Disclosure: Microsoft is a client of the author.
This week, Microsoft gave a presentation on its "Microsoft Cloud For Sustainability" effort, which should benefit companies trying to get involved in efforts to reverse climate change and pollution. Companies are looking to do more in this area as customers increasingly favor vendors with a strong focus on ESG (environmental, social and governance) values. The environmental part is currently in the spotlight as it is in the public eye, with climate change concerns driving vendor and solution choices.
But building a monitoring and reporting ecosystem is not trivial, so being able to build on the successes of others is a boon to those attempting this very difficult task.
As much as I'm interested in this Cloud for Sustainability effort, it's the vertical focus and maturation of Azure that I find interesting. Because it represents the next level of cloud maturity, where tools evolve to focus on specific needs to positively impact productivity.
The Microsoft Cloud for Sustainability effort may have much broader implications for the future of the cloud.
Microsoft cloud for sustainability
Durability is certainly important, but achieving it is not easy. Not only do you need to keep track of the pollutants you generate, but you also need to make sure your suppliers do too. (The importance of tracking the entire supply chain has grown because a company's good environmental reputation can be destroyed if it is connected to just one visible polluting supplier.)
The data acquisition, ingestion, computation, and reporting requirements for an effort like this are enormous. Companies have “learned by doing” rather than learning from each other, making the overall effort longer and more difficult than it should be.
By creating a vertically focused service, Microsoft is able to capture best practices, create scalable models, and provide targeted support that can dramatically reduce the time it takes for a company to understand its supply chain and the amount of waste and pollutants it is responsible for. .
By concentrating their efforts, customers can obtain a set of labor-saving tools specially designed to ensure durability. Although this effort initially focused on carbon emissions, it will evolve over time to support water and other waste mitigation. Beyond better sustainability tracking, it also simplifies ESG reporting, at least when it comes to carbon emissions, which increases reporting accuracy and reduces both the work required and the risk of misreporting.
Vertical segmentation: the present of the cloud
Microsoft has focused on developing these cloud efforts for healthcare, manufacturing, nonprofits, retail, and enterprises. Each provides a unique set of solutions that improve over time and help the related effort accelerate efforts better and cheaper than if a company built a solution from scratch.
And I don't think that's the end of this evolution.
Next Step: Custom Targeted Clouds
At present, these vertical stresses are largely inconspicuous. But over time, I expect the components to become more modular. Therefore, a company could choose the components that currently reside in a vertical zone and use them for their own custom solution.
For example, intensive partner tracking in the Sustainability Cloud would also benefit retail. And enterprise cloud and retail cloud users will likely want enterprise cloud modules, while healthcare operations may also want business and sustainability modules.
Creating synergies across verticals, and using Microsoft's AI capabilities to automate repetitive tasks and combine modules with projects, would dramatically increase the overall benefit of these linked resources.
What Microsoft has now is the foundation for future AI-powered solutions that could be vertically independent and automatically modified to best fit each unique use case. I think Microsoft is building something much more compelling than a vertical approach. Lay the groundwork for an entirely new cloud experience that automatically adapts to the industry, business, and project at hand.
In short, the cloud is still in its infancy and, like the Internet, it is very different now than it was not too long ago. It will undoubtedly undergo massive changes before reaching full maturity.
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