It’s summertime, Microsoft has just entered a new fiscal year, and the Worldwide Partner Conference (WPC) is in full swing in Toronto. I resisted the temptation to join the heaving multitudes at WPC and instead listened to the live steam of the Tuesday keynote to hear what Microsoft executives were saying about Azure and Office 365.
Microsoft keynotes are always well-staged events that are rehearsed to an inch of the participants’ lives. The Monday keynote by Satya Nadella lived up to the broad sweeping statements that you’d expect from the CEO, leaving Tuesday’s keynote to fill in some of the gaps.
Scott Guthrie started the ball rolling by commenting on the success of Azure, which is now running in 34 regions worldwide. He noted that a single Azure region accommodates 700,000 servers, which gives an indication of just how much workload now runs in the cloud. Guthrie cited Azure’s leadership over Google and Amazon in areas such as the number of certifications attained, data sovereignty in Germany, service within China, and hybrid capability.
To whet the appetites of the partners to sell more cloud solutions, Guthrie said that more than 85% of Fortune 500 use the Microsoft Cloud and that $45 billion of partner revenues are now attached to Microsoft Cloud. Guthrie also noted the 65% gross margin for partner SaaS solutions based on the Microsoft Cloud. Keynotes at major vendor conferences always accentuate the positive. Even so, the progress Azure has made recently is pretty impressive.
Kirk Koenigsbauer, corporate VP for Office, followed Guthrie to give an update on what’s happening inside Office 365. He began by saying that 87% of senior managers admit to uploading work files to a personal account. Obviously these folks don’t use Office 365. Or maybe they do. In any case, he then spoke about the focus areas for Office 365 development, which are Collaboration, Mobility, Intelligence, and Trust. The first two could be easily guessed by anyone who has followed Office 365 over the past few years, while Intelligence reflects the growing influence of machine learning across Office 365 services. Trust represents the huge effort Microsoft has expended to ensure that customers believe their data are safe in the cloud.
Koenigsbauer said that Exchange Online was the catalyst for the growth in Office 365 numbers to more than 70 million active users. That number hasn’t grown since Microsoft first started to use it at their Q3 FY16 results briefing. The new information was the cited 57% growth YoY in Office 365 licenses and the assertion by Gartner that Exchange Online now has 80% of the business cloud email market.
Koenigsbauer highlighted the new SharePoint app and asserted that the OneDrive for Business sync client is now “rock solid”. Of course, it is unless you want to use it to synchronize SharePoint Online document libraries (including those used by Office 365 Groups), as the new sync client ignores these sites. The old (Groove.exe) sync client has to be used instead until Microsoft updates the new sync client to support SharePoint, an event expected towards the end of 2016. Confused? Well, you’re not alone. Anyone who has looked at the OneDrive sync client situation is scarred by the experience. In fact, because the old OneDrive sync client is so bad, I have heard of people resorting to using their personal Dropbox account to store offline copies – which might account for some of those 87% of senior managers referred to above.
Tim Campos, the CIO of Facebook, came on stage to endorse Office 365 and explain why Facebook has decided to use the suite (Microsoft subsequently published a blog authored by Campos). He said that collaboration technology is critical for Facebook and cited the level of confidence Facebook had in Microsoft as a partner and the security of the information held in Office 365.
Campos referred to the artificial intelligence built into tools such as Delve, Clutter, and the Microsoft Graph as real advantages delivered in Office 365 by Microsoft, a company that “has got its mojo back”. An interesting difference between what Campos said in person and what appeared in the blog was the replacement of the mention of Clutter by a reference to Focused Inbox, echoing statements by Outlook chief Javier Soltero that the Focused Inbox will soon be available for all (current) Outlook clients. The Focused Inbox is slated to replace Clutter inside Office 365, but clearly Facebook is still using Clutter!
Facebook has long used on-premises Exchange servers for their email, so it would be reasonable to expect them to transition to Office 365. However, the depth of the endorsement delivered by Facebook was both unexpected and impressive, especially as they have a product (Facebook @Work) that seems to compete with Office 365.
In technical terms, a case can be made that the most interesting recent Office 365 announcement, which wasn’t made at WPC (probably because of time pressure) was the preview of automatic transcription and translation in Skype Meeting Broadcast. The new functionality will allow automatic on-demand closed captioning and translation of presentations and is sure to be of interest to multi-national companies who host regular “all hands” broadcasts. Features like this help Microsoft to convince customers to jettison their traditional PBXs and move to Skype for Business. The technology is scheduled to be available by the end of 2016.
Compelling as the news from WPC might appear, I still think that the real action for both Microsoft and ISVs will happen at the Ignite conference in Atlanta in September. I expect real product announcements and news about how things really work then, which is why I prefer to attend Ignite rather than WPC.
Follow Tony on Twitter @12Knocksinna.
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