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Home » How Microsoft Plans to Stay #1 in Cloud: Exclusive Interview with Exec VP Scott Guthrie
Cloud

How Microsoft Plans to Stay #1 in Cloud: Exclusive Interview with Exec VP Scott Guthrie

Bob EvansBy Bob EvansJanuary 14, 20219 Mins Read
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With its enterprise-cloud business generating more than 40% of the company’s revenue and still growing at better than 30%, Microsoft customers can expect more of pretty much everything from the world’s largest and most-influential cloud vendor.

On my weekly Cloud Wars Top 10 ranking, Microsoft has held the #1 spot for more than 2 years. It’s cloud revenue is about 25% larger than that of Amazon’s AWS cloud unit—something that surprises lots of folks but is indisputably true. For more on that, please see #1 Microsoft Still Rules the Cloud: 5 Numbers Show Why.)

First-hand insights from EVP Scott Guthrie

So as we look out into 2021 to get a sense of how Microsoft intends to retain that top spot by meeting and exceeding the needs of its customers, executive vice president of Microsoft Cloud and AI Scott Guthrie offered Cloud Wars some detailed insights as part of our CEO Cloud Outlook 2021 series.

In an email exchange late last year, I asked Guthrie some high-level questions about the furious pace of change in the business world today, Microsoft’s unique ability to form deep and long-term partnerships with customers, and the evolving role of leadership in today’s turbulent times.

Emerging tech: mixed reality, industry-specific solutions

I also asked him about a handful of front-edge products generating a great deal of interest among customers: AI and ML (of course), mixed reality, and industry-specific solutions.

Across all of those topics, the themes that kept echoing back from Guthrie were these:

  • the power and impact of “digital tech intensity”;
  • the acceleration of end-to-end digitization taking place across companies in every industry;
  • unwavering commitments to customer success, centered on the need to fully understand each customer’s unique needs and desires; and
  • ongoing massive investments to meet the rapidly emerging and diverging needs of customers with a comprehensive set of cloud solutions engineered to work together seamlessly.
“Digital tech intensity” is key

“COVID-19 has made it very clear that digital tech intensity is key to business resilience,” Guthrie wrote.  “Organizations that build their own digital capability will recover faster and emerge from this crisis stronger.

“We are seeing businesses accelerate the digitization of every part of their operations – from manufacturing to sales and customer service – to reimagine how they meet customer needs: from curbside pickup and contactless shopping in retail, to telemedicine in healthcare.

“We are focused on enabling customers to respond to immediate challenges as well as help them build new apps and deploy new digital solutions that they can use to transform their business and ensure work from anywhere safely and securely.”

And in a market where the customers are growing increasingly frustrated with big, messy and expensive integration projects, Microsoft has earned its spot atop the cloud world in part by having a sprawling fleet of solutions that work together.

‘No other cloud’ can match

“No other cloud delivers the comprehensive set of capabilities that the Microsoft Cloud delivers,” wrote Guthrie.

The “tech intensity” theme is significant enough to Microsoft and Guthrie that he created a short video to share with the Cloud Wars audience, which you can watch here or listen to here, to explain why the concept and capability has become so vital to customers—and why Microsoft is uniquely qualified to deliver on that opportunity. 

A customer example offered by Guthrie offers a compelling example of that. Land O’Lakes, an agriculture and food-processing company, is standardizing on Azure not only to enhance its own digital capabilities but also to help in “revitalizing rural communities, and transforming the agriculture industry to build tighter connections between consumers and farmers through innovative cloud technologies.”

Add that to the impressive list of things on the cloud’s to-do list for 2021: revitalize communities and transform industries. But those things don’t happen in a vacuum—and in Microsoft’s case, they’re an outgrowth of the company’s willingness to transcend traditional transactional deals and create broad and deep partnerships with customers.

“Willingness to listen”

“What we offer is a willingness to really listen to the challenges and opportunities that customers have, and then find ways where together we can come up with solutions to those challenges,” Guthrie wrote.

“This active listening, and willingness to be flexible in search of a solution that works for us and for them, is critical.  It’s why we embraced hybrid early, for example, why we support multi-cloud solutions so well—because these are our customers’ needs.  We only succeed when our customers succeed.”

Another example of that type of collaborative co-innovation partnership is BMW.

“We’ve worked closely with BMW on the ‘Hey BMW’ assistant, which draws upon reams of data and our AI tools to deliver a great connected car experience with smart-mobile access to maps, weather, location-based services and more,” wrote Guthrie.

Unilever applies platform strategy with Azure to boost manufacturing quality

And consumer-products giant Unilever has shifted to a platform strategy with Azure as the architectural backbone for its digital transformation.  

Using intelligent edge services in the Azure IoT platform, Guthrie said, Unilever’s “ ‘digital twin’ algorithm helps them ensure processes in their global factories are tuned to deliver the highest quality and consistency for their consumer products.  They’re also harnessing this data to inform steps they’ll take to lower their energy consumption and carbon footprint.” 

That sense of open partnerships also extends to the tech industry, where in my opinion Microsoft has done far more than any other major cloud vendor in forming alliances—often with competitors—for the benefit of customers.

Listing every major cloud vendor as a Microsoft tech partner—SAP, Adobe, Red Hat, VMware, NetApp, Citrix, MongoDB, Snowflake, Oracle and others—Guthrie said, “We do whatever is possible to put the customer first.”

AI, ML enabling agile business 

That unwavering priority, he added, “is what continues to drive how we at Microsoft approach everything from partnerships to product innovation.”

Among the categories of product innovation to which Microsoft has devoted enormous amounts of time and resources are AI, ML and mixed reality. Guthrie wrote, “As organizations assess how to safely reopen and continue navigating unexpected shifts in the world, getting insights to respond in an agile manner is vital.” 

His description of “navigating unexpected shifts” is an elegant way of describing the tumultuous changes sweeping the globe in business, education, commerce (I was going to say “shopping”, but…), entertainment, travel, and every aspect of our lives. 

Into that breach has come the power of AI and ML in combination with the optimal delivery mechanism for those powerful tools: the cloud, which can put those capabilities in the hands of companies and organizations large and small. Guthrie offered 2 examples:

  • RXR, a major New York City real estate company, is using Azure’s new spatial analysis technology in its new app, called “RxWell,” to monitor occupants’ safety and wellness. Multiple cameras count the number of people in a room, measure the distance between individuals, and monitor wait and dwell times.
  • Philips, a leading health-technology company, is using the Azure and Fairlearn toolkit to assess key fairness metrics to uncover model inaccuracies for different patient groups.  “By improving their models’ overall fairness and mitigating biases, they were able to deliver valuable insights to their hospitals on patient well-being and care,” wrote Guthrie.

In the fast-emerging realm of mixed reality, Guthrie said there’s a clear move “from promising technology to real solutions that are having significant and quantifiable impacts today,” including “how our customers manufacture goods, how they learn and train employees, and how they do field service and remote work.”

Mixed reality booms in healthcare

In particular, healthcare is becoming a red-hot market for mixed reality, he said. And it’s hard to imagine the explosion in telemedicine that occurred in 2020 reverting to the old way of patient care and prevention.

“We are seeing a growing attraction for mixed-reality scenarios within the healthcare environment, as testing trials with the technology have opened a world of new possibilities.”

The last question Guthrie addressed was around the impact of industry-specific solutions in the cloud and Microsoft’s view of that market.

Customers “want us to provide instances of the Microsoft Cloud that are already pre-integrated and have a bunch of industry-specific solutions capability already built in,” Guthrie wrote. 

Industry-specific clouds

“We recently launched our first industry-specific cloud, Microsoft Cloud for Healthcare, that enables those in the healthcare industry to move even faster, delivering better experiences, insights and care to people worldwide.”

Guthrie then went on to frame Microsoft’s strategy for what will certainly become a deeper move into these vertically specialized markets.

“Amidst any kind of recession, independent of whether it is caused by pandemic, people are looking for that fastest return on investment.  Microsoft Cloud for Healthcare is a great example of how we can deliver that, and we can expect to deliver this for other industries in the future as well.”

And, right on cue as a followup to that forecast offered late last year by Guthrie, Microsoft yesterday introduced the Microsoft Cloud for Retail.

Final thought

At the top of this article, I noted that for Microsoft’s FY21 Q1, the enterprise cloud accounted for about 40% ($15.2 billion) of the company’s total quarterly revenue of $37.2 billion. And with that cloud business growing at 30%, bear in mind that Microsoft’s cloud business—not the whole company; just its commercial-cloud business—will soon be larger than all but the 50 biggest corporations in the world.

As we noted last month in our comprehensive analysis of Microsoft called Can Amazon, Google or Oracle Replace Microsoft as World’s #1 Cloud Vendor, all things are possible—but some are much more likely than others.

RECOMMENDED READING

Workday’s Aneel Bhusri Unplugged: Riffs on Employee Well-Being, UIs, and Rise of the Corporate Soul

Bill McDermott Exclusive Interview: ServiceNow Will Lap Legacy ‘Cement Makers’

Can Oracle Beat AWS and Snowflake in the Cloud Database Wars?

Inside Snowflake: the Phenomenal Growth Number Driving All the Hype

SAP, Google, Oracle Battle over Industry-Specific Solutions: 5 Predictions

Google Cloud Jumps to #3 on Cloud Wars Top 10; Trails only #1 Microsoft, #2 Amazon

The Top 10 Challenges for the Cloud Industry in 2021

Cloud Wars Top 10 Special Report: Which Cloud Vendors Will Thrive in 2021?

Subscribe to the Cloud Wars Newsletter for in-depth analysis of the major cloud vendors from the perspective of business customers. It’s free, it’s exclusive and it’s great!

CEO CEO Cloud Outlook Series Cloud Wars Latest Articles Microsoft
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Bob Evans

Founder, Cloud Wars
Co-Founder, Acceleration Economy

Areas of Expertise
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  • Digital Business
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Founder of Cloud Wars and Co-Founder of the Acceleration Economy, Bob leads the strategic direction of the global analyst network and actively covers the Cloud and Digital Business categories. Creator of Cloud Wars Top 10, a ranking and ongoing analysis world's most influential tech companies driving digital business and the digital economy. World-class strategic communicator focused on emerging business strategy, disruptive innovation, and forward-looking leadership.

  Contact Bob Evans ...

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