Microsoft’s cloud infrastructure business is leading the company’s ongoing growth, as proven by yesterday’s clean beat on its quarterly earnings.
Indeed, revenue for Microsoft’s Cloud and Enterprise division (internally called C+E) was up 13% year-over-year, as adoption of the Microsoft Azure public cloud computing platform continues to be strong.
In a memo titled “Accelerating Our Momentum Even Further” that was sent to all employees in the C+E division on Wednesday evening, Microsoft Executive VP of the Cloud and Enterprise Group Scott Guthrie laid out some organizational shuffles to keep that train rolling.
Some notable changes to the C+E group:
- T.K. Ranga Rengarajan, Microsoft’s longtime database chief, is leaving his role as head of the Data Platform team to lead Microsoft’s Global Development Centres (GDC), “ensuring we can attract, train and retain our best talent in the world.” He’ll also work to help turn the research projects from Microsoft Garage into commercial products.
- Ranga’s Data Platform team will be streamlined into a new Data Group, headed up by Joseph Sirosh. This group will be responsible for all Microsoft’s database and data analysis products, including SQL Server and Cortana Analytics Suite.
- A new Identity Team will be headed up by David Treadwell and will be responsible for Active Directory, Azure Active Directory, and Microsoft’s other identity products.
- All of Microsoft’s enterprise data backup products will be placed under the purview of the Enterprise Cloud Group, bringing it closer to the Windows Server product.
- The Cloud Server Infrastructure team, which helps build the actual server infrastructure for the Microsoft Azure cloud, is being put under the command of Azure boss Jason Zander, “to design and plan our public cloud software + hardware work even more closely going forward.”
“Customers are super excited about what you are delivering, and the results you are delivering are hugely impactful to Microsoft’s success,” Guthrie writes to Microsoft employees.
Here’s the full text of the memo:
At our C+E all-hands meeting in June we showcased some of the great products and services being built in C+E, and celebrated the great business success we had in FY15. The pace of innovation has continued since then — with major new capabilities being announced and released pretty much every week since that all hands meeting. Here are just a few of the big releases we’ve done since then: Visual Studio 2015 and .NET GA, Power BI GA, Azure IoT Suite GA, Cortana Analytics Suite, Azure DataLake, Azure HDInsight on Linux GA, Azure SQL DataWarehouse, Azure AD B2C & B2B, Azure Security Center, SQL Server 2016 CTP 2.4, Microsoft Advanced Threat Analytics, OMS updates for VMWare DR and Backup, Azure Media Services Live Encoding, Windows Server 2016 and System Center 2016 Preview, and a whole lot more…
Today’s release of Microsoft’s quarterly performance and earnings was also a good reminder of the critical role that C+E has in driving the overall growth for the company. Our C+E revenue grew 13% year over year, fuelled by our cloud services revenue growing 122% yr/yr and double digit growth with the premium versions of SQL Server, Windows Server and System Center. These are some very impressive growth rates on some very big revenue numbers.
Thank you for the incredible work you’ve done to make this happen. You should all feel very proud.
Accelerating our Momentum
Today we are announcing some organizational changes within C+E that will enable us to further accelerate our customer momentum and move even faster as an organisation. Our new C+E structure will be aligned around our key strategic businesses (Cloud Infrastructure, Data and Analytics, Business Applications and App Platform, Enterprise Mobility, Developer). As part of today’s changes we are also bringing several teams even closer together to enable us to make deeper shared technology bets.
Each team in C+E will have a clear, focused charter. Our culture will continue to be grounded in a Growth Mindset. We’ll exercise this by being Customer-Obsessed, Diverse and Inclusive, and by working as One Microsoft to Make a Differencefor our customers and partners. We’ll embrace data driven decision making and optimise for continuous learning and improvement.
Below are details of the new C+E teams + leaders. Each of the teams will report to me effective immediately:
We are the only company in the world delivering both a hyper-scale public cloud offering (Azure) as well as a consistent private cloud offering (AzureStack) that can collectively be managed using an integrated hybrid cloud management solution (OMS). This combination delivers incredible flexibility to customers and our partners. We will deliver these capabilities with three teams:
The Azure team will continue to be led by Jason Zander. The Cloud Server Infrastructure (CSI) team, led by Bill Laing,which has the charter to develop and specify the server hardware used to run Microsoft cloud services, will today join the Azure team with Bill Laing reporting to Jason Zander. This will enable us to design and plan our public cloud software + hardware work even more closely going forward.
The Enterprise Cloud Group will continue to be led by Mike Neil. The Hybrid Storage and Data Protection team, led byGuru Pangal, which builds our StorSimple, Azure Backup, Azure Disaster Recovery, and System Center Data Protection offerings, will today join the Enterprise Cloud Group with Guru Pangal reporting to Mike Neil. The combined team will own Windows Server, System Center, Operations Management Suite (OMS), Azure Stack, and StorSimple. Additionally, Jeff Sandquist and the Content Publishing team will join ECG. Jeff will report to Mike Neil.
The Microsoft Cloud Infrastructure and Operations (MCIO) team will continue to be led by Suresh Kumar. The MCIO team is responsible for managing our cloud datacenters and cloud hardware supply chain.
Data and Analytics
More and more data is being created and stored in the world, and there is an ever-increasing need to derive insight from that data and turn it into intelligent action. Enabling customers to do this in a differentiated way with our data platform is critical to the success of C+E. Given the increasing role that analytics will play in our data strategy, we are going to combine our existingIMML and Data Platform teams to form a new Data Group.
I’ve asked Joseph Sirosh to lead the newly combined Data Group organisation. The Data Group will be responsible for SQL Server, SQL DB, and our Cortana Analytics Suite (SQL Data Warehouse, HDInsight, Data Lake, Stream Analytics, Data Factory, Data Catalogue and Machine Learning).
With these changes, I want to extend my sincere gratitude and appreciation for Ranga’s leadership of the Data Platform team. Over the past two years, Ranga has driven significant cultural transformation in the Data Platform team, notably in focusing on execution, faster innovation and delighting customers. His leadership was instrumental in growing the service culture in SQL DB and launching and growing the full complement of Azure data services — Data Lake, DocumentDB, Search, SQL DW, HDInsight on Linux. I can’t thank him enough for the fantastic releases he has delivered, and the positive cultural changes he has led. He has really done a phenomenal job.
Going forward, Ranga will take a new leadership role in TnR. In his new role, Ranga will take on the oversight of our overall Microsoft Global Development Centres (GDC), ensuring we can attract, train and retain our best talent in the world. Ranga will also be our exec sponsor for creative programs like The Garage to bring our innovations to market. In addition, Ranga will work with Harry and MSR teams to incubate advanced technology projects in the areas of system and performance. Ranga will report to Harry Shum.
Business Applications and Application Platform
As organisations move to the cloud, an increasing percentage of their IT budgets will move to purchasing SaaS-based business applications. Since this summer when the Dynamics organisation joined C+E, I’ve had the opportunity to spend a lot of time with the Dynamics team and have been very impressed with the efforts already underway. Collectively we’ve also realised that the end-to-end possibilities we can unlock across the Dynamics + Azure + Data + EMS + Visual Studio portfolio are enormous.
There is very strong customer demand for apps and tools that simplify and accelerate the creation of new business solutions. Businesses want to be able to adopt solutions that are SaaS based, ease the creation of new business processes, provide rich BI and Analytics views on the business outcomes, and can be easily extended and customised with a flexible mobile and web application platform.
With today’s organizational changes we are going to be significantly increasing our R&D investments in the business applications space, and will build an Azure-based business application platform that can be used both to power our own 1stparty business applications, as well as to enable 3rd party ISVs to build their own business applications on top of it as well. We will accomplish this with two teams:
The CRM Business Applications Team will continue to be led by Bob Stutz. The CRM Biz Apps team is responsible for our Sales Automation, Customer Service, Marketing Solutions, Social Engagement, and Field Service applications.
We are also today creating a new Business Applications, Platform and Intelligence team which will be led by James Phillips. The AppPlat Team, led by Bill Staples, which builds our Azure AppService, Project Sienna, Ibiza Portal, Media Services, ASP.NET, EF and key .NET Framework components, will be part of this team with Bill reporting to James Phillips. The Dynamics ERP team, led by Mike Ehrenberg, which delivers our Dynamics AX, NAV, GP, SL business applications, will also be part of this team with Mike reporting to James Phillips. The Power BI team that James previously led will also be part of this organisation. Collectively the new team will be responsible for delivering our business operations applications as well as for delivering the underlying business application platform that can be used to extend and integrate with them. Having both the business app platform + business apps be part of this unified organisation will ensure we synergize all of these assets together to deliver a complete cloud offering uniquely optimised for modern business.
Our Enterprise Mobility Suite (EMS) enables IT to securely deliver and manage SaaS based solutions — both Microsoft solutions (Office 365, Dynamics, Power BI, etc) as well as more than 2600 other SaaS offerings from partners — and do so across any device (Windows, Mac, iOS and Android). Three teams deliver our EMS Suite:
The Identity Team will be led by David Treadwell. The Identity team is responsible for Active Directory, Azure Active Directory and our MSA identity systems.
The Enterprise Client and Mobile Team will continue to be led by Brad Anderson. The Enterprise Client and Mobile Team is responsible for InTune, SCCM and our RDP as well as RemoteApp Service.
The Security Team will continue to be led by Bharat Shah. The Security team is responsible for the security elements of our EMS Suite, RMS, Advanced Threat Analytics, Adallom, as well as our new Azure Security Center. Bharat’s team is also responsible for driving overall operational security for our online services as well as for MSRC.
Developer Tools and Services
Our Visual Studio Family of developer tools and services provides a complete solution for building modern cloud and mobile applications.
The Visual Studio Tools and .NET Team will be led by Julia Liuson. John Montgomery who leads the Visual Studio and .NET PM team will report to Julia going forward. The VS Code Team, led by Shanku Niyogi, which is responsible for our cross-platform developer tools, will also today join the Visual Studio Tools and .NET Team with Shanku also reporting to Julia.
The Visual Studio Online Team will continue to be led by Brian Harry. The VSO team is responsible for both our 3rd party developer services, as well as for new One Microsoft Engineering System.
Customer Growth, Analytics & Billing
One of the best practices that many successful online companies use is to have a “growth” focused engineering team which is responsible for deeply understanding customers and driving further customer acquisition and engagement.
The Customer Growth, Analytics & Billing Team will be led by Steven Martin. This organisation will help teams across C+E gain deep customer insights using data. As part of today’s changes the Customer Acquisition and Billing (CAB) team led bySujal Parikh and Matt Steele will also join this organisation. This move will add significant engineering talent to the Customer Acquisition, Analytics & Billing Team, as well as enable us to align our Billing Engineering Team and Billing Operations Team (which was previously part of Steven’s organisation) together.
The China Azure team will continue to be led by Samuel Shen. This team is focused on driving the success of our cloud based services in China. They have helped us make tremendous progress the last few months, and will continue to accelerate our adoption with our China Azure service.
The C+E Strategy team will continue to be led by James Staten. This team is focused on helping to drive our overall C+E strategy efforts, as well as working across Marketing and the field to coordinate our efforts.
I am really excited about the great progress we are making in C+E. Customers are super excited about what you are delivering, and the results you are delivering are hugely impactful to Microsoft’s success. THANK YOU for your continued investments, energy and teamwork that has enabled our success to date, and your commitment to accelerating our momentum going forward. We are going to have a great year ahead of us!