The team formed to handle Microsoft’s biggest moonshots just released its first growth strategy, according to internal documents seen by Insider. The plan reveals the group’s desire to change Microsoft’s image “from being viewed as a provider of productivity to a cloud-focused, mission-driven, strategic innovation provider” and how it plans to grow its business from federal government and communications to fund innovative projects in the future.
Last year, Microsoft created an organization to house the company’s moonshots – those companies that represent what could be the next big thing for the tech titan. Called Strategic Missions and Technologies (SMT) and led by former Azure boss Jason Zander, it brings together cutting-edge initiatives including quantum computing and space alongside its government cloud business.
In an email to the SMT organization last week, Zander shared what he called the “first SMT growth strategy,” describing the unit as “the nexus to scale innovation and new businesses for Microsoft”. The strategy includes the group’s mission statement: “Our mission is to transform telecommunications and computing as we know them, through technological innovation and scientific discovery with the mission of the United States federal government as our anchor customer. .”
The organization comprises five companies: Microsoft Federal, which provides services to the US federal government, the quantum computing unit Azure Quantum, its communications services for network operators (including Azure Operators Industry for telecommunications and Azure for advanced operator services), mission engineering and growth. and the innovation strategy.
Despite lofty long-term goals like “harnessing the laws of physics to enable the near-endless possibilities of commercial quantum computing,” Microsoft plans to prioritize investments that will result in business growth for the company. current fiscal year, according to the documents.
The organization’s primary focus will be to grow its core businesses, Microsoft Federal and Communications, to “maintain a strong revenue base that can be reinvested in technology innovation, which teams can then incubate and grow into new products.” and activities in future periods,” the documents state.
Microsoft expects the total addressable market in the company’s fiscal year 2025 for Microsoft Federal to reach $105 billion and $149 billion for the Microsoft Communications unit. The company aims to double the revenue generated by then, with an expected growth rate of 16%, 39% and 27% over the next three years, the document said.
The documents indicate that the company expects the Microsoft Federal business to be its primary driver of growth in the company’s current fiscal year and has increased Azure credited revenue for apps and software by 71%. cloud infrastructure and revenue from its Modern Workplace employee productivity software by 23%. Microsoft expects its Communications business to grow 12.8%, the documents show.
To grow the Federal business, the documents say Microsoft already has 90% market penetration for Modern Workplace — its class of business apps that includes the ubiquitous Microsoft Office 365 productivity suite — and wants to focus on growth instead. “data-powered, high-value cloud workloads”. and secure clouds for government. Microsoft notably won a $10 billion Pentagon cloud contract, but the agency ultimately canceled the contract after a lengthy legal challenge from Amazon.
“To enable this transition, it is imperative that we are able to exercise thought leadership to shift the market perception of Microsoft from being a provider of productivity to a provider of strategic cloud-focused innovation and mission-driven, leveraging our strong reputation within the company,” the document reads.
The documents also shed light on how Microsoft communicates each unit’s mission statement to employees, as well as to responsible leaders:
- Microsoft Federal, led by Corporate Vice President Rick Wagner: “Microsoft Federal is changing the way the federal government innovates by bringing technology to its toughest missions.”
- Azure Quantum, led by CVP Zulfi Alam: “The Azure Quantum team designs the quantum machine to solve a better future.”
- Communications: Azure for Operators Industry, led by CVP Yousef Khalidi, “offers telecommunications companies and governments a ubiquitous hybrid cloud platform delivered over a secure programmable network.” Azure for Operators, led by CVP Martin Lund “accelerates cloud transformation of mission-critical communication networks for Core and Edge services.”
- Mission Engineering, led by Zach Kramer: “Mission Engineering provides the innovation and technology that creates the ecosystem that transforms the mission.”
- Growth Innovation and Strategy, led by CVP and COO Mitra Azizirad: “GIS is accelerating SMT’s innovation and business performance, which will fuel revenue growth and strategic investments today and for the next decade.
Ashley Stewart is a senior technical correspondent at Insider. Are you a Microsoft employee or do you have ideas to share? Contact the reporter via the Signal encrypted messaging app (+1-425-344-8242) or email (firstname.lastname@example.org).
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