Back in April 2016, I attended the very first Microsoft Envision Conference. While I had very mixed feelings about the conference itself, I was able to ascertain through a significant number of subtextual hints that Microsoft under Satya Nadella's leadership was taking a crucial turn. Here's how I described it then:
"If I had to encapsulate what I hear Satya Nadella say and others support at Envision it is that Microsoft is not going to be a software company per se any longer but a company that is devoted to being a critical part of the infrastructure of business via Azure and businesses via thoroughly contemporary versions of Office and various Dynamics applications - and that Dynamics would become a business solutions platform and Office a unified communications platform - all with the express purpose of providing those highly personalized outcomes that lead to major gains in productivity. Microsoft becomes (if they achieve their vision) the company that is fully interwoven, enmeshed in the 21st century business infrastructure. That would be the "in-the-nutshell" (what a quaint expression) version."
Literally all of this has not only been confirmed but as of yesterday is coming…I'd say with a vengeance but that's not in the spirit of this thing…with Microsoft on a significant roll at a gathering-no-moss speed.
On November 13, 2019, Microsoft and Salesforce announced that they had signed a deal with two technologically important provisions:
However, this is not what makes this big deal a big deal. It's Microsoft's grand strategy, which translates into their mission and vision, that makes this is a big deal for the industry despite the limited scope of the actual arrangement.
Microsoft has the foresight to recognize that in order to become a mission-critical part of all 21st century business infrastructure, they can't really just try to compete for the crown. That would be silly. We live in a world that, at the core, is governed by diversity – not just of color or gender but of choice. And that dovetails with the one mission all humans have in common – in fact, the only mission that they have in common – the desire to be happy in their individual lives. Having control over those choices on their path to that happy life is paramount. Not only are their customers looking to choose what technologies they use to make their lives at work more effective and convenient, but they want control over those choices. Microsoft, rather than taking the approach of us or nothing is saying, no matter, whatever technology you use we can underlay, overlay, or embed in or integrate with so we are good with what you've decided, mi amore. And that we can provide, via Azure – and that's the notable part of this – the infrastructural service you need to do so.
To that end, Microsoft has been on a tear for the last six plus months cementing alliances not only with Salesforce but with:
Microsoft-Oracle: Announced on June 5, 2019, this was a cloud interoperability partnership so that Azure Services could run on Oracle Cloud across both. The key paragraph from the press release was this one:
"Connecting Azure and Oracle Cloud through network and identity interoperability makes lift-and-improve migrations seamless. This partnership delivers direct, fast and highly reliable network connectivity between two clouds, while continuing to provide first-class customer service and support that enterprises have come to expect from the two companies. In addition to providing interoperability for customers running Oracle software on Oracle Cloud and Microsoft software on Azure, it enables new and innovative scenarios like running Oracle E-Business Suite or Oracle JD Edwards on Azure against an Oracle Autonomous Database running on Exadata infrastructure in the Oracle Cloud."
Defined by interoperability. At Oracle Open World, Larry Ellison in his keynote described what he literally called Oracle's "wonderful" partner Microsoft. Aside from the fact I never heard Larry Ellison use the word "wonderful" before, in the past there was no shortage of digs at Microsoft, so this represents a significant and, to me, welcome evolution in the relationship between the two companies – and with a lot of runway for the relationship to be carried considerably further.
Microsoft-ServiceNow: The original partnership between these two companies was announced in October 2018 but was limited to the federal public sector – more of a tactical alliance. It was ServiceNow IT workflows combined with Microsoft Azure to enhance "digital transformation" at federal agencies. (Digital transformation is, of course, the catchall buzzword in every press release of every vendor for everything. Most importantly, buzzwords aside, it was an important first step – and a tactical test – to a more strategic relationship announced in July 2019 to extend the idea of the workflows within an Azure infrastructure for "enterprise customers in highly regulated industries." While this is still a bit restricted, with Bill McDermott coming in as the new ServiceNow chieftain, after leaving SAP, this is likely to be taken a significant amount further, since under McDermott's tutelage, SAP and Microsoft always had a friendly, if at times competitive, relationship going back many years. So his predisposition is to ally with Microsoft, as could be seen with the Open Data Initiative (ODI) (see below) which consists of SAP, Microsoft and Adobe and was a major cooperative venture during Bill's tenure. This bodes well for the broadening of this alliance even more – especially since Microsoft is thinking "ecosystems" now. That means that they see that ServiceNow plays a role in their end to end customer ecosystem which they themselves cannot play – and thus partner's with ServiceNow accordingly.
Microsoft-SAP: This is actually one of the longest standing partnerships. The partnerships, which have had an on again off again vibe, harken back to 2005's Mendocino/Duet technology announcement and release (2006) and now extend to in-cloud migration allowing customers and others to migrate to SAP's S/4 for Hana via Azure services. This partnership, announced October 20, 2019, once again shows the common theme for all of Microsoft's strategic partnerships is Azure and the services that it provides.
Microsoft-Adobe – I call this longer standing superbly crafted partnership the GARP – The Get A Room Partnership because it is so close and so intimate that they almost shouldn't be doing those things in public. I've written extensively on this one because it is a paradigm of how strategic partnerships that are ecosystem focused should work. To get more details on this, check out what I wrote about its strengths and limitations in 2018, this Watchlist winner post this year that provides what I thought about it from Adobe's perspective (included in it but not an article about the partnership per se) and some more of the recent evolution of the partnership with Magento and Marketo playing a role in that, according to my dear bud and CRM Playaz partner Brent Leary and included in his take on the Salesforce-Microsoft announcement of a few days ago. To summarize, this is arguably not only the best executed and closest strategic relationship I've ever seen from two vendors but it should be seen as a paradigm on how to do one of these. It involves of course, running a number of Adobe's services (most recently managed services for Adobe Experience Manager) on Azure and tying a lot of Adobes application architecture to Azure. It also involves Microsoft using Adobe Digital Marketing as Microsoft's primary enterprise marketing B2C offering but in conjunction with that most recently, tying Marketo Engage to both Dynamics 365 and LinkedIn even as Microsoft continues to evolve its own marketing applications. Even at the business level, Microsoft and Adobe salespeople are compensated for the sales of specific applications of the other partner in order to encourage "bundled" apps and services from both combined. This is the best of the best of strategic partnerships and is the trigger partnership for all of the others.
Open Data Initiative (ODI) – In September 2018, Microsoft, SAP, and Adobe announced what they called the Open Data Initiative (ODI). At first it was confusing, it was announced during Dreamforce and seemed to be a dig at Salesforce, and it was unclear whether or not this was to be a new universal data standard or it was to be focused on data interoperability among the three data models of the three different companies. It may have been a dig at Salesforce, though that was denied, but the timing remains suspicious, nonetheless. But thankfully for all of us, it was not meant to be a new universal data standard but instead the architecture for interoperability for the data of the three companies. Whew. But once again, regardless of what the purpose was, this is a strategic pact Microsoft is driving with its new partners and one that fits their game plan exceptionally well.
While these are all germane to the tech industry and Azure and are interesting to people like me (and, I presume, you) we can't forget all the strategic ecosystem partnerships that Microsoft forged in 2019, so briefly, here they are:
Sony – announced in May 2019, this partnership was to explore opportunities in gaming and AI – which given the competition between Xbox One and PS5, made this a significant effort – again eschewing competition for coopetition.
AT&T – Announced in July 2019, this is a multi-year effort that follows the partnership thread around an Azure framework and services effort that involves the public cloud, 5G and many other facets. The key part of the announcement from the press release:
"As part of the agreement, AT&T will provide much of its workforce with robust cloud-based productivity and collaboration tools available with Microsoft 365, and plans to migrate non-network infrastructure applications to the Microsoft Azure cloud platform."
Humana – In October 2019, Microsoft announced a strategic partnership with Humana to reimagine health care solutions for the 21st century aging population. Embedded in the agreement was the following:
"Using the power of Microsoft's Azure cloud, Azure AI, and Microsoft 365 collaboration technologies, (bold mine) as well as interoperability standards like FHIR, Humana will develop predictive solutions and intelligent automation to improve its members' care by providing care teams with real-time access to information through a secure and trusted cloud platform."
Once again, Azure is the centerpiece of this vertically specific partnering. Even though a very different kind of company, it follows a bit along the lines of the agreement with ServiceNow. Vertically specific, but on the Azure IaaS platform.
Allianz – Just a few days, Microsoft announced that it will be working with Allianz and their insurance tech spin-off Syncier, to develop customized insurance industry solutions based on, what else?, Azure and with an Azure marketplace for insurance solution providers to show their wares (as long as they are built with Azure in mind of course).
Microsoft is executing well on its grand strategy (not the same as a strategy) – to become a mission critical part of all business infrastructure in the 21st century. Obviously, to accomplish this they need the platform, architecture, services and framework to do that – and they have that. Azure. They also have the confidence of the enterprise market in Azure they need to justify their case that this is something that will benefit the markets they are addressing. If you look at the current make up, AWS and Azure are the two most dominant IaaS platforms and while AWS remains the leader, Azure is gaining ground. But that's not all that goes into accomplishing their objective. Having the IaaS platform is a prerequisite to be sure, but you have to be able to prove that you can support the provision of outcomes that the business community from IT to line of business is looking for. The technology has to be put to use of the customer.
In Microsoft's case, to their great credit, they know that. Have they justified that with these alliances? Not yet. What they have justified with these partnerships though is:
Do I think they can pull this off? Possibly. Microsoft has deep pockets, a clear-cut objective, the willingness to throw out the norms of competition that we've seen get vicious at times in the tech world. Have they done enough? Not yet. There are many more pieces to the completion of this puzzle that go beyond just Azure containers so to speak. Office 365 plays a big role. Other alliances. Their own partner ecosystem. Their business applications (Dynamics 365) platform (PowerBI) and citizen apps builder (PowerApps) all play a role. So there is more to consider, but this current rather dramatic effort is worth watching and Microsoft, if they can minimally stay the course and optimally escalate without losing focus, is a company that will have to be reckoned with a great deal in 2020 – in a cooperative way of course.