How Microsoft competes and lessons for partners

As we are getting closer to launching our book we are sharing some pieces just to entice readers. Chapter 3 is about the evolution on how and with whom Microsoft competes.

We discuss the early years (1975- 1998), competition in the Gates era, competition in the Ballmer era, competition in the Nadella era, with whom does Microsoft compete, how does Microsoft compete, how competing has changed under Nadella, competing at the field level, competing in the cloud world and finally competing in the AI world.

Every chapter ends with conclusions and lessons for partners. Below the conclusions and lessons for partners from chapter 3.

Conclusion.

Microsoft has moved or is seen to have moved from being seen as a monopoly, having anti-competitive practices, bundling products, Wintel, Linux is a cancer, Ballmer laughing at iPhone[1] and pushing Windows and Office to a company that integrates open source, has its most important battle as the runner up (Azure) and all of that with a newly found style thanks to Nadella. From competitive winner takes all to co-operative.

As Satya states: “Microsoft already has the largest ecosystem of partners in the world. Hundreds of thousands of companies worldwide build and sell solutions that support our products and services. In addition, millions of customers in every sector have built their businesses and organizations using Microsoft technologies. My ultimate goal is to be the biggest platform provider underneath all of this entrepreneurial energy, with an unrelenting focus on creating economic opportunity for others. In pushing this change of attitude, I’ve been helped by the simple fact that I am a fresh face, new blood. Losing the baggage of history makes it easier for me to break down old walls of mistrust. But will it be enough?”

Lessons for Partners

Satya has brought clarity in the compete model by clearly reaffirming that Microsoft is a platform company. This means a certain purity of business model. Microsoft is not going to be a retail company, nor a bank, nor a vertically specialized company competing with sector specific business solutions, nor are they going to sell your data to advertisers, nor are they going to use AI based on your aggregate data to learn how to better perform your core business like some other competitors out there might do. As a partner, this is a key advantage in positioning the Microsoft platform and your services versus other providers in specific sectors. [2]

Microsoft is going to provide the platform for others to use and build upon and the customer will pay for that platform through a usage model.

However, that platform is adding functionality all the time. If you are a horizontal IP provider try to understand if Microsoft will one day integrate similar functionality into their platforms and run you out of business.

Microsoft is a lot more open to all the different technologies out there and embraces open source. This means that as a Microsoft partner you will need to start opening up to other technologies as well. As long as it runs on Azure Microsoft will love it. [3]

Another important aspect of competition for partners is that in the future competition will come from abroad through the increased acceptance of app stores and the focus of Microsoft on repeatable IP. This at the same time also opens up a wider market for partners.

[1] https://www.youtube.com/watch?v=eywi0h_Y5_U

[2] There are multiple references of large retail companies that have banned working with AWS.

[3] One of the recurring feedbacks we got from our partner interviews and surveys is that Microsoft seems to love non-Microsoft partners like strong AWS partners even more than traditional Microsoft partners.