Microsoft’s Flywheel Kicks into Gear at Ignite 2020

Event showcases advances on several fronts

Microsoft has been one of the major forces helping enterprises transform throughout the pandemic, and Ignite showed how the trend is benefitting the enormous flywheel of the company’s products.

Among an eye-watering number of announcements, the event’s core theme this year focussed on business resiliency. Reflecting an important customer priority at the moment, it also highlights the investment Microsoft is making in driving integrations across its cloud businesses.

The strengthening of the connective tissue between Microsoft’s array of products — Teams, Azure, developer tools, artificial intelligence (AI) and security to name a few — was arguably the biggest message at the event. But it is also one of Microsoft’s biggest assets in the cloud wars. Let’s explore some of the highlights and discuss what they mean for Microsoft and the cloud market.

Teams Turns Focus to Employee Well-Being

Unsurprisingly, many of Ignite’s headlines were about reimagining teamwork, with a large focus on the meetings capabilities in Teams. Microsoft revealed a host of improvements, including new scenes for Together Mode, custom layouts, breakout rooms and meeting recap features.

But by far the most notable update was the emergence of a new area: well-being technology in Teams. Microsoft unveiled a new virtual commute feature, which schedules time at the start and end of the day for managing task progress and reflection. The company also announced an integration with the Headspace meditation app, along with a host of insights for employees and managers through the integration of Workplace Analytics.

Concerns are mounting about the mental health and well-being of remote workers, and business leaders are now starting to take the area very seriously, especially as work-from-home strategies become permanent and the risk of burn-out becomes real.

At CCS Insight we have predicted for some time that many collaboration and HR applications will start including features that track and promote well-being, and Microsoft deserves credit for being the first major technology player to take significant steps into this area.

Microsoft also shared some of its research, which found that a third of remote workers now claim their well-being has been harmed since the pandemic, with average workdays increasing 25% in the US.

Questions remain about whether these early features will be effective. But they’re a clear indicator of a wave of innovation in the well-being area coming in the next few years, and Microsoft is taking a proactive role. Above all, the new additions show that Teams is moving beyond being just a video and chat application to become a trusted hub for digital work.

Azure: Hybrid Cloud and AI Advance

Another important part of Microsoft’s flywheel is Azure, which continues to expand. Among the major announcements in CEO Satya Nadella’s keynote presentation was the launch of Azure Orbital, a “ground station as a service” that enables customers to communicate with and control their satellites or spacecraft on a pay-as-you-go basis. The move follows Amazon Web Services’ entry into this arena several years ago. Microsoft showcased an early customer, the US National Oceanic and Atmospheric Administration, which will use Azure Orbital to manage its weather satellites.

Two other areas of progress to note are in hybrid cloud and AI.

Launched at Ignite 2019, Azure Arc has become core to Microsoft’s growing hybrid multicloud strategy. At this year’s Ignite event, Microsoft announced the availability of Azure Arc-enabled servers for Windows and Linux, and also introduced support for Azure Kubernetes Services on premises through Azure Stack HCI. It announced the public preview of Azure Arc-enabled data services, which allow customers to run Azure SQL Managed Instance and Azure Database for PostgreSQL Hyperscale in any environment.

Microsoft is right to step up its efforts on in the hybrid cloud space. Over 40% of large firms will maintain at least 40% of their IT workloads on premises over the next few years, according to our research, and Microsoft’s heritage in this area arguably extends back to 2016 when it was first to market with Azure Stack.

A crucial component in this picture is extending Arc’s control pane to other clouds, an area that will need more focus from Microsoft. Although the announcements have added some critical pieces, we expect to see more services highlighted that extend to Amazon Web Services and Google Cloud Platform environments in the future. In our survey of senior leaders’ IT investment intentions, 46% of respondents were adopting a multicloud approach as a formal part of their cloud computing strategy. Microsoft will need to extend its Arc umbrella across other data services as well, such as analytics, machine learning and 5G edge computing.

Microsoft’s AI Digs into Business Solutions

Another important field of investment over the past few years has been in AI. At Ignite, Microsoft’s strategy got a boost in two important areas: Azure ML and Cognitive Services.

In Azure ML, a new drag-and-drop Designer tool and a no-code automated machine learning capability (formerly called AutoML) were released. Microsoft is seeing a transition from customers deploying tens of models to thousands of models as the market matures. We too are seeing this trend. According to our C-suite IT investment survey, 44% of firms are now in production with machine learning-based applications, up from just over 20% in 2019. The emphasis on helping data scientists build low-code models is particularly timely, as models using time-series data such as for forecasting have become popular as a result of the health crisis.

Microsoft also released Metrics Advisor, a new Azure Cognitive Service that monitors metrics and diagnoses issues to give customers insights into their business operations, and a new spatial analysis capability for its Computer Vision Cognitive Service. This aggregates information from multiple cameras to assess how many people are in a room and how close together they are to help with social distancing measures, for example.

The moves exemplify a shift in Microsoft’s strategy toward helping firms build up AI projects and deploy more-intelligent business solutions through a clustering of general-purpose AI models and API services, including image classification, speech, sentiment and language to enable specific business outcomes. We expect a deepening focus on business solutions and in particular, spatial-based services in media and retail environments, building on the innovation showcased in Microsoft’s Flight Simulator application, which kicked off Ignite.

A final noteworthy area in Microsoft’s AI business has been responsible AI, an area where Microsoft has tried to set itself apart from rivals following several important announcements at Build 2020. It released Project Trove, a new application that connects individuals with AI developers in a marketplace for the responsible, commercial exchange of data for AI. Available in open source, the initiative is a good step toward helping developers build trust in the technology.

Security, Management and Trust

Indeed, trust overall has become a crucial theme during the health crisis as businesses have become more dependent on technology, particularly cloud computing. In my view, Microsoft has excelled at the intersection of innovation and trust in recent years and the integration of Microsoft’s capabilities has been crucial to its position in the market.

The most prominent area in this regard was in device and application management and in several enhancements to Microsoft Endpoint Manager in particular. They included Microsoft Tunnel, a new capability which provides remote access to on-premises applications and resources, support for virtual end-points including Windows Virtual Desktop, the inclusion of Endpoint Manager controls in Microsoft Edge browser, and support for shared business iPads.

Mr Nadella and corporate vice president Brad Anderson both highlighted the resurgence over the past six months of the PC, as the tool became mission-critical during the pandemic. The advances and integrations in device and application management will be welcomed by the many customers who, according to our data, say the deployment of employee devices is the biggest challenge with supporting remote workers.

The moves in this area, along with several other important advances in security and identity, may not always drive headlines, but we view them as some of the main reasons why Azure adoption has surged during the pandemic. A picture is emerging of Azure as the “trusted cloud” for business and IT leaders, and this is reflected in Microsoft’s current strategy.

The Final Take

Above all, Ignite showcased how the connective tissue between Microsoft’s array of cloud products is rapidly strengthening. Although more work needs to be done with LinkedIn and in expanding Azure’s industry-specific capabilities beyond healthcare for example, it is this continuing effort to integrate its portfolio that is perhaps one of Microsoft’s biggest assets in the cloud computing race.

The effort also helps to address one of Microsoft’s biggest challenges: fuelling adoption of its at times overwhelming technology stack. Mr Nadella’s “tech intensity” concept continues to play a crucial part in addressing this challenge, along with its investment in customer success.

Microsoft is also organizationally shifting toward a greater focus on more business-orientated solutions (rather than product-orientated ones) and in industry-specific challenges, which gives new urgency to this integration effort.

With a new economic reality now facing swathes of companies, this strategy will become vital as Microsoft navigates weaknesses in IT spending and helps customers recover and grow in 2021.