Microsoft 365 Challenges and Market Trends

What we find when we talk to our customers is that everybody is hybrid in some way or another. Even if you're fully in the cloud, odds are good that you've got hybrid identity management. But most of us aren't to that point. We may have hybrid Identity management, but also have other hybrid workloads, whether that's SharePoint or Exchange or line of business applications that we need to keep access to. Then, at the same time, we have some workloads that are cloud-only like Teams or OneDrive that have to be managed too. The problem is trying to manage both sides of the hybrid Grand Canyon is more challenging than trying to manage either side alone. To counterbalance against, that we have some trends that we see broadly in the market that come into play that customers find challenging too. One is that the ongoing economic effects of the pandemic don't seem to have affected mergers and acquisitions very much. We see a steady drumbeat of M&A activity. And many customers find that that's something that they haven't planned for because right up until you get the letter telling you you're being acquired, you may not have a good understanding that your company is an acquisition target. On the other hand, if you are an acquirer, as many companies are, and you seek to drive growth through acquisition, you're always going to be looking for the next target and your timing is going to be dictated by what comes on the market and what your capital picture looks like. The attack surface of Microsoft 365 as a whole is growing. I need to explain that because I don't want it to sound as though Microsoft is just willy-nilly causing security problems for people. In fact, the opposite is true. They put a huge investment into hardening the security of their services. But it's also true that they put huge effort into spinning out new services all the time. So whereas someone who was administering a Microsoft 365 environment five years ago had to worry mostly about OneDrive, SharePoint, Exchange, now guess what? Now we also have Teams, we have Planner, we have Power BI. We have other new workloads or new capabilities that are coming out all the time. Microsoft, if you look at the statistical data that they release about the number of attacks against their Identity and cloud platforms, the numbers are just mind-boggling. But what we also see is that many of the most successful attacks exploit the properties of hybrid environments. So every time you see in the news that someone has been successfully exploited by a ransomware attacker, the odds are very good that they're running in a hybrid environment, but their cloud environment is less likely to be affected because of that security work that Microsoft has done. Teams sprawl in particular, but clouds sprawl more generally. It's just an ongoing problem. If you buy into Microsoft's promise that Teams is an open collaborative environment where people can get in and do the work they need to do and customize or tailor the environment to their needs, then you'll find that number one it's true, but number two, a lot of that tailoring results in far-flung data or data that you can't effectively see and manage. So this sprawl of data and services brings benefits in the sense that you can do things you could never do before, but it also has some costs in the sense that there are things now that people have done that you need to keep track of, monitor, report on, and secure. Finally, the last challenge that people run into in the hybrid world is an ongoing challenge. Only 37% of the customers that we talked to report that they were able to measure the return on investment for their investment in hybrid work through Microsoft's platform. Now think about what that means, it doesn't mean that only 37% saw a return. It means that 37% were able to report that they had a return and they knew what it was. So the other-- what was that-- 63% either don't know what return they got in their investment, which is bad, or don't think they got one, which is also bad. So what that means is the majority of customers need help understanding are people using this expensive thing that I pay Microsoft for? If they are using it, are the ways that they can use it so that I get more business value out of it? And then, third, are there other things that I should be looking at tell me if people are effectively using the platform and getting business value out of it?