Cisco recently announced they are closing down their Spark VR experiment. Whilst it was always an experiment it’s a shame to see a major vendor in the enterprise communications market exit for now, especially as AR/VR are predicted to be multi billion dollar industries over the next 5 years. It may well be enterprise VR delivers more than consumer VR over the next few years.
We already see VR entering the workplace. STRIVR are one of the first adopters moving their sporting examples into large organisations such as Walmart.
The barrier to entry in VR remains high. The Walmart example uses Oculus Rifts which require a laptop, many wires and likely a dedicated room. This is due to change in 2019 with the launch of Oculus Quest. The Quest provides a standalone VR headset which allows six degrees of freedom (essentially the ability to move around) whilst maintaining the performance of the Rift.
With Cisco moving out and Microsoft focusing primarily on their Mixed Reality Hololens it does leave Facebook in a strong position to attack this space.
They have Workplace by Facebook which is their business version of social networking
Finally they also have years of working with Social VR – it may well be true social VR hasn’t grown as expected but the team have almost certainly learnt a great deal of lessons on what does and doesn’t work
If you combine all three elements then the Workplace team don’t just have a direct compete against the likes of Microsoft’s Yammer they have a higher value story.
Lets expand the Walmart example further:
They can shift from the Rift device to a Quest which will allow Walmart to expand their training from dedicated academies to all Walmart stores
The associates who train with the Quest can discuss their experiences with all other associates over Workplace
Finally with Social VR they can meet and discuss in a virtual environment. This may not yet be available but there are companies such as High Fidelity already exploring this type of service
Consumer VR may will be ‘sleeping’ as the market works out the combination of device and services which make a compelling offer but VR in the enterprise could have a break out year in 2019.
Microsoft have major advantages within the Productivity market; an unprecedented install base, Office, large account presence and a strong technical platform to name but a few so why do the likes of Verizon and Airbus look to move away from Microsoft and why does the perception of many enterprise customers maintain that they purchase Microsoft licences but fail to exploit them?
The primary reason I believe is that there remains a gap in the market to deliver Office 365 effectively for customers. Microsoft have built a world class cloud platform for Productivity and have a highly effective sales machine but the market doesn’t yet provide the required skills and experience to exploit.
How do organisations currently fill their Productivity programmes and projects?
Internal IT departments – Office 365 and its predecessor BPOS are still relatively new services within the IT industry – it takes time for the market to build the required experience and skills to deploy. Given that IT departments focus on hiring for the long term within the current maturity curve they will find it difficult to find permanent staff who can guide them through a transformation to cloud and then be able to manage on an on-going basis.
Build a team on contractors. A company may get fortunate and find a team of contractors in the required timeline to deliver their transformation but these resources (especially working as a team) are rare and they don’t scale to meet the needs of an industry.
System Integrators/Partners. Engaging an SI to run a programme is a well utilised route, however there are issues with this path too. SI’s have the same difficulties as organisations and the market – there remains more demand for experienced deployment experts/teams than there are experts/teams. This issue is by no means insurmountable, especially with the promise of multiple projects keeping teams engaged. More fundamentally however SI’s struggle to cope with the key elements of an Office 365 project.
Many of the challenges of Office 365 fall outside of a the core technical delivery. This was not the case in the old world where the technical deployment with servers, data centres and configuration would take several months and many days of effort. Through years of experience SI’s understand how to deploy and price for these services.
But the the key challenges within an Office 365 deployment are not deploying equipment and software they are management of change and customer dependencies such as Network, clients, policies etc. These challenges are typically highly variable in nature and difficult to price and deliver for an external organisation. They miss the core capabilities which SIs attempt to deliver.
Microsoft helping with this challenge
Over the past 5 years Microsoft have implemented key initiatives to help with this challenge; focusing the sales teams on adoption/utilisation as opposed to license sales, gearing up Microsoft Consulting Services to meet the SI challenge, Business Funding, Fast track and Customer Success Unit to name but a few.
These key initiatives are in themselves valid and useful but are missing a vital element of delivering the change successfully within an organisation.
A new type of Partner needs to emerge
Partners need to emerge who lead on End User Adoption but have specific knowledge of programme management and technical delivery.
Key elements of what a Partner needs to bring:
Focus on Education and Adoption – how to get the services out to users quickly and effectively. Be able to educate, inform and monitor usage of the applications. Quickly be able to articulate why it is worth managers and employees to invest the time in the new services.
Customers also need support with explicit knowledge of the challenges of delivering Office 365 within organisations which they can directly input into the programme. The new Partner will bring deep knowledge and experience of previous deployments which will bring credibility to projects and programmes. Using this knowledge the partner would highlight the critical dependencies for a successful deployment unique to the organisation.
Crucially they are act as a specific customer resource who will be with them throughout the deployment – not just an external body floating in at certain times nor a third party who report on customer dependencies and project margins as opposed to actually helping to deploy and reap the rewards.
Since the launch of BPOS and the evolution to Office 365 Microsoft have built an excellent cloud based Productivity suite. Shifting the Office and Productivity business from an on premise/waterfall upgrade cycle to cloud is no mean achievement. In doing this Microsoft have protected their licence based business and made significant inroads into the service revenue which was the preserve of the large System Integrators – displacing SI revenue for direct subscription fees.
I wrote on Tuesday that Office 365 if deployed correctly can add significant value however Microsoft face a set of competitors within the Productivity space which for Microsoft to maintain their lead need to be addressed and quickly.
Competitors have several core elements in common:
They make their services viral and put the customer experience at the forefront of the pitch and are seen to ‘just work’.
They appeal directly to users who have not been brought up on desktops and email but mobile and Whatsapp.
They focus on End User Adoption and adding value as opposed to being caught up in a long technical delivery cycle.
For an organisation’s IT department as a whole these competitors create difficulties including duplicate costs, systems, non integration with AD and security frameworks but IT has limited control to prevent usage. Even if they are aware of usage (often they are not) they don’t wish to be seen to prevent the business from being productive.
Here are a few of the competitors currently making ground against Microsoft:
Zoom Video Conferencing
Eric S Yuan at Zoom is the epitome of the challenger brand, his elevator pitch for Zoom is perfect; ‘Delivering Happiness to Our Users. Your Happiness is My Happiness.’ Microsoft has a very strong video upgrade in Microsoft Teams, the technical improvements made by Teams provides a very good experience however very few users know how to use Microsoft Teams video if enabled. I’m willing to wager that most users would not be able to start a Microsoft Teams video call without direction or help guides.
Zoom just works, sign up and within minutes you can start a video call with virtually anyone. It is such low friction to start using the application it draws a user in and while it wont have the quality of service implemented on a corporate network the quality is ‘good enough’ for normal users to be happy and not be interested in Microsoft’s solutions.
Zoom certainly seems to be increasing market share and adding partners – as large organisations face video upgrade cycles Zoom becomes a very significant option.
Workplace by Facebook
Yammer is an interesting service from Microsoft. Before being bought by Microsoft Yammer was one of the poster children of freemium/shadow IT. It was an easy service to sign up to and consume and BPOS/Office 365 didn’t have any real comparison to Yammer. I think it’s fair to say since Yammer was purchased it has lost some of its dynamism and it doesn’t seem to have really progressed much over the years. Yammer with effort still holds significant value however it takes effort and thought to launch Yammer, without guidance and cultivation Yammer dies on the vine.
Compare with Workplace by Facebook, everyone knows the Facebook interface. When released into an organisation Workplace often grows like wild fire (some might say knot weed). People will have concerns over privacy and Facebook’s recent consumer challenges will lead users to complain about using Workplace but they are typically the people who tend to complain about any IT system. For users who want to collaborate quickly and effortlessly Workplace is ideal. Starbucks have an example with Workplace link.
Workplace recently announced they were moving off the Facebook domain and they have been adding partners to fill the potential gaps in areas such as compliance which are both sensible moves. It’s also interesting to note Facebook do use Office 365 themselves, primarily for email. This gives the Workplace team a good understanding of how Office 365 and Workplace can work together which they can share with potential customers.
I also really think there is great potential in the use of Oculus within the Productivity area – take a look at this recent Walmart example. Especially with Oculus Quest due to launch early next year.
Google Cloud Platform
Google has been trying to attack Microsoft’s Productivity suite for several years and they have definitely made progress but I’d imagine not as much as market analysts would have thought or Google management. However Google Cloud Platform (GCP) could pose a significant challenge within the Productivity area. The growth of machine learning, AI aren’t just buzzwords, they are at the heart of every modern business and with GCP (which includes G Suite) non IT users can relatively easily and quickly create business critical applications. This may send shivers down of an IT department but the challenge very quickly comes back – what should we use? Microsoft are certainly developing their capabilities with Excel online/PowerApps and Flow but Google has a lead in this space, one small example is the ability to share data between Google sheets which currently can’t be done easily with Excel online.
I wrote an article several months back about the Airbus decision to move to Google and I was sceptical of the move but having spent several months with users who use GCP on a daily basis I do understand the benefits. I’m still just not quite sure the market fully understands the impact of building business applications without central IT can have on making Productivity technology decisions.
** There are several others competitors also challenging, please don’t take offence if I haven’t mentioned you, this article is already too long.
