Microsoft has gone through a period of considerable change in the past few years. Since the company’s founder, Bill Gates, left the company in 2008, it has begun a process of reinvention that has seen it shift from an on-premises software focussed company, to a Cloud and hardware vendor. But this is not the shift we are talking about.
The real change happening at the tech company, in recent years, is in the way it talks about itself, its products and offerings, and the context in which it frames that conversation.
The company’s recent Ignite 2015 conference on the Gold Coast was where Microsoft’s messaging really hit a tipping point as IBRS advisor, Joe Sweeney, explained.
“The message has been changing for the past two years or so, but that change has really started to come to fruit, this was the first time we saw a stick in the ground and a major transformation in the messaging,” he said.
“In the past, Microsoft would have launched by saying here are all our new products and look at what they can do for you and here are all the widgets, the market no longer thinks like that. Some techies think like that, but that is not who is buying technology now, a lot of the spend is being much more controlled by business.
“What they said [at Ignite 2015] is, here are a bunch of problems Australia is facing, here are the type of businesses we need to be embracing, here are the types of problems those businesses will solve. Here is how Microsoft is helping people solve it, here are some of the products we have that will do that and here are the new advances in those products,” he said.
“They have taken you from literally a business priority to here’s how we can help you with that solution, and that is a far more sophisticated sales strategy than Microsoft has had for about ten years."
Gartner research director, Michael Warrilow, said for several years, Microsoft has been trying to frame its position in terms of a smaller set of solutions: consumer, Cloud and mobile.
“Microsoft’s portfolio was too complicated and far too product or offering–centric,” he explained.
When asked about Microsoft’s increased emphasis on its Cloud platform and if it was a reaction to the success of competitors like AWS, Warrilow claimed he was not convinced.
“It’s not a simple play against AWS. Firstly, but perhaps increasingly less so, Microsoft has been plagued by security issues for more than a decade. They’ve been responding to that with deep investments in changing how they secure their products and services.
"Most importantly, for the Cloud era, they are taking the issues around data sovereignty and data residency all the way to the US government. They realise that the perception of the USA, in terms of surveillance and privacy, could have a material impact on their business globally," he said.
This approach to security is reflected locally as well with Microsoft gaining IRAP certification for Azure, Office 365 and more recently Dynamics CRM online.
“The company's approach to Cloud has driven not just Infrastructure-as-a-service (IaaS) adoption, but Platform-as-a-service (PaaS) and Service-as-a-service (SaaS), as well as customers increasingly viewing Azure as a true hybrid platform,” Warrilow continued.
“The shift to Cloud will have a negative near-term impact on gross margin, and this could present issues for the company. Microsoft will also have issues with Windows as a franchise, and the strategy around monetising things like Bing are still not as solid as the rest of the corporate strategy,” he concluded.
The interview with Joe Sweeney was conducted at Insight 2015 on the Gold Coast which Chris Player travelled to as a guest of Microsoft.