Episode 81: Adapt to Change: Microsoft's Success Strategy

Eric Savitz07/02/2024

"We live in a world of change, a world where change is accelerating. If you cannot cope with change, you are in the wrong business. It’s the nature of what we do," says Eric Savitz, Associate Editor for Technology at Barron's, on the rapidly evolving technology landscape leaving businesses scrambling to keep up with the relentless pace of transformation in a new era of artificial intelligence (AI).

In this episode of #shifthappens, host Mario Carvajal, AvePoint's Chief Marketing and Strategy Officer, and Dux Raymond Sy, AvePoint's Chief Brand Officer, invited Eric who has been covering technology and financial industry trends for decades. From the early days of personal computers to the rise of smartphones and cloud computing, Eric shares his perspective on how the world of technology has been defined by its ability to embrace disruption and reinvent itself.

Change is a part of what we must deal with every day. Whether it is in sports or business, there are winners and losers, or new players in the field. Those in the leadership position have demonstrated the ability to adapt to the idea of disruptions and aggressively navigate the pitfalls in transformation. Success does not happen overnight; at times you may need to keep trying and reinventing to find that right path for your journey.

A Look into Microsoft's Transformation

In this race to keep up with AI transformation, Microsoft has emerged as a frontrunner, making aggressive moves that have reshaped the company’s trajectory in embracing cloud computing and AI. Microsoft's AI ambitions extend far as making strategic investments in cutting-edge technologies, including its partnership with OpenAI and the development of language models like the AI-powered Copilot for Microsoft 365.

Eric noted, “Microsoft has done a lot of very smart things in AI. Certainly, the relationship with OpenAI was a farsighted decision." One of the key lessons he emphasized is the importance of being aggressive in adapting to change. He pointed out that Microsoft has been "willing to completely redirect all the energy of a company their size behind that change."

This willingness to "rip up the playbook" and invest heavily in emerging technologies is a crucial factor in Microsoft's success. From running Windows in desktop to Office in the cloud, Microsoft has gone beyond software productivity suites and now became a broad provider of collaboration and communications tools (e.g., OneDrive, SharePoint, and Teams). Eric also noted that Microsoft had a few missteps like Bing search engine, yet they continued to try to keep up with not only their competitors but also with the changing consumer needs (e.g., Xbox gaming software) and enterprise technology trends (e.g., Surface Pro).

However, Eric cautioned that "you need to bring along your customers with you. You can't get too far out in front of them [in transformation] because then they won't go with you." Microsoft's approach with Copilot exemplifies this balance in providing AI-powered productivity tools while actively guiding customers on how to leverage the technology effectively. Customer success is your success—means in helping customers achieve their goals, you can get the most value from your product or services.

The Importance of Data Readiness and Security

With all the technological advancement, such as AI being integrated into business processes, comes the use of big data. Your data needs to be ready to train AI and take advantage of its benefits. Organizations must ensure their data is clean, secure, and accessible in a format that AI systems can utilize effectively.

"You need to make sure that your data provides the value that you want," Eric stressed on the importance of data readiness to generate insights like understanding your customers or making informed decision-making on your own journey or product behavior.

As AI becomes more prevalent, security and ethical concerns are also coming to the forefront. Eric highlighted incidents where AI systems inadvertently revealed sensitive information or were tricked into providing instructions for potentially harmful activities by engineering prompts. There are concerns around intellectual property (IP) rights where a language model showed access to an entire copyrighted book by reciting a specific paragraph, raising questions about the ethical use of training data.

In a digital world where data is everything, data has now become the “new oil,” a new currency that is prone to malicious attack and data corruption. Organizations need to figure out what to do with their data and better manage it to address issues such as data quality, data governance, and data protection.

Embracing Change and its Industry Impact

The history of the technology industry is littered with examples of companies and products that failed to adapt or missed the mark entirely. However, this constant churn has also given rise to countless innovations and emerging players driving the industry forward.

The impact of AI is not only limited to technology but also seen across industries, disrupting traditional business models and forcing companies to rethink their strategies. Eric reflected on how AI is reshaping the journalism industry, pushing news organizations to adapt their processes and explore new content formats. We have seen newspapers and magazines in hardcopy prints getting replaced by digital short-forms content like blogs and podcasts posted on the news agency website.

"We don't have two years to figure this stuff out now. Like it's moving too fast,” Eric noted, "If you're not nimble, if you don't keep up, if you don't change when the world is changing, you're in a bad place." Drawing lessons from Microsoft's remarkable journey in adapting to these shifts can serve as a blueprint for businesses to harness the power of emerging technologies and remain competitive in an increasingly disruptive digital world.

The Right Mindset in Adapting to Change

While many may fail in their pursuit of innovation, new ideas and opportunities also emerge for those willing to change their story overtime, reinventing to transform and exploring new markets to survive. Eric shares three lessons for organizations to lean into:

• Embrace change. Maintain a mindset of continuous adaptation and a willingness to discard old ways of doing things.

• Stay aggressive. Mistakes can happen but stay determined in your pursuit of innovation and reinvent if needed and keep up with the trends.

• Keep the momentum going. Lead your customers, guiding them through the transformation process.

As the AI race continues to accelerate, those who fail to adapt risk being left behind, while those who successfully navigate this ever-changing landscape will emerge as the leaders of the AI era.