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MJF Chat: Microsoft's Industry/Vertical Clouds: What's New

Mary Jo Foley

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In my role as Petri’s Community Magnate, I will be interviewing a variety of IT-savvy technology folks. Some of these will be Petri contributors; some will be tech-company employees; some will be IT pros. We will be tackling various subject areas in the form of 30-minute audio interviews. I will be asking the questions, the bulk of which we’re hoping will come from you, our Petri.com community of readers.

Readers can submit questions via Twitter, Instagram, Facebook and/or LinkedIn using the #AskMJF hashtag. Once the interviews are completed, we will post the audio and associated transcript in the forums for readers to digest at their leisure.

 

Our latest MJFChat is focused on what’s new in Microsoft’s industry/vertical clouds. My special guest is Corey Sanders, Microsoft Corporate Vice President of Microsoft Cloud for Industry and Global Expansion Team.

 

If you know someone you’d like to see interviewed on the MJFChat show, including yourself, just Tweet to me or drop me a line. (Let me know why you think this person would be an awesome guest and what topics you’d like to see covered.) We’ll take things from there…

 

Transcript:

 

Mary Jo Foley (00:02):

Hi, you’re listening to Petri.com MJF Chat Show. I am Mary Jo Foley, AKA your Petri.com Community Magnate. And I am here to interview tech industry experts about various topics that you, our readers and listeners, want to know about. Today’s chat is focused on Microsoft’s vertical clouds for various industries like retail, healthcare, financial services, and the like, and my special guest for this chat is Microsoft Corporate Vice President of Microsoft Cloud for Industry and Global Expansion Team, Corey Sanders. Wow. That’s a title Corey. <Laugh>. Thanks for doing this chat today. <Laugh>

Corey Sanders (00:42):
I was worried you weren’t gonna make it through the title. So I appreciate that, but thank you for having me, Mary Jo. I’m very excited to be here.

Mary Jo Foley (00:49):
Yeah, me too. I’m really interested in this topic. And, I feel like I need a level set on it, so I thought maybe it would be good to just start out with a really basic question. What is a cloud for industry? And when I first heard Microsoft talk about this, I’m like, oh, is this just like a bundle of various cloud services from Microsoft that’s targeted at various vertical industries? It kind of almost reminded me, because I’m so old, I remember this of the better together strategy Microsoft had, which was like, let’s make our products work better together than anything else integrated from other companies. So I’m just kind of curious, like what is cloud for industry and why did Microsoft decide to bundle things together in this form?

Corey Sanders (01:34):
Yeah. So I don’t know about the better, and actually maybe I’m exposing myself a little bit as well, I don’t know as much about the better together promotion <laugh>. But what I will say is that, you know, it’s a combination of a few things. You know, certainly we have a, an exciting set of, of sort of what I call horizontal platform, right? Our sort of Microsoft Azure, M365, Dynamics 365, LinkedIn Power Platform, etc. And, you know, we find customers using these, of course, for all types of scenarios that they’re building on top of. But one of the things that we’ve really sort of learned over the last few years is the desire, the need to be able to bring some or all of these together with additionally, with other partner solutions as well and create end end industry-focused solutions.

Corey Sanders (02:24):
So how do we enable sort of customers to put these components together with market-leading partners to be able to get that value out in a much quicker, easier, faster way? And so this runs a lot of different solution types, whether it be sort of AI specific models, to industry data models that are specifically focused to industry, to really sort of bring out the data services combined with some of the other platform services and then integration across them, whether it be sort of dynamics with teams or partners and teams and so on. How do we enable basically end-to-end solutions that are industry-focused and sort of solving real industry problems? And that’s really sort of the ultimate goal. It is really all about thinking through for each one of these industries. They have very unique problems that they’re solving for. And how do we make sure that we can direct engineering resources, partnerships and and even sort of direct some of our horizontal platforms and roadmaps to better enable and create more seamless and sort of customized experiences for those industries.

Mary Jo Foley (03:34):
Okay. Almost like Blueprint.

Corey Sanders (03:35):
Did I help better explain it? Is it now you tell me, is it like better together? It sounds better than better together to me.

Mary Jo Foley (03:44):
<Laugh> It’s best together. How’s that?

Corey Sanders (03:47):
It’s best together. There we go.

Mary Jo Foley (03:49):
It almost sounds like blueprints, right? Like that’s another thing, an old Microsoft term, like you guys used to do these blueprints for customers where you had some things that were common across different industries, like a set of solutions, and then people would tailor those basic blueprints to their specific company.

Corey Sanders (04:06):
Yeah. And I think there’s elements that are like that templates blueprints, et cetera. The one key point though, is that these are fully supported and fully engineered capabilities. You know, one of the things that I’m always anxious about the term blueprint candidly is it’s sort of like a throw it out there and good luck using it. And these are actually, you know, not only tailored services, but actually fully supported by an engineering team that’s sort of dedicated and understands the needs of those industries. So I have a team for each one of these industries and they build support have live sight, all of the sort of goodies you’d expect from just a complete horizontal cloud service, we offer on these vertical capabilities, too. So there are elements of it that are template-type capabilities. But it is also full sort of services and integration points that are fully supported.

Mary Jo Foley (05:00):
Okay, good. So I’ve been following along as you guys have been rolling these out. So far, I think we’ve got cloud for healthcare, cloud for retail, cloud for financial services, cloud for nonprofit, cloud for manufacturing. And then I’m gonna talk about sustainability in a minute, but I think the only one of these right now that isn’t fully available, like RTMGA is manufacturing, which I think is still in preview. Any update on availability on that one? And are there going to be more?

Corey Sanders (05:32):
So the Microsoft cloud manufacturing is is currently available in public preview, as you said, we are working aggressively to bring this into GA. And I think we’re gonna be sharing more information later this year on sort of the GA plans for manufacturing. For, is there going to be more, you know, it’s at this point, first of all, the list that we’ve got is a pretty comprehensive list. But there are certainly discussions around additional industries that we need to focus on and deliver on. And so while again, nothing to announce today, I guess I would say keep your eyes open. Because I suspect there will probably be a few more over the next few years, right. As we continue to sort of expand and grow and learn. The one thing I’ll say about financial services that I just wanted to add.

Corey Sanders (06:20):
This did just go GA earlier this year. And since then, we’ve also now launched in nine more countries. We’ve added six more languages: Dutch, English, French, German, Italian, Spanish, I guess we added, there’s six total languages. It launched, I think, in English. And then we added a bunch of capabilities and partners. So there’s like 90 partners now built on the cloud for financial services. So, this we have sort of been really putting the pedal to the metal for financial services as of late, so exciting to see that growth.

Mary Jo Foley (06:55):
Okay, good. I wanna dig in a little more on the one that I feel like is kind of an outlier in the list of vertical clouds, which is cloud for sustainability. <Laugh> When you guys announced this, I’m like, oh, wait, they were doing all these vertical clouds and now they’ve got one that’s more like a horizontal cloud. So how is this one different or similar to the other industry clouds?

Corey Sanders (07:17):
Yeah. You and I think very alike maybe scary in that way, <Laugh> Mary Jo. But, I mean, I sort of joke and call the cloud for sustainability, the horizontal that applies to every vertical and that in some ways is sort of how it still fits in the conversation. It really is a new category of offering and sort of a build on of existing solutions that we’ve had. The focus is around organizations to be able to record, report, and even reduce their emissions across all of our services. So it follows the same model in that it builds upon all of our horizontal capabilities like Azure, like Dynamics, Power Platform, Power BI, even Teams but, to your point, it actually applies to every vertical.

Corey Sanders (08:04):
And in fact, quite literally, every vertical you go through, you know, energy is looking at carbon capture retails, looking at supply chain optimization, manufacturing, of course, reducing sort of operational waste and water consumption, and even financial services working through financial models for carbon exchanges. So it will touch every single industry that we engage on. And so, I agree with your perspective, it’s a little bit of an outlier in the way we approach it, but in some ways an outlier, because of just the massive impact that it’s going to have, I think, on every single industry that exists today.

Mary Jo Foley (08:41):
Okay. Each of these clouds that you guys have announced have kind of a core set of things like there’s templates and workflows, like we talked about, there’s customized versions of some Microsoft services, like dynamics 365 modules, teams, power BI, and some Azure services like IOT hub, Azure health bot, and such. So we mentioned this a bit earlier about as a customer, what you get when you buy one of these clouds, but do you actually go so far as to guarantee things like 24/7 support in addition to getting all these parts or what else do customers get besides this core toolbox of stuff?

Corey Sanders (09:27):
Yeah, absolutely. So, you know, when you look at each one of the industry clouds has sort of a different somewhat different set of aspects that are included, but you’ve captured it sort of fairly well. You know, there’s going to be sort of built in and supported templates, workflows, data models that, again, accelerate sort of the usage of the solutions but, you know, customizations that are fully supported, but then can be built upon to add even further customization and configuration. And so all of those are included and pretty much all of the clouds, like you said, there is also support is included. And so depending upon sort of the industry, typically the industry requirements for the support, the level of support varies a little bit, but all of them have some amount of support included as well.

Corey Sanders (10:19):
That basically runs the spectrum of those industry specific solutions. And some of them even actually include sort of industry specific architects to come and help customers build the solutions. Cause in some cases, you know, even putting these things together and getting them to land is pretty challenging. And so it’s sort of based on the industry and based on sort of the nature of the solutions and sort of the way in which customers are using them, it varies a little bit. But you know, right now, it includes sort of all those aspects in varying degrees across them. And so, you know, the ultimate goal we are talking about is just how do we help customers use our services in the most efficient and effective way and get to those outcomes. And I do think both the sort of the actual service offerings and then the human support come together to help customers achieve those goals.

Mary Jo Foley (11:15):
Okay. We keep talking about partners being part of this solution set, as well. So, when you say these are partner-driven, partner-led solutions in terms of being the vertical clouds, what does that mean? Does it mean you’re guiding customers to buy these solutions through partners, or does it mean partners have helped design some of these or partners are creating plugins for these? What does it mean that partners figure in heavily?

Corey Sanders (11:41):
Yeah, I mean, I love partners. It’s like the thing that actually, my team kind of makes fun of me the most for, is how much I just love talking with partners and engaging with partners. So there’s a few things that we’re working closely with partners on, in some places we’re sort of in the process on working and some we’ve already shipped. But it is so critical to having sort of a rich partner ecosystem to make these industry solutions truly viable for customers. I mean, the important realization for us to have you know, and specifically for me to have, sort of running the Microsoft cloud for industry team is that our partners are experts in these fields. They’ve been working in these industries for decades.

Corey Sanders (12:27):
They’ve been building out custom solutions and working closely with partners on them. And so the criticality of us going in and working closely with them on either supporting their solutions with capabilities underneath or sort of integrating with their solutions to make them sort of more powerful for end customers. It is really a key goal of how we think about these sort of industry clouds and these industry experiences. You know, some of the examples that I particularly love to call out you know, in Microsoft Cloud for retail, you know, one fantastic partner that we have is dunnhumby Shop. And so they’re available in our AppSource marketplace and they deploy on Azure and they give retailers and brand they give, excuse me, retail and brand quick, self-service access to sort of the insights that shoppers want and help those sort of retail customers decide and determine exactly what to put on their shelves and where to put it on their shelves and so on.

Corey Sanders (13:26):
And that, you can imagine combines with some of our data service or AI services to be able to bring these capabilities together and make them real for customers. Another sort of really good example for me is working closely with tele doc health. We recently in on the Microsoft Cloud for healthcare, we recently introduced Teledoc health solo and it integrates with Microsoft Teams, right? And so for those customers who are using Microsoft Teams and already comfortable, you know, doctors that are using Microsoft Teams already comfortable with it now, Teledoc and that full Teledoc amazing sort of telehealth experience that they’ve built, just flows right into it. And so it doesn’t require people to learn any new experiences or new platforms and it allows sort of that very custom solution to work directly with one of our horizontal strengths, which of course is Teams.

Corey Sanders (14:16):
And so that type of combination, that type of working together, and in fact, I have a dedicated sort of partner team focused on supporting these types of ISV solutions, working closely with SI to be able to come in and bring these components together for customers. It is a really important area for us to be successful and frankly for our customers to be able to be successful using these solutions. So you can see, I can, I can go on and on <laugh> about partner. I could finish the rest of the show, just talking about partners because they’re so critical to our strategy and our customers, I think, rely upon them and depend upon them.

Mary Jo Foley (14:54):
Maybe we’ll just get you the “I love partners” shirt and stuff.

Corey Sanders (14:57):
I need that. Yeah. Like “I love industry partners,” right? Something like “I love vertical partners” on the front and then on the back say, “And also sustainability partners,” since we’ve already concluded, it’s not a vertical <laugh>. So that would be that would be sort of how I put that.

Mary Jo Foley (15:14):
You, you know, what’s gonna also be interesting. I was thinking about this when I was listening to this week’s earnings call from Microsoft, they mentioned Nuance quite a bit. And Nuance before would’ve probably been one of these partners that integrated with these clouds, but now that Microsoft owns nuance, it seems like Nuance’s capabilities around AI and language understanding, transcription, all those could fit into any of your vertical clouds as you guys move forward.

Corey Sanders (15:41):
Yeah, absolutely. Nuance is such amazing technology. I mean, I’m so floored by the capabilities that they built and, but to your point, yeah, exactly. I mean, the sort of prevalence and exposure that they have, let’s say just in healthcare today, is stunning. I mean, it really is sort of the amount of doctors who sort of know by name the Nuance products as sort of how dependent they are upon them. It’s a great example of sort of pre-acquisition. Nuance would’ve absolutely been in that list of like, we depend, we require them because they’re on the minds of doctors. And so how do we help nuance do more for those doctors to your point now that they’ve now that they’re part of Microsoft, which is very, very exciting, such amazing smart people over there, that we’re very actively looking at how some of those AI services, like you said, the speech recognition particularly for sort of you know, very industry specific speech frankly and how that could apply is a really exciting opportunity for sure.

Mary Jo Foley (16:45):
Cool. Okay. I just recently saw a pricing data sheet for one of the clouds. It was the Cloud for Healthcare, and it’s called an add-on it’s priced at $20,000 per tenant, per month, plus additional cost for all the prerequisite products that people would need, like Dynamics 365 modules as your infrastructure services and all. So obviously this is not a set of solutions that’s meant for anybody, but very, very large customers, but I’m curious, does buying this way as an integrated industry cloud ever save customers money? That seems like a lot of money, $20,000 per tenant per month. I mean, is that cost high because customers are paying for integration and support that they normally would’ve done themselves if they were trying to set this up on their own or what’s the thinking around pricing and licensing?

Corey Sanders (17:40):
Yeah, I mean, so there’s probably a few things, I mean, I think you know, per tenant, right? It’s not per user, right? So that’s the key sort of point there. So you know, so it’s not like a seat-based license. No, and the key point is we wanna make sure that the sort of ongoing expectation that you pay for what you use, that the horizontal services remains true. Right. And so we, you know, we didn’t sort of create a pricing model that brought all those components together because some customers may use the components of our, you know, Microsoft Cloud for Healthcare, Microsoft Cloud for Retail that focuses on the Azure, the data, the Team side, and some may use the D 365 models. And so we didn’t sort of wanna force you into paying for services or solutions that weren’t sort of already in your plans or weren’t things.

Corey Sanders (18:28):
So that’s why those are not all included, right? It really is sort of this add-on capability. And then the goal for the add-on is really sort of all of the, both the combined set of sort of things that we already talked about, sort of the templates, the prebuilt solutions the, you know, the customizations and then sort of the enhancements on the existing horizontals you know, fully supported by the team I think are, are a key components to the price. And then one more element of the key of that pricing point is also the, as you mentioned earlier, Mary Jo, the support that’s included so it includes support that spans sort of all the Microsoft technologies in the solution for all severity A and B issues sort of fast response time.

Corey Sanders (19:13):
And of course, any sort of billing support. And then you know, like in the healthcare examples, as I mentioned, sort of earlier, there’s sort of architect and a healthcare solution agent that actually helps manage the support ticket sort of implementation advisory that’s included in addition to sort of access to sort of frequently updated self help, resources and training. And so it is intended to be kind of a one stop shop for all the integrations, all the connectors, all the improvements and add-on capabilities to existing horizontals, and of course the support and advice to get going. So that’s sort of where all the price gets pulled in together.

Mary Jo Foley (19:53):
Got it. Okay. I know these vertical clouds have only been in market a fairly short time, like a year or two max for most of them. So it’s a little early to talk about interest and uptake, but I’m curious, how has the customer reception for these been from your point of view?

Corey Sanders (20:13):
Yeah, it’s been so it’s been really pretty exciting, frankly, to see sort of the momentum and the energy you know, I think with any new product, there’s always gonna be feedback and opportunity to improve. And so and, frankly, if there wasn’t, I wouldn’t have a job. And so I’m excited to kind of take feedback and charge forward, but the excitement around what we’re doing and the focus and then the capabilities that have already launched is really quite astounding, frankly you know. One of the great examples for me is St. Luke’s hospital has built out leveraging on the Microsoft Healthcare Cloud. They’ve utilized the patient 360 capability, which is a part of the care management features in that Microsoft Cloud for Healthcare.

Corey Sanders (20:57):
And what they’re doing is empowering basically their call center employees during this COVID time to create sort of a fantastic omnichannel experience to better understand their customers when they call in and better help the patients. And so it’s just, you know, kind of one really good example of sort of how customers are putting this, putting this to work so quickly, as you mentioned, it’s only been out for what a, a year or so, but like, to being able to sort of put this into work, we’ve seen sort of similar E energy and excitement. Nonprofit has seen a ton of energy and excitement national forest foundation is allowing employees to work from any of their 154 national forests coordinating across them. And then, you know, for sustainability, as we sort of already talked about group of Bimbo, which is actually if you’re not familiar, sort of the world’s largest baking company, they sort of build a huge amount of bread and sort of products that end up in all of our grocery stores.

Corey Sanders (21:56):
So many factories and production lines, 57,000 routes that they run for distribution. And this is where sort of the Microsoft Cloud for Sustainability is really helping them understand with some of the IOT capabilities, some of the some of the logging reporting capabilities to be able to do logistics, traceability and figure out how to reduce their carbon emissions with the goal to achieve net zero. And so these things are going into practice immediately, and it’s awesome to see these real industry-focused scenarios being delivered with such success.

Mary Jo Foley (22:30):
Cool. I know there was, as there always are at Microsoft, a recent reorg where you got a couple new teams joining your organization, IOT mobility, and smart places and energy. So what’s the thinking of bringing those teams to you? Is that gonna bring more IOT capabilities to these vertical clouds or how does this fit in?

Corey Sanders (22:53):
Yeah, so, I mean, Azure IOT is already actually integrated into a bunch of the clouds. Like manufacturing is a good example, like has a big dependency on IOT for digital twins and sort of supporting some of the manufacturing capabilities. The key point, and so it’s seen a lot of momentum across many of those sectors. The key part of this movement, IOT mobility is a lot of the focus on, you know, the mobility industry, sort of the automotive industry and IOT to support that. And so that kind of makes a lot more sense. Frankly, aligning that in my team and smart places applies to a lot of the industries, as well as we look at sort of intelligent stores or other such solutions. And so this will be key to actually supporting some of the growth and opportunity across a bunch of our industries. And so I’m excited about it. I think you’ll see, you will see IOT, you know, filter throughout and continue to grow throughout because it is one of our exciting growth areas. But for these two specifically, they’re sort of key to specific industries that we’re working on currently,

Mary Jo Foley (24:00):
Okay. Cloud for Automotive. That’s my next guess about what’s coming.

Corey Sanders (24:04):
Cloud for Automotive. I’m not gonna confirm it. Deny anything. Darn I know close. Yeah, yeah. Almost had me. <Laugh>

Mary Jo Foley (24:12):
Hey Cory, thanks. Thanks for doing this chat today. Always great to get to talk to you, whether we’re live or virtually.

Corey Sanders (24:20):
Thank you so much. I really appreciate it. And always happy to talk and I hope we get back together, live here pretty soon.

Mary Jo Foley (24:27):
Yeah, me too. For everyone else, who’s listening to this right now or reading a transcript of this chat, I’ll be posting soon who my next guest is going to be. Once you hear that you can submit questions directly on Twitter using the #MJFchat. If I like those questions, I will add them to my list. In the meantime, if you know of anyone else, or even yourself, who might make a good guest for one of these chats, please do not hesitate to drop me a note. Thank you very much.

 

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