- Microsoft New Product(s):
- The Best Technology Does Not Always Win:
- Innovation Stack:
Microsoft New Product(s):
Microsoft just in the past few hours have released a competitive solution, namely the Supply Chain Management Platform. “Microsoft Supply Chain Platform harmonizes the data estate, introduces “command centre” for enterprise supply chain.”
Microsoft seems to have mastered what I call the “strength of the strategy”. Namely, the ability to distribute, and market a product successfully, despite that product perhaps being inferior in capabilities.
As will be discussed later, the best technology does not always win. In fact, history proves that strength of the strategy is far more beneficial.
When looking at recent product announcements by Microsoft, many of these new releases follow a similar trend: copying a product, slightly changing the product, and using mass distribution tactics to sell this product.
“Monday, Microsoft Corp. announced the Microsoft Supply Chain Platform, which helps organizations maximize their supply chain data estate investment with an open approach, bringing the best of Microsoft AI, collaboration, low-code, security and SaaS applications in a composable platform.”
“The company also announced the preview of Microsoft Supply Chain Center, a ready-made command center for supply chain visibility and transformation and part of the Microsoft Supply Chain Platform. Supply Chain Center is designed to work natively with an organization’s supply chain data and applications, with built-in collaboration, supply and demand insights, and order management.”
“Businesses are dealing with petabytes of data spread across legacy systems, ERP, supply chain management and point solutions, resulting in a fragmented view of the supply chain,” said Charles Lamanna, corporate vice president, Microsoft Business Applications and Platform. “Supply chain agility and resilience are directly tied to how well organizations connect and orchestrate their data across all relevant systems. The Microsoft Supply Chain Platform and Supply Chain Center enable organizations to make the most of their existing investments to gain insights and act quickly.”
“Supply chain solutions are more critical than ever. Our early assessment of the Microsoft Supply Chain Platform and Supply Chain Center is that the company has put its technology, applications and resources together in a way that will serve its customer base well in a wide swath of IT and operations environments, offering flexibility for diverse IT environments and continuous agility for transformation into the future,” said Daniel Newman, founding partner and principal analyst of Futurum Research.”
“With today’s announcement, we are making it easier for customers to realize the value of the Microsoft Cloud for their supply chain. The Microsoft Supply Chain Platform provides the building blocks across Azure, Dynamics 365, Microsoft Teams and Power Platform for customers to develop or independently adopt capabilities for their supply chain needs. With Dataverse, customers can create thousands of connectors to gain visibility across supply chain, develop custom workflows with low-code solutions in Power Platform, and securely collaborate internally and externally through the power of Teams. With tools and processes that drive positive impact, the platform can enable organizations to gain deeper insights and minimize the carbon impact of their organization and supply chain.”
“At the core of the Supply Chain Platform is the Microsoft Supply Chain Center, now available in preview, which provides a command center experience for practitioners to harmonize data from across existing infrastructure supply chain systems, such as data from Dynamics 365, and other ERP providers, including SAP and Oracle, along with standalone supply chain systems. Data Manager in Supply Chain Center enables data ingestion and orchestration to provide visibility across the supply chain and drive action back into systems of execution. During preview, our launch partners C.H. Robinson, FedEx, FourKites and Overhaul will offer native experiences within Supply Chain Center.”
Other Competitive Platforms:
This is not the first time Microsoft have released a competitive product. In fact, solely just a few months ago, there was another competitive product launched by Microsoft, in which directly competes with Palantir.
“To help address the fragmentation that exists today between databases, analytics and governance, and enable organizations to unlock these new capabilities, we shared several exciting announcements today at Microsoft Build that demonstrate our continued innovation and investment in the data products our customers have come to know and trust, which will enable our customers to achieve the kind of sustained agility that allows them to pivot and adapt in real-time, add layers of intelligence to their applications, unlock fast and predictive insights, and govern their data—wherever it resides.”
Microsoft are building a platform to aid the fragmentation between databases, analytics, and governance via the “intelligent data platform.”
The Best Technology Does Not Always Win:
First intuition may assume that these breakthroughs within innovation and technologies will surpass trivial changes within strategies. But, history actually tells us the opposite.
The reason as to why a change in strategy can be fundamental towards the success of the company, is because changes in strategies often are operating within the complex behaviours of buyers, sellers and markets.
Having the best software, or the best search algorithm alone is not sufficient. One must couple this with intelligent and complex changes within strategies in order to enable success.
To put this simply, going bigger, better, and more powerful with each iteration is not sufficient. In fact, it can be detrimental. This is why leading companies such as Pan Am, and Polaroid have failed despite being prior industry leaders for such time. These leading companies failed because, they kept going bigger, better, and more. This insistence led to products in which were scientific breakthroughs, and aesthetic beauties, however failed to appeal to the commercial segment. Why?
A similar fate occurred for Polaroid back in the 1900s. The company was at the forefront of technology, creating breakthrough after breakthrough. But, similarly to Pan Am, something suddenly changed, and the company failed.
Edwin Land, the CEO at the time, began with a hidden property of light. He built an empire, in which innovations led to growing franchises, that then fed more loonshots. This cycle continued for many years.
Edwin Land built the Polaroid Corporation by inventing a new remarkable use for this hidden property of light.
Land got his first major deal with the military, in whom snapped up the polarized products and innovations to eliminate glare from the sun. This was part of the invention that led to the domination in the camera industry soon after.
The Navy ordered millions of these products from the company in order to aid the ability to sight aircrafts, tanks, and surfaced submarines. The Army and Navy ordered millions of polarised goggles.
Today if you are using a laptop or a smartphone to watch something on an LCD screen, you are using a variation of Land’s innovation. This should give perspective as to how vital Edwin Land’s inventions have been for the advancements in technologies.
Land translated this technology that was first used within the Navy into 3D glasses for cinemas and photography, film photography, and other vital breakthroughs such as the instant polaroid. The media labelled the array of innovations as some of “the greatest advancements in the history of photography”.
The sales for Polaroid went from just under $1.5M in 1948, to $1.4B in 1978. And, for 30 years Polaroid dominated the photography segment, just like Pan Am dominated the international travel sector.
Both companies delivered innovation after innovation, and breakthrough after breakthrough. The wheel kept turning, the franchise kept growing, and the loonshots kept coming.
For Polaroid, their reign ended in late 1978. The crash was sudden, dramatic, and very unexpected. This was after the launch of the new product, namely the world’s first Polavision player that could product instant video. Even today, one must appreciate this product. The fact that back in the 1970s, Polaroid invented the use of a video recorder, that within 90 seconds could appear on a TV screen.
The media labelled the new product as “magical”. Technology magazines stated that: “the company that seems to specialise within turning the impossible into real hardware have done it again”. Others noted that this new product was the “highlight of the company”.
You may at first assume that this radical new innovation would have inevitably resulted into drastic sales. But, it did not. In fact, within a year the product was dead. Customer were not buying it. Despite the resolution and quality being superior, and the aesthetics of the products far outpacing those of other products. customers were not interested.
Customers did not need the extra resolution for home movies. And, customers deemed that the elegant design could not overcome the convenience of other products. Other video tapes, such as the Super 8 Film, were easier, cheaper and erasable.
Wall Street analysts stated that: “this is a product that has much more scientific and aesthetic appeal, than commercial significance”.
Soon after, the company were losing money rapidly. A door of revolving CEOs came through, but it was too late. The company found themselves in a dire situation, solely based on the obsession of a leader for newer, bigger, better and more, whilst totally disregarding other vital aspects of the company.
The ideology of a culmination stack is a philosophy culminating of a series of interlocking inventions and micro-changes, that thereby result in mass improvements over time. This philosophy stemmed inspiration from Square’s Founder, McKelvey, when Amazon went face-to-face with Square in 2014. Square managed to out-beat Amazon, despite the fact that company was much smaller, had less capital, and inferior talent. We have tweaked the original thesis of the innovation stack to better fit the points we are making.
From an investment perspective, there is evidence that this philosophy of a culmination stack has utility, and thereby can be applied to all organisations. We believe, those organisations that follow the philosophy can produce exponential growth.
- Copying does not result in a transformational change. Often, those organisations that are innovative and disruptive create a new industry, or a product that previously was deemed as inconceivable.
- Small micro-changes compound over time, and thereby lead to a superior product.
- Concentration over diversification of resources. Often, a viable reason as to why innovative start-ups succeed over large corporations when competing is due to the sole concentration of resources and time on one venture, in comparison to spreading too thinly over a range of areas.
Examples Of Culmination Stack:
The culmination stack is evidently seen across a range of start-ups, and youthful companies. Most clearly, perhaps is the case of Spotify. Spotify, being a leader in the audio space, actually has a few big competitors on their tail. However, somehow, despite Spotify being a much smaller company than YouTube, Amazon, & Apple, Spotify still has managed to remain leader in the field of audio.
The reason as to why is likely based on the notion of the culmination stack.
In other words, the small micro-changes, in which compound over time, and thereby lead to a superior product. Furthermore, these small iterations, combined with a sole focus on one domain, allows true nuance identification. And, to finalise this notion, in accordance with the idea of the innovation stack, “copying does not result in a transformational change.”
Thus, over a long-time frame, this is why Spotify have managed to outcompete larger organisations, despite their smaller capital availability, and limited levels of talent.