Microsoft is clearly more complex than most and thus I had to take it well beyond the customer-facing business applications they offer. There is no way to think about Microsoft properly without understanding their grandest vision and their willingness to spend the time, money and labor power to invest in its accomplishment. To their credit, part of what goes along with being part of mission critical infrastructure is their commitment to use Azure and also their vast financial resources to accomplish good in the world.  Thus, my friends, they were a winner of the CRM Watchlist 2019 due to:

1. Their tightly constructed and well-planned vision;
2. Their ecosystem and platform thinking;
3. The amalgamation of products/services/infrastructure aligned with the needs and interests of the market they serve;
4. The reorganization of the company around the achievement of the vision, with Azure at the epicenter
5. The strategic partnerships to fulfill the needs of their ecosystem and their business vision AND
6. Their philanthropic commitments to accomplish their efforts for social good.

Whew. A lot, a really successful effort and yet, more to do.

Okay, I hope that this worked for you. If not, please comment. If so, please comment. Send me the comments if you prefer not posting them to: paul-greenberg3@the56group.com and I will respond. Ask anyone who has sent them (though I won't tell you their names). I really will. 

Next up: Pegasystems and bpm'online

Note: If you are interested in participating in the CRM Watchlist 2020, please email me at paul-greenberg3@the56group.com and ask for registration form. Remember, you will have to qualify to participate. There are criteria. Also, if you are interested in reading my new book on customer engagement, The Commonwealth of Self-Interest: Business Success through Customer Engagement (2019), please click here.