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Why Microsoft's 'Power Platform' is one of its biggest bets for 2019 and beyond

'Microsoft 365, Dynamics 365, and Power platform on top of what we’re doing with Azure is the core of what we are doing as a company,' says CEO Satya Nadella.

For the past few years, Microsoft has been developing and rolling out pieces of what it now calls its "Power Platform" in relative isolation. Power BI, its business analytics platform; Flow, its workflow-automation engine; and PowerApps, its associated app-development platform -- together known as the Power Platform -- has been mostly the domain of Dynamics 365 users.

This is about to change, starting this year. Microsoft is planning a big push to make the Power Platform its unified extensibility framework across not just Dynamics ERP/CRM, but also Microsoft 365 -- its Windows 10, Office 365 and Enterprise Mobility + Security subscription bundle.

Microsoft CEO Satya Nadella explained the latest Power Platform positioning to a select group of journalists and analysts earlier this week on its Redmond campus. (I read his remarks for $10, the cost of obtaining a transcript available through a one-time payment for The Stratechery newsletter.)

"Microsoft 365, Dynamics 365, and Power platform on top of what we're doing with Azure is the core of what we are doing as a company viz a viz I would say our commercial customers, businesses of all sizes, whether it's small business, large business, whether it's in an emerging market or in a developed market," Nadella told attendees.

"This Power Platform is the extensibility model for Microsoft 365, it's the extensibility model for Dynamics 365, and by the way, it can integrate with Salesforce, it can integrate with Workday, it can integrate with SAP or what have you," he explained.

How will the company try to get more customers to bite on this concept? Microsoft's pitch is that instead of developing a business model that starts with ERP and CRM (a k a systems of record and systems of engagement), modern businesses are starting with systems of observation and intelligence (or, in Microsoft product terms, IoT and AI -- intelligent edge and intelligent cloud). Yes, it always does come back to that intelligent cloud/intelligent edge thing for Microsoft.

In the words of Microsoft Corporate Vice President of Business Applications James Phillips, who also spoke to journalists this week:

"There's a fundamental change occurring. That fundamental change is that data is now coming first. That sensor in the piece of equipment that you sold to a consumer or in the factory is sending a continuous stream of information about how it's being used, about it's health, that data lands in the cloud, an anomaly detection model can predict it's going to break, not that it has broken, but that it's on its way to trouble, that can proactively result in a field service call and keep the customer up and running."

Phillips continued: "So the systems that you need, the business applications that one needs to enable that very proactive versus extremely reactive model of business are fundamentally different. You don't start from a screen somebody types into, you start from data arriving. That is a complete flip which sort of turns it all on its head."

Part of this Power Platform is Microsoft's Common Data Model (CDM), a definition of standard entities that represent commonly used concepts and activities across business and application domains. CDM is at the heart of the Open Data Initiative which Microsoft, Adobe and SAP announced (with next-to-no specifics) at Ignite last year. The high-level goal of ODI is to integrate CRM, ERP, commerce, sales, product usage and other related data into a single view that works across devices.

HoloLens also indirectly fits in with this expansion of the Power Platform's reach, as well. Microsoft is working to position HoloLens as a firstline-worker-focused device. (Firstline workers are those "deskless" workers who work in front-line jobs in retail, customer service, manufacturing, hospitality and other verticals.) Microsoft's Dynamics 365 Remote Assist and Layout applications were early examples of this targeting.

Nadella told journalists this week that he had learned that "this first standard issue of a computer for some of the first-line workers will be HoloLens.... It is because the productivity gains for service workers is such that it makes a lot of economic sense where they did not even give them a phone but they're happy to give them a HoloLens." 

Microsoft is set to make available on January 21 its release notes for the coming April 2019 Dynamics 365 and Power Platform updates. It'll be interesting to see what's coming in this first of two annual updates for the platform.

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