In December, we shared the State of Tech Intensity study, which highlighted a trend we are seeing in our work with customers: many organizations are going beyond simply adopting the latest tools and technologies and are building their own unique digital capabilities. This shift is accelerating change in these organizations and helping them propel their businesses forward in new ways. Leveraging innovative technologies like artificial intelligence (AI), the Internet of Things (IoT) and machine learning built on Microsoft’s cloud, there were numerous examples this past quarter of initiatives our customers across multiple industries are pursuing — and how many are putting technology at the heart of their business strategies.
In automotive, manufacturers are redefining experiences to shape the future of mobility, while also helping address challenges that conventional computing alone cannot solve. Through our partnership with Ford, we’re exploring the potential for using quantum algorithms to solve urban traffic congestion. Bosch is leveraging Microsoft Azure data services to create one of the world’s first connectivity-based, wrong-way driver warning solutions aimed at helping drivers avoid serious accidents.
Global technology company ZF Friedrichshafen is transforming into a provider of software-driven mobility solutions, leveraging Azure cloud services and developer tools to promote faster development and validation of connected vehicle functions at a global scale. Ericsson is integrating its Connected Vehicle Cloud, which connects more than 4 million vehicles across 180 countries, with Microsoft’s Connected Vehicle Platform to accelerate the delivery of safe, comfortable and personalized connected driving experiences with our cloud, AI and IoT technologies. We are also helping Scania build a modern workplace foundation to break down communication barriers and meet ever-growing security requirements through cloud-based collaboration tools like Microsoft 365 and Teams.
In transportation and logistics, Danish company Maersk, one of the largest container shipping and supply vessel operators in the world, is leveraging Microsoft’s security capabilities in Azure and Microsoft 365 to streamline and automate classification for more than 6.6 million documents every month, improving communications and reducing the risk of data loss and regulatory non-compliance. Maersk has also implemented Identity Protection to further enhance its security posture.
In highly regulated industries like insurance, where regulatory compliance and high security standards are a top priority, customers are choosing Microsoft as their trusted cloud provider to help ensure these needs are met while building new digital capabilities. KPMG is bringing the latest advances in cloud and AI to highly regulated workloads in tax, audit and advisory. This move is helping its clients achieve greater accuracy and decision-making capabilities, increased productivity and cost efficiencies with tools such as Dynamics 365 and Teams. German-based Allianz, along with our partner Syncier, is reimagining the insurance industry experience by creating a new cloud-based marketplace built on Azure with customized platform solutions and related services tailored to the industry. Automobile insurer GEICO is turning to Azure to modernize its internal business applications and create a frictionless experience for its customers, from real-time updates to performance and security. AXA, an insurance provider spanning more than 60 countries, is reimagining how it engages with its 105 million customers around the globe using Microsoft 365 productivity tools for its workforce.
In the public sector space, we appreciate the opportunity to work with the Department of Defense to develop and deploy their general purpose enterprise cloud infrastructure. Under the Joint Enterprise Defense Infrastructure (JEDI) contract, we look forward to helping the DoD bring the latest technology to our men and women in uniform in the years ahead.
Our customers in communications, services and media have a unique opportunity to meet the growing global demand within their industries — by advancing their business with cloud-centric strategies. Telstra, Australia’s largest telecommunications company, is using Microsoft Teams and the Microsoft Power Platform to work more collaboratively across the organization. They are also leveraging insights from PowerBI to break down data silos and create a unified source of truth to help meet the needs of more than 18 million customers. Japan-based NTT has chosen Microsoft Azure as its preferred cloud platform for modernizing its global IT infrastructure and customer solutions in the areas of advanced analytics for cybersecurity threat intelligence and the hybrid-IT management platform. Our strategic collaboration with Nokia will apply our cloud, AI, IoT and machine learning expertise across mission-critical networking and communications to drive economic growth and productivity for both enterprises and service providers. We also further expanded our partnership with AT&T by announcing our first joint-offering, AT&T Network Edge Compute (NEC) technology, which weaves Azure services into AT&T’s network edge locations closer to customers, unlocking new scenarios for edge computing across industries.
KKBOX Group is harnessing the power of our cloud for new music and video streaming experiences for customers as well as AI technologies to help people more easily discover and listen to music. And in October, SAP selected Microsoft Azure as its preferred cloud provider, deepening the relationship between our two companies in a differentiated way. Through this partnership, we have helped customers like Coca-Cola, Walgreens Boots Alliance and CEMEX with their transformation initiatives by successfully moving their SAP workloads onto Azure. This agreement signals a shared commitment to fostering the growth of the cloud ecosystem.
As we enter a new decade, I am extremely excited to see what new digital capabilities will emerge from our customers. From transforming businesses to advancing industries, the opportunity for our customers has never been greater, and we are ready to help them take the next step in their digital journey through close partnerships and new technologies.
The scientific consensus is clear. The world confronts an urgent carbon problem. The carbon in our atmosphere has created a blanket of gas that traps heat and is changing the world’s climate. Already, the planet’s temperature has risen by 1 degree centigrade. If we don’t curb emissions, and temperatures continue to climb, science tells us that the results will be catastrophic.
As the scientific community has concluded, human activity has released more than 2 trillion metric tons of greenhouse gases into the Earth’s atmosphere since the start of the First Industrial Revolution in the mid-1700s. Over three-quarters of this is carbon dioxide, with most of this carbon emitted since the mid-1950s. This is more carbon than nature can re-absorb, and every year humanity pumps more than 50 billion metric tons of additional greenhouse gases into the air. This isn’t a problem that lasts a few years or even a decade. Once excess carbon enters the atmosphere it can take thousands of years to dissipate.
The world’s climate experts agree that the world must take urgent action to bring down emissions. Ultimately, we must reach “net zero” emissions, meaning that humanity must remove as much carbon as it emits each year. This will take aggressive approaches, new technology that doesn’t exist today, and innovative public policy. It is an ambitious – even audacious – goal, but science tells us that it’s a goal of fundamental importance to every person alive today and for every generation to follow.
Microsoft: Carbon negative by 2030
While the world will need to reach net zero, those of us who can afford to move faster and go further should do so. That’s why today we are announcing an ambitious goal and a new plan to reduce and ultimately remove Microsoft’s carbon footprint.
By 2030 Microsoft will be carbon negative, and by 2050 Microsoft will remove from the environment all the carbon the company has emitted either directly or by electrical consumption since it was founded in 1975.
We recognize that progress requires not just a bold goal but a detailed plan. As described below, we are launching today an aggressive program to cut our carbon emissions by more than half by 2030, both for our direct emissions and for our entire supply and value chain. We will fund this in part by expanding our internal carbon fee, in place since 2012 and increased last year, to start charging not only our direct emissions, but those from our supply and value chains.
We are also launching an initiative to use Microsoft technology to help our suppliers and customers around the world reduce their own carbon footprints and a new $1 billion climate innovation fund to accelerate the global development of carbon reduction, capture, and removal technologies. Beginning next year, we will also make carbon reduction an explicit aspect of our procurement processes for our supply chain. Our progress on all of these fronts will be published in a new annual Environmental Sustainability Report that will detail our carbon impact and reduction journey. And lastly, all this work will be supported by our voice and advocacy supporting public policy that will accelerate carbon reduction and removal opportunities.
Taking a principled approach
Whenever we take on a new and complex societal issue, we strive first to learn and then to define a principled approach to guide our efforts. This has been fundamental to our work around the protection of privacy and the ethical development of artificial intelligence, and it’s the approach we’re taking to pursue our aggressive carbon goals as well. We’ve concluded that seven principles, or elements, will be vital as we continually innovate and take additional steps on an ongoing basis.
Grounding in science and math. We will continually ground our work in the best available science and most accurate math, as we describe further below.
Taking responsibility for our carbon footprint. We will take responsibility for all our emissions, so by 2030 we can cut them by more than half and remove more carbon than we emit each year.
Investing for new carbon reduction and removal technology. We will deploy $1 billion of our own capital in a new Climate Innovation Fund to accelerate the development of carbon reduction and removal technologies that will help us and the world become carbon negative.
Empowering customers around the world. Perhaps most importantly, we will develop and deploy digital technology to help our suppliers and customers reduce their carbon footprints.
Ensuring effective transparency. We will publish an annual Environmental Sustainability Report that provides transparency on our progress, based on strong global reporting standards.
Using our voice on carbon-related public policy issues. We will support new public policy initiatives to accelerate carbon reduction and removal opportunities.
Enlisting our employees. We recognize that our employees will be our biggest asset in advancing innovation, and we will create new opportunities to enable them to contribute to our efforts.
Grounding in science and math
It’s vital that our work as a company to address carbon issues stay grounded in ongoing scientific advances and an accurate reliance on the basic but fundamental mathematical concepts involved. And this is true for all of us as individual consumers and the business community more broadly.
In some respects, the situation is straightforward. As shown in the graph below, advances in human prosperity, as measured by GDP growth, are inextricably tied to the use of energy. This is true for the future as well as the past. If we’re going to continue to create more economic opportunity and prosperity, it likely will require even more energy use. This is true everywhere in the world, and it’s perhaps especially true among the world’s developing economies, which deserve the opportunity to catch up with the level of prosperity in more industrialized nations.
For more than two centuries and especially since the 1950s, economic development has required an ever-increasing amount of carbon emissions. This is the part of the past that we need to change. In short, we need to use more energy while reducing our emission of carbon.
The importance of this issue is underscored by the advances in scientific research during the past few years. These findings make clear both that the average temperature on the planet has risen by 1 degree Celsius during the past 50 years and that carbon dioxide emissions have been a primary driver of this and this temperature increase. Indeed, if we fail to change substantially and quickly, there is a high risk that average temperatures will increase between another one and four degrees Celsius by the end of this century. And the impact of such a temperature increase would be catastrophic.
A big part of the challenge is that as a society we have not committed sufficiently to reduce emissions. One conclusion we’ve reached is that we all need to learn – and get real – about “carbon math.” This is the basic mathematical concepts that are important to understanding how the carbon issue applies to each of us, whether as individuals, families, businesses, or other organizations.
One aspect of this is relatively simple but quite important. Scientists account for carbon emissions by classifying them into three categories, or “scopes.”
Scope 1 emissions are the direct emissions that your activities create — like the exhaust from the car you drive, or for a business, the trucks it drives to transport its products from one place to another or the generators it might run.
Scope 2 emissions are indirect emissions that come from the production of the electricity or heat you use, like the traditional energy sources that light up your home or power the buildings owned by a business.
Scope 3 emissions are the indirect emissions that come from all the other activities in which you’re engaged, including the emissions associated with producing the food you eat, or manufacturing the products that you buy. For a business, these emission sources can be extensive, and must be accounted for across its entire supply chain, the materials in its buildings, the business travel of its employees, and the full life cycle of its products, including the electricity customers may consume when using the product. Given this broad range, a company’s scope 3 emissions are often far larger than its scope 1 and 2 emissions put together.
This makes clear that we need to measure all three of these scopes. At Microsoft, we expect to emit 16 million metric tons of carbon this year. Of this total, about 100,000 are scope 1 emissions and about 4 million are scope 2 emissions. The remaining 12 million tons all fall into scope 3. Given the wide range of scope 3 activities, this higher percentage of the total is probably typical for most organizations.
There’s another aspect of carbon math that’s also essential. This is the difference between being “carbon neutral” and being “net zero.” While they sound similar, in fact they’re different.
Given common usage, companies have typically said they’re “carbon neutral” if they offset their emissions with payments either to avoid a reduction in emissions or remove carbon from the atmosphere. But these are two very different things. For example, one way to avoid a reduction in emissions is to pay someone not to cut down the trees on the land they own. This is a good thing, but in effect it pays someone not to do something that would have a negative impact. It doesn’t lead to planting more trees that would have a positive impact by removing carbon.
In contrast, “net zero” means that a company actually removes as much carbon as it emits. The reason the phrase is “net zero” and not just “zero” is because there are still carbon emissions, but these are equal to carbon removal. And “carbon negative” means that a company is removing more carbon than it emits each year.
While we at Microsoft have worked hard to be “carbon neutral” since 2012, our recent work has led us to conclude that this is an area where we’re far better served by humility than pride. And we believe this is true not only for ourselves, but for every business and organization on the planet.
Like most carbon-neutral companies, Microsoft has achieved carbon neutrality primarily by investing in offsets that primarily avoid emissions instead of removing carbon that has already been emitted. That’s why we’re shifting our focus. In short, neutral is not enough to address the world’s needs.
While it is imperative that we continue to avoid emissions, and these investments remain important, we see an acute need to begin removing carbon from the atmosphere, which we believe we can help catalyze through our investments.
In addition, we’ve identified another shortcoming that we and many other companies need to overcome. Historically we’ve focused on Microsoft’s scope 1 and 2 emissions, but other than employee travel, we haven’t calculated as thoroughly our scope 3 emissions. That’s why we’re committing to becoming carbon negative for 2030 for all three scopes.
Taking responsibility for our carbon footprint
Based on this science and math, we’re launching today an aggressive plan to reduce Microsoft’s own carbon emissions. It has three broad components.
First, we will drive down our scope 1 and 2 emissions to near zero by the middle of this decade through the following steps:
By 2025, we will shift to 100 percent supply of renewable energy, meaning that we will have power purchase agreements for green energy contracted for 100 percent of carbon emitting electricity consumed by all our data centers, buildings, and campuses.
We will electrify our global campus operations vehicle fleet by 2030.
We will pursue International Living Future Institute Zero Carbon certification and LEED Platinum certification for our Silicon Valley Campus and Puget Sound Campus Modernization projects.
Second, we will reduce our scope 3 emissions by more than half by 2030 through new steps, including the following:
In July 2020, we will start phasing in our current internal carbon tax to cover our scope 3 emissions. Currently this fee is $15/metric ton and covers all scope 1 and 2 emissions, plus scope 3 travel emissions. Unlike some other companies, our internal carbon tax isn’t a “shadow fee” that is calculated but not charged. Our fee is paid by each division in our business based on its carbon emissions, and the funds are used to pay for sustainability improvements.
Starting in July, all our business divisions will also pay an internal carbon fee for all their scope 3 emissions. We will start at a lower price per ton than our current fee for other emissions, but we will phase in increases over time until all our scope 1, 2, and 3 emissions are charged the same rate. This will both increase incentives across the company to reduce all scope 3 emissions and fund the added work to reduce our own scope 3 emissions and invest in carbon removal activities.
By July of 2021, we will begin to implement new procurement processes and tools to enable and incentivize our suppliers to reduce their scope 1, 2, and 3 emissions. We will work with our suppliers to implement consistent and accurate reporting and pursue effective steps to make progress against scientifically based targets.
Third, by 2030 Microsoft will remove more carbon than it emits, setting us on a path to remove by 2050 all the carbon the company has emitted either directly or by electrical consumption since it was founded in 1975. We will achieve this through a portfolio of negative emission technologies (NET) potentially including afforestation and reforestation, soil carbon sequestration, bioenergy with carbon capture and storage (BECCs), and direct air capture (DAC).
Microsoft will form its carbon removal portfolio annually by assessing NET attributes pertaining to four criteria: (1) scalability; (2) affordability; (3) commercial availability and (4) verifiability. Given the current state of technology and pricing, we will initially focus on nature-based solutions, with the goal of shifting to technology-based solutions between now and 2050, when they become more viable.
Investing for new carbon reduction and removal technology
Solving our planet’s carbon issues will require technology that does not exist today. That’s why a significant part of our endeavor involves putting Microsoft’s balance sheet to work to stimulate and accelerate the development of carbon removal technology. Our new Climate Innovation Fund will commit to invest $1 billion over the next four years into new technologies and expand access to capital around the world to people working to solve this problem. We understand that this is just a fraction of the investment needed, but our hope is that it spurs more governments and companies to invest in new ways as well.
We will primarily deploy this capital in two areas: (1) to accelerate ongoing technology development by investing in project and debt finance; and (2) to invest in new innovations through equity and debt capital.
We’ll focus our funding on investments primarily based on four criteria: (1) strategies that have the prospect of driving meaningful decarbonization, climate resilience, or other sustainability impact; (2) additional market impact in accelerating current and potential solutions; (3) relevance to Microsoft by creating technologies we can use to address our unpaid climate debt and future emissions; and (4) consideration of climate equity, including for developing economies.
In addition to this new fund, we will continue to invest in carbon monitoring and modeling projects through our AI for Earth program, which has grown over the past two years to support more than 450 grantees across more than 70 countries.
Empowering customers around the world
We believe that Microsoft’s most important contribution to carbon reduction will come not from our own work alone but by helping our customers around the world reduce their carbon footprints through our learnings and with the power of data science, artificial intelligence, and digital technology. For many customers, sustainability is already a core part of their business, while others are just beginning their work to mitigate their carbon impact. Regardless of where organizations are on their journey, we’re committed to being of help.
Better tracking of carbon starts by creating greater transparency on the carbon impact of services and products. Today we’re launching a new tool, the Microsoft Sustainability Calculator that analyzes the estimated emissions from Azure services through a Power BI dashboard. This helps customers better understand the carbon impact of their cloud workloads, discover the potential benefits from fully migrating to Azure, and assists them in reporting their carbon footprint for IT services for the often hard-to-track Scope 3 emissions.
We will follow this with new solutions and offerings that go further, including providing insight across Scopes 1, 2 and 3 and material circularity related to all Microsoft Azure services. We will also provide greater transparency on the carbon performance of Teams, Edge and other services and solutions. This work builds on a foundation of science-based methodologies and transparency on environmental performance of our cloud infrastructure and supply chain.
We are also launching a new 24/7 matching solution with Vattenfall – a first-of-its-kind approach that gives customers the ability to choose the green energy they want and ensure their consumption matches that goal using Azure IoT. This new level of transparency can enable users to adjust their business operations to better fit the availability of the green energy they prefer, further decreasing their carbon footprint.
We are also committed to pursuing new partnerships with our customers to address carbon reduction. This will include co-innovating with customers and partners to develop low-carbon solutions, as we’ve done with L&T Technology Services, ABB, and Johnson Controls on sustainable smart building solutions capable of reducing energy consumption by 40 percent; embedding sustainability into our strategic alliances as we’ve pioneered with AT&T and NTT; driving cross-industry collaborations and coalitions to develop new standards and tools.
The significance and complexity of the task ahead is incredible and will require contributions from every person and organization on the planet. That’s why we are committed to continuing to work with all our customers, including those in the oil and gas business, to help them meet today’s business demands while innovating together to achieve the business needs of a net zero carbon future. Continued improvement in standards of living around the world will require more energy, not less. It’s imperative that we enable energy companies to transition, including to renewable energy and to the development and use of negative emission technologies like carbon capture and storage and direct air capture. All this must be paired together to achieve the growing energy needs of an expanding global economy.
Ensuring effective transparency
When it comes to carbon reduction, real progress requires real transparency. As we’re doing today, Microsoft will continue to disclose the carbon footprint of our services and solutions. We will support strong industry-wide standards for transparency and reporting on carbon emissions and removal, and we will apply these ourselves.
Today we are also signing the United Nations’ 1.5-degree Business Ambition Pledge, and we hope many other companies will also join. We will publicly track our progress in our annual Environmental Sustainability Report.
Using our voice on carbon-related public policy issues
We will also use our voice to speak out on four public policy issues that we think can advance all of the world’s carbon efforts:
The need to expand global basic and applied research efforts on carbon, funded by governments, and reorient them towards targeted outcomes and enhanced cross-border collaboration to develop the breakthrough technologies needed to achieve net zero global emissions.
The removal of regulatory barriers to help catalyze markets to enable carbon-reduction technologies to scale more quickly.
The use of market and pricing mechanisms so people and businesses can make more informed carbon decisions.
The empowerment of consumers through transparency based on universal standards to inform purchasers about the carbon content of goods and services.
Enlisting our employees
Finally, we’ll capitalize on the energy and intellect of our employees by inviting and encouraging them to participate in our carbon reduction and removal efforts. As we’ve found with Microsoft’s accessibility efforts, we believe that sustainability is a cause that is not only important to our employees, but an area where they can generate important insights and innovations across the company.
We will create more opportunities for our employees to become actively involved, both in company-wide activities and in the work of their individual teams. We’re launching today an expanded internal site where our employees can learn more. Each year this work will culminate during our annual weeklong hackathon event that will include a specific focus and call for proposals on carbon reduction and removal.
The world’s next moonshot
Reducing carbon is where the world needs to go, and we recognize that it’s what our customers and employees are asking us to pursue. This is a bold bet — a moonshot — for Microsoft. And it will need to become a moonshot for the world.
It won’t be easy for Microsoft to become carbon negative by 2030. But we believe it’s the right goal. And with the right commitment, it’s an achievable goal. We will need to continue to learn and adapt, both separately and even more importantly in close collaboration with others around the world. We believe we launch this new initiative today with a well-developed plan and a clear line of sight, but we have problems to solve and technologies that need to be invented. It’s time to get to work.
The last several years have brought massive change – and opportunity – for the retail industry. Gone are the days when retailers chose when, where and what to sell; now consumers are in the driver’s seat, and retailers are being challenged to figure how to best engage with them. Additionally, they’re juggling pressures driven by industry trends such as the drive for more sustainability in retail, the proliferation of data, increased energy around “anywhere commerce,” the need to better equip store associates with technology and much more. But change often accelerates innovation, and because of this I believe that there’s never been a more exciting time to be a retailer at the intersection of retail and technology.
Microsoft continues to innovate side by side with retailers to help them embrace their biggest opportunities and enable intelligent retail by empowering businesses to take control of their own digital evolution. Our solutions enable retailers to transform across all parts of their business – from how they better understand their customers and empower employees, to putting the right technology in place to deliver an intelligent supply chain and ultimately reimagine their businesses. In the last year and a half, we’ve established ourselves as a trusted partner to some of the world’s largest retailers such as Walmart, Kroger and Walgreens Boots Alliance, among others. And we’ve empowered their transformation by providing the platforms on which to build innovation for all parts of their businesses.
We’ve learned a lot along the way both through our retail customers as well as our own physical retail presence about how technology can help this industry both embrace its biggest opportunities as well as tackle its biggest challenges. And today we’re sharing how our first-party innovations are helping to drive the future of intelligent retail across all parts of a retailer’s business.
Gaining a better understanding of your customers
If customers are the heart of the retail industry, data is the oxygen. Data has the potential to profoundly impact every single aspect of retailers’ businesses, including – and perhaps most importantly – how they respond to customer demands with differentiated and unique experiences.
We’re helping retailers surface actionable customer insights with data solutions like Azure Synapse Analytics, which helps retailers not only analyze vast amounts of data, but also apply machine learning to quickly surface insights that can drive immediate impact for their businesses, and Dynamics 365 Customer Insights, which helps maximize customer lifetime value by surfacing a 360-degree view of the customer to drive personalized engagements at scale. This means that even the most complex retailers, with thousands of suppliers in their end-to-end supply chain and millions of item-store combinations, can quickly make the decisions needed to not only run their businesses most efficiently but also delight customers in the process.
And with Dynamics 365 Connected Store, retailers like Marks & Spencer – which is piloting the solution in a store in London – can generate data within its physical stores that produces the same kind of actionable business insights as it gets from its digital storefronts. M&S is achieving this by analyzing data from smart devices such as video cameras and IoT sensors to provide real-time and predictive insights on everything from the current length of the checkout line to the traffic around endcap product displays to help associates make better decisions. We’re welcoming new retail customers into our Connected Store preview every day, so sign up here to request access.
One of the customer demands becoming more and more evident as retailers reason over their data is the desire for a seamless shopping experience regardless of where, when and how they choose to buy. We’ve invested in helping retailers bridge embrace this concept of commerce anywhere (aCommerce) with Dynamics 365 Commerce, the evolution of Dynamics 365 Retail and a true multi-channel solution that transforms the customer experience by unifying retailers’ back-office, in-store, call center and e-commerce experiences. One experience across all channels – that’s what customers are demanding today. The result? More personalized engagement with customers, employees who are better equipped to provide the best customer experience possible and deep insights to empower advanced decision making across every piece of a retailer’s business. I’m excited to announce that Dynamics 365 Commerce, currently in preview, with become generally available to our retail customers on Feb. 3.
Empowering employees with the tools they need to better serve customers
Despite the rise of e-commerce over the past couple of decades, we know that most shopping – across generations even – still happens in person. Research from Forbes Insights shows us that 60 percent of consumers still prefer to shop in physical retail environments, and this number stays fairly consistent across generations. This means that first-line workers are still one of a retailer’s most valuable assets – many times, they are the first impression a shopper gets of your brand and they play a significant role in customer acquisition and retention.
Retail associates need modern tools and experiences in order to remain productive and deliver the best customer service possible while on the store floor. With Microsoft 365, the world’s productivity cloud, and new first-line capabilities coming to Microsoft Teams later this year, we are in a unique position to help this often-overlooked part of the workforce get their jobs done. Today I’m thrilled to announce that we’re adding even more productivity and collaboration value into Teams, including task targeting, publishing and reporting, new workforce management integrations to streamline shift management and a new Walkie Talkie feature. By building push-to-talk functionality into Teams, we’re helping our retail customers turn company-owned smartphones and tablets into a secure walkie talkie, extending the range of traditional walkie-talkie communication and streamlining licensing and provisioning for retailers’ IT staff.
Finally, as we extend modern tools and experiences across the first-line workforce, we know that we need to make it easy for IT to manage and help enable a secure and compliant experience for all employees. I’m excited to disclose enhanced identity and access management capabilities – such as shared device sign-out for Android and inbound provisioning from leading workforce management providers such as SAP SuccessFactors and Workday – that will make onboarding retail associates and operating shared devices more secure and scalable, something our retail customers have been asking us to add for some time now. And, later this quarter, retailers will be able to enable SMS sign-in to Microsoft 365 and custom applications for retail workers and empower their store managers with delegated user management capabilities, making it easier to reset passwords and manage workers’ identities without additional demand on IT staff.
Infusing more intelligence into the supply chain
A retailer’s supply chain can play a major role in customer satisfaction – outdated supply chain processes can mean delays, unfulfilled orders and more. By connecting devices and collecting data, retailers can analyze that information to create new insights and ultimately a truly intelligent supply chain that enables them to provide the best service possible to customers. This is the Internet of Things (IoT), and as IoT becomes more mainstream it continues to be a huge driver of data for retailers today. In fact, our IoT Signals for Retail study found that 92 percent of retailers have adopted IoT and are using it in various stages of trials and deployments, with the most common IoT scenarios being driving store analytics (57 percent), supply chain optimization (48 percent) and security and loss prevention (46 percent and 45 percent, respectively).
We’re making building and deploying IoT applications in retail environments easier than ever with new Azure IoT Central solution templates that help retailers simplify IoT deployments to start driving immediate impact. Today, the Azure IoT Central Micro Fulfilment Center template joins five existing retail-focused templates – including for scenarios across connected logistics, digital distribution centers, in-store analytics and smart inventory management – to help retailers more easily optimize their fulfilment processes through a managed service that includes everything a retailer needs to get started today.
Reimagining retail business models and customer experiences
The success of today’s retailers’ physical store environments rests on their ability to disrupt themselves and their own status quo by pushing into new business models and providing new experiences and formats that engage customers and keep them coming back for more.
We understand this better than most technology vendors, because we’re continuing to move through this same transformation journey with our own Microsoft retail stores. Over the past several years, we’ve digitally transformed and extended our physical retail store strategy from an exclusively consumer storefront to a commerce engine that connects with all customers – from commercial enterprises to small businesses and consumers. Partnering with enterprise sales, we’re offering new experiences in and through our stores targeted toward our enterprise customers such as J. Crew, Office Depot and Marks & Spencer. Our stores are also at the forefront of adopting new Microsoft technology across cloud, predictive analytics, machine learning, cognitive services and more to solve our most complex challenges – and we’re learning from those experiences to ultimately pass those lessons along to our customers. And of course, that’s a two-way street – we’re also learning from our retail customers to inform how we manage and operate our stores too, which is indicative of the true partnerships we strive to establish with every retailer we work with.
While reimagining retail can lead to the kind of business transformation we’ve seen in our own store, it can take different forms as well, such as how retailers are tapping into new revenue streams and digitizing their own physical stores to drive new customer and employee experiences.
Microsoft PromoteIQ is an end-to-end commerce marketing platform enabling retailers to create a new critical growth engine for their businesses through at-scale vendor marketing programs. With Microsoft PromoteIQ, retailers can empower their brand partners with powerful marketing technology to natively promote products to in-market shoppers, reaching them at the right time to increase digital sales – all supported by a deep analytics suite to deliver impactful audience insights. And now, thanks to the integration with Microsoft Advertising, we can offer our retailer partners a powerful new source of incremental demand for their programs. Take Home Depot, for example. While you may expect the world’s largest home improvement retailer to do most of its business in person, HomeDepot.com is the fifth largest e-commerce site in the U.S. Consequently, the company needed a solution to help it maximize the nearly 170 million visitors per month its site was seeing by integrating an end-to-end commerce marketing platform with capabilities to manage and scale its vendor-funded digital marketing. Since deploying PromoteIQ, Home Depot has seen very positive results, including double-digit sales growth for promoted products through this program.
Of course, reaching customers at the right time is only half the equation; a retailer must also be able to deliver on what that customer is looking for. In fact, 80 percent of shoppers will abandon a site that produces poor search results. And that’s why we’re investing in this critical piece of digital commerce – product search. Microsoft Bing for Commerce is an intelligent artificial intelligence-driven solution for product search, personalization and product recommendations that gives retailers the power to meet today’s shopper expectations and grow revenue through more relevant and customized results that drive conversion. We’re also enabling our retailers to meet customers where and how they want to shop through visual search innovation included in Bing for Commerce, to help capture sales from new, emerging shopping behaviors.
Connect with us at NRF
Microsoft will have a significant presence at NRF once again this year, headlined by our own CEO Satya Nadella’s keynote session to open the show. You won’t want to miss hearing his perspective on business and cultural transformation, and how our retail customers are putting our technology into action to reimagine their businesses. And if you’re attending the show, make sure you stop by our Microsoft booth (#4501) to see how we’re bringing intelligent retail to life across all parts of a retailer’s business and how you can achieve the same – we’re offering complimentary envisioning workshops, where retailers will have an opportunity to work directly with us to create a shared vision and digital road map to unlock a future of endless possibilities.
You’re also invited to attend one of our sessions on the show floor – I’m leading a Big Ideas session where I’ll share my thoughts on the increasing importance of sustainability to the industry and how technology can help accelerate retailers’ sustainability visions. In addition, my colleagues Alysa Taylor, corporate vice president for Microsoft Business Applications and Global Industry, and Emma Williams, corporate vice president of Microsoft Office Vertical Solutions, and I will participate in the FQ Lounge at NRF along with many other “women rocking retail” for panel discussions about diversity and inclusion in the retail industry (we’re proud to be a sponsor of this space as well). And of course, visit Microsoft’s NRF page to keep up to date on the latest developments.