How the Microsoft cloud is transforming business

This article was originally published in the Summer 2019 issue of The Record. Subscribe for FREE here to get the next issue delivered directly to your inbox. 

A lot has changed in the last decade since Microsoft first began working on its enterprise cloud strategy. “Most enterprise organisations now agree that the cloud has become a core element of any enterprise’s technology strategy and has evolved from being an ‘if’ to a ‘when’,” explains Gavriella Schuster, Microsoft’s corporate vice president of the One Commercial Partner organisation. “Today, we are often told that migrating IT workloads to the cloud ranks among enterprises’ highest priorities. The top questions we hear are, ‘How do I start?’, ‘How should I build a plan for cloud migration of my entire portfolio?’ and ‘How will my organisation be affected by this change?’ – a stark contrast from the primary questions a few years back of ‘What is cloud?’ and ‘Why do I need it?’”

This aligns with recent Forrester Research predictions that enterprise adoption of cloud marketplaces will grow quickly from 29% to 75% in the next two years. “There is a growing realisation across global enterprises that cloud computing not only represents a set of technical opportunities for efficiencies and cost savings, but also provides the potential to significantly transform the scope of enterprise computing in general,” Schuster says. “Many, if not most enterprise organisations are finding that cloud computing offers entirely new business models, revenue streams and vehicles for customer connections. The last time we experienced such a technological shift was with the arrival of the internet itself, and today, there isn’t a successful business out there that doesn’t benefit from the internet. Today, customers and partners want to understand and to benefit from the unique capabilities and specialisations of Microsoft’s cloud offerings.” 

Enterprise organisations increasingly want to learn, try and buy cloud technologies from Microsoft and its partners in order to transform their business – and Schuster says there are several reasons for this. “Our cloud solutions are designed to serve customers of all sizes with the broadest catalogue of enterprise software solutions from both Microsoft and our extensive partner ecosystem,” she explains. “With more than 12,000 apps and services in our cloud marketplace, we work closely with partners and customers alike to provide the best solutions for innovation and digital transformation. Offers from independent software vendors, managed service providers and system integrators now sit alongside Microsoft services like Office 365, Dynamics 365, and the Azure cloud in our product catalogue, providing customers with the most extensive set of options available for transforming their business across all sectors.”

One company that has transformed its business with Microsoft’s cloud offerings is global weather forecast provider AccuWeather, which needed a better solution for handling more than four billion daily data requests. “Since using Azure, it gained on-demand scalability, improved access to real-time weather data, and cut IT costs by up to 40%, allowing it to scale to 17 billion requests per day,” Schuster says. “The company also uses analytics and artificial intelligence (AI) capabilities in the cloud through Microsoft Cortana Intelligence Suite to integrate sales data with weather information. This has helped it in business partnerships with companies. For instance, Starbucks can’t run out of ice during hot weather, so AccuWeather’s analytics help Starbucks get a better view on upcoming weather trends. So, with the capabilities of the Azure cloud, AccuWeather has discovered what many enterprise companies have discovered, or soon will: the cloud can save you money and open up new markets.”

Another example is auto insurer Geico. “Like AccuWeather, Geico discovered that by moving to a cloud model, it could easily reach all of its customers at any time and at any scale,” Schuster explains. “They also found that IT costs went down and the work of development teams sped up with a new DevOps model in conjunction with cloud development. And because Azure can run multiple copies of applications in different datacenters, things like redundancy, continuity, and recovery are a lot simpler – benefits that any enterprise can reap using Microsoft cloud offerings.”

While some businesses, mostly small and mid-sized businesses (SMBs), are still hesitant to invest in the cloud, the goal of any enterprise strategy is to create competitive differentiation and advantage, and Schuster has little doubt that using cloud capabilities has become a key element in modern strategy for enterprises of all sizes. “Cloud adoption and migration is a huge driver in transformative innovation, making it possible for enterprises to compete more effectively by implementing processes that deliver ongoing competitive advantage – and we have lots of partners helping SMBs around the world optimise their operations with cloud technology and services,” she says. “The cloud opens up all sorts of possibilities for innovation, which makes IT not only better, but provides direct benefit to the business, making the CIO not just a cost centre, but a real partner in driving value and growth for the business. So, while there may be room for businesses that don’t embrace the cloud, that space is growing smaller and proving to be more challenging for efficiency and revenue gain.” 

This will only exacerbate as Microsoft continues to expand the many facets of its value proposition, ranging from significant savings over a traditional data centre approach, to the ability to quickly build robust, resilient cloud applications that can scale-up as traffic spikes and scale-down as it recedes. 

“We want to make it easy for customers to move to the cloud. And we want it to be easy for our partners to take customers on that journey.  A perfect example is with our new collaboration with SAP. Microsoft is the first global cloud provider to join SAP’s new Embrace programme, which is a collaboration with public cloud providers and global service providers that simplifies and accelerates a customer’s transition to the cloud. It opens access to market-approved pathways, reference architectures, and select service partners, all built on Azure,” Schuster explains. “Embrace will help customers better manage refactoring and ongoing support costs, access the latest innovations, and improve the performance of SAP applications by leveraging Microsoft and SAP’s unified blueprint running S/4HANA on Microsoft Azure.”

Another unique aspect of Microsoft’s cloud proposition is its cloud solutions provider (CSP) licensing model that is available to its partner network. “Under the programme, partners sell Office 365, Azure, and other software as a service products as part of their own service bundles, giving them better control over margins and the ability to put their own vertical or specialised service wrappers around Microsoft offerings,” Schuster explains. “In short, our partners get to use CSP to provide Azure and Office 365 to customers on a subscription basis. Through CSP, partners are embedding Microsoft technologies into their own solutions, and are delivering more differentiated long-term value for their customers.”

With the growth of adoption – as well as expanding services and applications of cloud coupled with the rise of AI and machine learning – Schuster sees the future of cloud services skyrocketing. “Given cloud’s growth, we anticipate the continuing advancement of cloud security solutions for the strongest cloud protection possible,” she says. “Microsoft partners that provide value-added services will see strong margins when they focus on specialised business applications deployment and projects that require planning, implementation, integration, security, and compliance.”

The global market for cloud migration services is forecast to grow to US$9.4 billion by 2022, which aligns with the growth that Microsoft has seen in Azure consumption, which has expanded to 54 regions announced globally – more than any other cloud provider. “We are also seeing an average of 120,000 new Azure customer subscriptions per month,” Schuster concludes. “Given this growth, we expect cloud adoption, migration and transformation to continually increase and be fully global in the years to come.”