How is Microsoft—the world’s most-influential enterprise-tech company—thinking about the future of business?
Where does CEO Satya Nadella see the post-COVID-19 world headed? Where are the opportunities, the traps and the possibilities?
Nadella touched on all of these subjects in this week’s fiscal Q3 earnings call as Microsoft, the #1 company on my Cloud Wars Top 10 rankings, posted quarterly enterprise-cloud revenue of $13.3 billion, up 40%.
Here are 10 of Nadella’s most-compelling insights from that call. (The full transcript is on MotleyFool.com.)
1. “A world of remote everything.”
“As COVID-19 impacts every aspect of our work and life, we have seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security, we are working alongside customers every day to help them stay open for business in a world of remote everything. There is both immediate surge demand, and systemic, structural changes across all of our solution areas that will define the way we live and work going forward.”
2. Remote meetings become the norm—permanently.
“We saw more than 200 million meeting participants in a single day this month, generating more than 4.1 billion meeting minutes. Teams now has more than 75 million daily active users… the number of organizations integrating their third-party and line of business apps with Teams has tripled in the past two months… 20 organizations with more than 100,000 employees are now using Teams, including Continental AG, Ernst & Young, Pfizer, and SAP.”
3. The surging power and significance of developers.
“From Twilio, to the U.S. Department of Veterans Affairs, to more than 10,000 engineers at Daimler, GitHub is where developers go from idea to code and code to cloud. Developers are also collaborating on mission-critical projects, from tracking the spread of COVID-19, to implementing contact tracing, to helping expand access to personal protective equipment. We are bringing GitHub to even more developers, making core features free for the first time for teams of any size.”
4. Racing to automate a remote world.
“Dynamic 365 is helping thousands of organizations accelerate digital transformation as they remote every part of the operation, from manufacturing, to supply chain management, to sales and customer service, inclusive of new scenarios like curbside pickup, contactless shopping, remote customer assistance and operations. Patagonia is using Dynamics 365 Commerce to rapidly move to new, more intelligent distribution and fulfillment models, including contactless shopping. And we are working with card issuers like American Express so merchants who use Dynamics 365 Fraud Protection can reduce fraudulent activity as they process more transactions online.
“In field service, the world’s largest commercial real estate services firm, CBRE, is using Dynamics 365 Remote Assist to help keep its life-sciences tenants’ labs fully operational from afar. And, enterprise software company C3.ai, founded by Tom Siebel, shifted its entire sales force to Dynamics 365 Sales in less than two weeks.”
5. Arming AI to battle COVID-19 and its ramifications.
“In AI, customers are applying our comprehensive portfolio of tools, services, and infrastructure to address unique challenges, including those created by COVID-19. In healthcare, we are seeing compute, data, and AI come together to help speed up response, from testing to therapeutics and vaccine development.
“Healthcare providers have created more than 1,400 bots using our Healthcare Bot service, helping more than 27 million people access critical healthcare information. The Centers for Disease Control is using the Healthcare Bot to help people self-assess for coronavirus symptoms. Adaptive Biotechnologies is using our tools to decode the immune system’s response to the virus. And ImmunityBio is using more than 24 petaflops of computing power on our cloud to help researchers build models in days, instead of months. Enterprises are using our Speech Service to manage a record influx of customer service inquiries, including Poste Italiane, which is using it to automatically respond to nearly 170,000 calls per day.”
6. With customers, play the long game.
“Overall, the perspective we take, the approach we take is really to be there for our customers at their time of most acute need. So we don’t go in there with the mindset of what does it mean for our revenue. I mean this thing that I’d always say, which is when our customers do well we’ll do well on a long-term basis. That’s at the core of our business model. That’s the core of how we approach it.”
7. The three phases of recovery.
“I think there are three phases here and there is overlap.”
- First response space. The phase we are mostly in right now is that first response space where from business continuity perspective, people want to be able to work remotely, want to be able to conduct remote operations…
- Adjusting the dial. Things will start coming back in terms of economic activity and we’ll have to keep adjusting the dial. This hybrid work is going to be there with us for a period of time. That’s where some of the sort of architectural product strength of ours will be very useful to our customers.
- No turning back. And then the third phase is where there is going to be structural change. There is no turning back, for example in telemedicine, right. If you look at even what has happened in this first phase with AI bots powering telemedicine triage. That’s going to change, I think, what healthcare outcomes look like. Same thing in education.”
8. Moving to the cloud: “Transition to the efficient frontier as quickly as possible.”
“There is no question that moving to the public cloud, even at a time like this, is just capital efficient. If you think about, for any business, the conversations we are having—and even for businesses that are having tough economic cycles—one of the smartest things that anyone can do, and we want to be very helpful in those conversations, is to transition to the efficient frontier as quickly as possible so that they can have more agility, more elasticity and better unit economics coming out of this or even while you’re in this crisis. So I think the migration to the cloud is absolutely a secular shift.”
9. In a remote world, the edge becomes essential.
“But at the same time, the architecture of the cloud itself is going to be both the cloud and the edge. So it’s not just about migrating off-premise, but it’s also about being able to have an architecture that supports the needs where edge-compute is increasingly going to be very important.”
10. The need for speed, agility, acceleration.
“It’s actually very important to have the ability in a very agile way as a business to be able to move on your business-process needs. So for example if you are a retailer and you now need to do contactless shopping, that is something that, for example, Dynamics is going to support for you to be able to use even commodity cameras with AI modules with all of it helping with our data model that supports our shopping inside of physical stores or curbside pickup or even remote assistance…
“So as long as business applications like ours with Dynamics 365 address the immediate pressing needs, these are project starts that will happen because in some sense that’s the way for economic activity to return. But at the same time I think business applications that perhaps have longer lead in terms of implementation, people are probably going to take some more time to decide on it, but whereas we think we are well positioned to capture the new scenarios.”
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