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CASE STUDY: How Satya Nadella overhauled Microsoft's cutthroat culture and turned it into a trillion-dollar 'growth mindset' company
Lehtikuva, Markku Ulander/AP Photo; Yuri Gripas/Reuters; Fabrizio Bensch/Reuters; Ruobing Su/Business Insider
Satya Nadella is the CEO of Microsoft. Steve Ballmer and Bill Gates are the former CEOs.
- Microsoft is a trillion-dollar company thanks largely to a culture shift led by Satya Nadella.
- Since Nadella became CEO in 2014, he's encouraged the entire company to adopt a growth mindset, or the belief that skills are developed through hard work and challenges are opportunities to learn.
- Before Nadella took over, Microsoft was characterized by competition between teams and between individual employees.
- Now, in keeping with a growth mindset, Microsoft evaluates employees' performance based partly on how much they helped their colleagues succeed. The company also looks to learn from its former rivals in the tech industry.
- Business Insider spoke with a range of company insiders and organizational researchers to get the inside story on how to change the culture of a 150,000+ employee software giant.
- Microsoft is a case study in how a growth-mindset culture can help companies succeed in the future economy.
- Click here for more BI Prime content.
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A cartoonist once drew an illustration depicting Microsoft's organizational chart as warring factions.
Take a look and you'll see three separate gangs: one blue, one green, one yellow. The gangs are assembled in pyramid-shaped hierarchies, with one leader at the top, two or three deputies at the next level, and so on.
A hand sticks out from each pyramid, pointing a gun directly at one of the others. It's clear. This is war.
And then Satya Nadella became CEO.
Nadella described the era of warring gangs in his 2017 memoir-manifesto, " Hit Refresh :" "Innovation was being replaced by bureaucracy. Teamwork was being replaced by internal politics. We were falling behind."
That particular cartoon - drawn in 2011 by a Google employee named Manu Cornet , no less - made changing Microsoft's culture Nadella's No. 1 goal as CEO.
"As a 24-year veteran of Microsoft, a consummate insider, the caricature really bothered me. But what upset me more was that our own people just accepted it," Nadella wrote. "When I was named Microsoft's third CEO in February 2014, I told employees that renewing our company's culture would be my highest priority."
Since becoming CEO, Nadella has been credited with a grand reinvention of Microsoft, exemplified by its market value exceeding $1 trillion, one of just a handful in history to hit that mark. When Nadella first took over, its market value was around $300 billion. The company has shifted from a has-been to a cloud powerhouse.
One of the keys to this transformation is a psychological concept that's become a mantra at Nadella's Microsoft: growth mindset .
Microsoft has traded a fixed mindset for a growth mindset
Growth mindset describes the belief that skills are developed through hard work and that challenges are opportunities to learn. Fixed mindset, on the other hand, refers to the belief that talent is innate and that struggling is a sign of failure. Research on the difference between growth and fixed mindset - and how they predict success - was pioneered by Stanford's Carol Dweck.
Early on in her career as a developmental psychologist, Dweck visited children at school and presented them with a series of increasingly difficult puzzles. Her goal was to better understand how people cope with failure. Some students, she found, weren't fazed by it.
In her 2006 book, " Mindset ," she recalls one 10-year-old boy who "pulled up his chair, rubbed his hands together, smacked his lips, and cried out, 'I love a challenge!'"
Dweck would spend the next five decades trying to figure out the difference between people who relish a good challenge and those who fear failure. Scores of studies published under her name suggest that people who see intelligence and abilities as learnable are more successful, personally and professionally, than people who think they're static.
Recently, Dweck coauthored a study that drew a link between growth mindset and organizational success . Employees who think their companies have a fixed mindset, the study found, interpret the company's culture as less collaborative, less ethical, and less willing to take risks than employees who think their companies have a growth mindset.
Given the rapid pace of technological change , these research findings are hyper-relevant. Across industries, adopting a growth mindset may be the only way to survive, and certainly the only way to thrive. When neither executives nor rank-and-file employees can predict what their jobs will look like next week, they need to embrace the resulting vulnerability, and get excited about learning.
Plenty of companies, in industries from telecommunications to early education, talk about cultivating a growth mindset , and about looking for job candidates who have it . But Microsoft is perhaps the most powerful example of an organization that has used growth mindset, and the psychology behind it, to rebuild its culture.
In many ways, fixed mindset and growth mindset can describe Microsoft before and after Nadella.
Nadella has encouraged Microsoft employees to be 'learn-it-alls' instead of 'know-it-alls'
Gates' successor, Steve Ballmer, also known for an explosive temper, later presided over the atmosphere depicted in that cartoon Nadella was determined to address. Ballmer was known for cultivating a culture in which Microsoft teams warred with each other, as previously reported by Business Insider .
Nadella, who joined Microsoft as an engineer in 1992, came up in this culture, before becoming CEO in early 2014.
By that point, the company's bid to compete in the smartphone market through the purchase of Nokia was proving to be a burden and would lead it to write off nearly the entire $7.6 billion acquisition price. The personal computer market was shrinking, leading to declines in Microsoft's flagship Windows operating system business, and the Xbox One console's poorly received launch made it a punchline.
Microsoft's history as a tech-industry pioneer wouldn't help the company compete, Nadella wrote in an email to employees on his first day as CEO. The company needed a change in mindset.
"Our industry does not respect tradition - it only respects innovation," Nadella wrote on Feb. 4, 2014, in a memo to employees days after taking on the CEO role. "Every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this."
Nadella's leadership philosophy evolved into the adoption of a growth mindset. He asked employees to be "learn-it-alls," not "know-it-alls," and promoted collaboration inside and outside the organization. Employees are now evaluated partly on how much they've helped others on their team.
Microsoft introduced a new performance-management framework based on growth mindset
With any company culture shift, executives run the risk of promoting jargon more than action, and of HR representatives being the only ones who know there's a culture change underway.
Microsoft has tried to avoid that fate, not only by training its employees on the psychology of growth mindset, but also by embedding the concept into its daily work flow.
Prompts to adopt a growth mindset appear on posters throughout Microsoft's campuses ( something at which employees sometimes poke fun ). At the start of a meeting, a manager might remind colleagues to approach an issue with a growth mindset.
And in one of the most significant manifestations of growth mindset, Microsoft has eliminated stack ranking .
Stack ranking was famously used by Jack Welch when he was CEO of General Electric. Ballmer used the system at Microsoft to evaluate employees, although he did start phasing it out prior to his departure. Microsoft managers had to rank their employees from one to five in equal measure. Which meant that, no matter how good the employees were, some of them had to get the lowest ranking of a five.
Performance was defined in stack ranking as the quality of individual work, and that emphasis on individual performance was linked to fierce competition among Microsoft employees. It was also a barrier to Microsoft's innovation, since it facilitated a culture that rewarded a few standout team members and even gave employees incentive to hope their colleagues failed.
Microsoft leadership says its new system for evaluating employees instead rewards collaboration. Managers and employees meet often to discuss performance , in keeping with the general trend of companies nixing annual reviews and having managers regularly speak with employees about their work.
"What we really value is three dimensions," said Hogan , Microsoft's chief people officer. "One is your own individual impact, the second is how you contributed to others and others' success, and the third is how you leveraged the work of others."
To use Hogan's examples, maybe a more seasoned employee helped someone new to the team, or a software engineer built on another engineer's work instead of reinventing it.
Microsoft recently applied growth mindset to a new framework for managers : model, coach, care. That's a combination of setting a positive example for employees, helping the team adapt and learn, and investing in people's professional growth.
To measure the impact of these initiatives in real time, Microsoft emails employees with a different question every day asking how they're feeling about the company and its culture.
The shift from competition to collaboration might seem like it would be a breath of fresh air. And on the whole, it has been. But employees say it's presented its own challenges, too.
Nadella pushes Microsoft executives to take on stretch assignments
Adopting a growth mindset can be uncomfortable, he said.
"Growth mindset is a euphemism because it can feel pretty painful, like a jump into the abyss," he said. "You need to be able and willing to confront your own fixed mindset - the things that make you believe something can't work. It's painful to go through personally, but when you get past it, it's tremendously rewarding."
The transition has been edifying, both in terms of his personal growth - Lee was recently named to the National Academy of Medicine - and Microsoft's growth in the industry, as it establishes itself as a meaningful player in healthcare tech.
Microsoft now sees the business case for letting go of its rivalries with other tech giants
Under Ballmer, Microsoft was notorious for prioritizing its Windows operating system and Office productivity applications businesses over the rest of the company - at one point, it even canceled the Courier tablet, which would have been an early, future-looking competitor to Apple's iPad, because it may have undermined Windows.
Likewise, Microsoft once shunned Linux, a free open-source operating system once considered the biggest threat to Windows. Ballmer once called it a "cancer." But early on in Nadella's time as CEO, Microsoft changed tack and proclaimed, " Microsoft loves Linux ."
It wasn't just Microsoft being friendly. There was a strong business case for blurring boundaries. At the time, Microsoft said it realized its customers used both Windows and Linux, and saw providing support to both as a business opportunity on-premise and in the cloud. That would have been unthinkable in the Ballmer years, but it's proven to be a savvy business move: Microsoft recently hinted that Linux is more popular on its Azure cloud platform than Windows itself.
Microsoft's relationship with Salesforce has followed a similar trajectory. Whereas Ballmer had frequent and public bouts with Salesforce CEO Marc Benioff , Microsoft under Nadella put aside its rivalry with Salesforce - which competes directly with Microsoft's customer-relationship-management Dynamics 365 product - in order to ink a big cloud deal that was good for the company overall.
Nadella even invites leaders from companies across industries to Microsoft's CEO Summit so the executives can learn from each other. Ballmer, meanwhile, famously snatched an employee's iPhone at a company meeting and pretended to stomp on it.
Which is not to say Microsoft always plays nice in the Nadella era. The company last summer changed licensing agreements to raise prices - often significantly - when customers choose to run certain Microsoft software on rival clouds including Amazon Web Services or Google Cloud. And it's been trading public barbs with AWS over the still contested $10 billion Pentagon cloud contract.
The Trump administration awarded the contract to Microsoft over AWS, but Amazon is challenging the decision in court, alleging political interference. In February, a judge ruled that Microsoft must stop working on the contract.
The culture shift at Microsoft is an ongoing process
The beginning of Microsoft's culture shift was rocky.
In "Hit Refresh," Nadella recalls a Microsoft manager who announced in the early days, "Hey, Satya, I know these five people who don't have a growth mindset." Nadella writes, "The guy was just using growth mindset to find a new way to complain about others. That is not what we had in mind."
Even today, Microsoft leaders acknowledge that the culture change isn't over . Things have improved under Nadella, but the company culture is still far from perfect.
Diversity is an opportunity for improvement at Microsoft. Much like the larger technology industry , Microsoft still employs relatively few women and people of color in leadership and technical roles.
One of Nadella's biggest gaffes as CEO happened early on in his tenure, when he suggested women should not ask for raises, but rely on "faith" and "karma." After these comments, Nadella sent out an internal memo admitting to his mistake, explaining how he planned to learn from it, and stating his belief in "equal pay for equal work."
Nadella writes in "Hit Refresh" that in some ways he's glad to have belly-flopped in public. "It helped me confront an unconscious bias I didn't know I had," Nadella writes, "and it helped me find a new sense of empathy for the great women in my life and at my company."
Kevin Oakes, who runs a human-resources research company that helped Microsoft with its shift toward growth mindset, sees Nadella as an exemplar of a leader during a transition. That's largely because Nadella practices the growth mindset he preaches. In a presentation at Talent Connect, an annual conference organized by LinkedIn (which is owned by Microsoft), Oakes said Nadella has been Microsoft's "culture champion." Nadella understands that organizational culture is critical to the company's performance, Oakes said.
But today's Microsoft is still far from perfect. The positive contributions of growth mindset have not yet matched up with diversity and equity for Microsoft's workforce, according to some employees. Microsoft is the subject of a gender discrimination lawsuit still pending , which was denied class-action status by a federal judge. Employees have also openly alleged sexual harassment and discrimination.
The company released its first diversity and inclusion report in 2019 to track its progress in hiring - and retaining - a more diverse workforce. Results from that report showed that minorities in Microsoft's US offices earned $1.006 for every $1 white employees earned. A closer look reveals that white men still held more high-paying leadership positions than women or underrepresented minorities.
Meanwhile, Microsoft leadership still has some philosophical differences with employees as it relates to employee activism. Employee groups have protested Microsoft and Microsoft-owned GitHub's relationship with Immigration and Customs Enforcement, and more recently, some employees have said Microsoft's relationship with oil and gas companies is at odds with the company's goal to become "carbon negative" by 2030.
Microsoft has been equally vocal about diversity and inclusion within its customer base, building products that are accessible to as many users as possible. Ben Tamblyn, a 15-year company veteran and Microsoft's director of inclusive design, mentioned Xbox as a prime example. In 2018, Tamblyn helped oversee the release of the Xbox Adaptive Controller , which makes it easier for gamers who have limited mobility or physical impairments to play. (Interviews with Neal and Tamblyn were arranged by Microsoft's public-relations firm.)
Microsoft is a case study in growth mindset
Microsoft's culture shift, and its accompanying business turnaround, is already a case study in business schools and in reports from management consultancies and research centers . That makes sense to Mary Murphy, a professor of psychological and brain sciences at Indiana University and Dweck's co-author on the paper about growth mindsets within organizations.
Growth mindset is essential for innovation in the technology industry, Murphy said, where change rarely happens incrementally. Instead, there are big inflection points from which there's no return. Microsoft, Murphy added, needs to be on the "cutting edge" of growth mindset in order to stay relevant.
Nadella, for his part, has modeled a growth mindset from the top of the organization, not least in his response to his tone-deaf comments about gender and compensation. "I learned, and we will together use this learning to galvanize the company for positive change," Nadella wrote in the memo he sent apologizing for the comments. "We will make Microsoft an even better place to work and do great things."
Got a tip? Contact reporters Shana Lebowitz via email at [email protected] and Ashley Stewart via email at [email protected] , message her on Twitter @ashannstew, or send her a secure message through Signal at 425-344-8242 .
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How Microsoft Became Innovative Again
- Behnam Tabrizi
Inside the cultural turnaround that helped the tech giant think like a startup.
How did Microsoft revive its culture of innovation? For years, the company has been written off for playing defense on its position in the tech world. But, as signaled by its partnership with OpenAI and its challenge to Google’s search supremacy, it has gone back on the offense. The about face was, at its core, a cultural shift, driven by CEO Satya Nadella. He drove this by inviting an existential moment when he stepped into the job, reconsidering the company’s purpose. Then, he laid out strategic changes that would enable the company to think more like a startup, and made business decisions that committed the company to this new direction.
For years now, observers of tech have written off Microsoft as a 20th-century phenomenon, fat and happy from its Windows monopoly. The tech giant hadn’t had a breakthrough innovation in decades. It was rich enough to be a fast follower, but too big and bureaucratic to lead in any market. Jeff Bezos was known to gesture east and admonish his Amazon colleagues not to become complacent like their Seattle neighbor.
- BT Behnam Tabrizi has been teaching “Leading Organizational Transformation” at Stanford University’s Department of Management Science and Engineering and executive programs for more than 25 years. An expert in organizational and leadership transformation, he has helped thousands of CEOs and leaders plan, mobilize, and implement innovative transformational initiatives. He has written ten books, most recently Going on Offense : A Leader’s Playbook for Perpetual Innovation (IdeaPress Publishing, August 2023). TabriziBehnam
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Microsoft Marketing Strategy 2024: A Case Study
Microsoft’s marketing strategy has played a significant role in its rise to become a global tech giant. From humble beginnings in a small dorm room to dominating the digital marketplace , Microsoft has employed various tactics to reach and engage with its target audience. Through effective segmentation , competitor research , and a strong online presence, Microsoft has positioned itself as a leader in the industry.
Key Takeaways:
- Microsoft’s marketing strategy encompasses digital marketing tactics , online marketing campaigns , and social media marketing .
- The brand positions itself as a leader through target audience segmentation and competitor research .
- Market analysis and search engine optimization are key components of Microsoft’s marketing strategy.
- Content marketing plays a crucial role in engaging and connecting with customers.
- Microsoft’s marketing efforts are focused on innovation , customer-centricity , and global dominance .
The Journey of Microsoft: From Garage to Global Giant
Microsoft’s story began in 1975 when two visionary pioneers, Bill Gates and Paul Allen , set out on a mission to revolutionize the world of technology. Their humble beginnings started in a small dorm room at Harvard University , where they embarked on a journey that would ultimately shape the course of computing history.
In their early days, Gates and Allen sought to make their mark in the emerging field of personal computers. Their first significant breakthrough came when they secured a contract with MITS to develop a BASIC interpreter for their ground-breaking Altair 8800 computer. This pivotal moment marked the birth of Microsoft and laid the foundation for their future success.
Microsoft quickly became synonymous with innovation and technological advancement. As the technology revolution gained momentum, Microsoft continued to push boundaries and drive the industry forward. Their commitment to excellence and their passion for empowering individuals and businesses with cutting-edge software solutions propelled them to the forefront of the global tech scene.
Today, Microsoft is a household name and an undisputed leader in the technology industry. Their products, services, and innovations have had a profound impact on society, transforming the way we live, work, and connect with one another. With a presence in virtually every corner of the globe, Microsoft’s global influence is unparalleled.
Decoding Microsoft’s 4P Marketing Mix
Microsoft’s marketing strategy can be analyzed using the 4P marketing mix framework. Each of the 4Ps – product, price, place, and promotion – plays a crucial role in shaping Microsoft’s marketing efforts.
Product Marketing Strategy
Microsoft’s product marketing strategy focuses on innovative software solutions and hardware excellence. They continuously strive to develop cutting-edge technologies that meet the evolving needs of their customers. By offering a wide range of products, including the popular Windows operating system and Microsoft Office suite, Microsoft has established itself as a market leader in software solutions. Additionally, their hardware products , such as computers, laptops, tablets, Xbox gaming consoles, and smartphones, demonstrate their commitment to delivering high-quality devices to consumers.
Price Strategy
Microsoft employs diverse pricing models to cater to different customer segments. They understand that customers have varying needs and budgets, and they strive to offer products at different price points. This flexibility allows Microsoft to reach a broader audience and ensure that their products are accessible to users worldwide. Their pricing strategy includes freemium pricing , where users can access certain products for free and upgrade for additional features. They also employ other tactics, such as product line strategy , penetration pricing , price skimming , psychological pricing , and promotional pricing , to effectively position their offerings and engage with customers.
Place Strategy
To ensure global accessibility, Microsoft utilizes various distribution channels and partnerships. Customers can conveniently access Microsoft’s products and services through their official website , which serves as a central hub for purchases and information. In addition, Microsoft has a network of authorized distributors and retail stores that offer hands-on experiences with their products. This multi-channel approach enables Microsoft to reach customers around the world and provide seamless access to their solutions.
Promotion Strategy
Microsoft’s promotion strategy encompasses various tactics to build brand awareness and engage with their target audience. They have formed strategic partnerships with other industry leaders to expand their reach and influence. Additionally, Microsoft invests in educational initiatives to showcase the value of their products and services in different markets. Their robust digital marketing presence, including social media marketing , advertising , direct marketing , personal selling , and public relations , helps to create a strong brand image and establish meaningful connections with customers.
Through a comprehensive and well-executed 4P marketing mix strategy, Microsoft has successfully established itself as a global tech giant. By focusing on product innovation , employing flexible pricing strategies, ensuring global accessibility, and implementing effective promotion tactics, Microsoft continues to thrive in the competitive technology market.
Microsoft’s Marketing Strategies for Global Tech Supremacy
Microsoft has implemented a range of marketing strategies that have solidified its position as a global tech powerhouse. These strategies encompass segmentation , targeting , and positioning (STP) to tailor their marketing efforts to specific customer segments.
Through segmentation , Microsoft identifies distinct groups of customers with unique needs and characteristics. By understanding their target audience, Microsoft can create personalized marketing campaigns and deliver more relevant products and services.
Targeting is another crucial aspect of Microsoft’s marketing strategy. By focusing on specific customer segments, Microsoft can allocate its resources effectively, optimize its messaging, and enhance customer experiences. By understanding the needs, preferences, and aspirations of different customer groups, Microsoft is able to position itself as a leader within these segments.
Positioning is essential for any successful marketing strategy, and Microsoft excels in this aspect. Through a combination of market research , competitor analysis, and brand differentiation, Microsoft positions itself as a trusted and innovative provider of technology solutions. This positioning strategy reinforces its brand image and attracts customers who value reliability, quality, and cutting-edge advancements.
Customer relationship management (CRM) plays a vital role in Microsoft’s marketing strategy. Through its CRM strategy , Microsoft collects data to understand customer behavior, preferences, and purchase history. This valuable information allows Microsoft to personalize the customer experience, provide tailored recommendations, and build lasting relationships with its customers.
To further strengthen its brand presence and engage with its target audience, Microsoft actively participates in industry events and strategic sponsorships. By attending these events, Microsoft showcases its products and innovations to key stakeholders, industry experts, and potential customers. Strategic sponsorships enable Microsoft to align its brand with relevant initiatives, enhance its visibility, and position itself as a thought leader in the technology industry.
Microsoft’s Most Valuable Professional (MVP) initiative is another component of its marketing strategy that drives product adoption and advocacy. Through this program, Microsoft recognizes exceptional individuals within the tech community who demonstrate expertise and passion for Microsoft’s technologies. The MVP initiative not only encourages product adoption but also fosters a community of brand advocates who actively promote Microsoft’s products and solutions.
Overall, Microsoft’s marketing strategies encompass segmentation, targeting , positioning, CRM, industry events, sponsorships, and the MVP initiative . By embracing these strategies, Microsoft has successfully established itself as a leader in the global tech landscape, driving innovation and delivering value to its customers.
Microsoft’s Product Mix: A Diverse Portfolio
Microsoft offers a diverse range of products, including both hardware and software options. When it comes to hardware, Microsoft is known for its high-quality and innovative products that cater to the needs of different users. Some of their notable hardware offerings include:
- Computers: Microsoft manufactures a range of computers, including desktops and laptops, designed for various purposes and user preferences.
- Laptops: Microsoft’s lineup of laptops, such as the Surface Book and Surface Laptop, combines performance, portability, and sleek design.
- Tablets: The Surface Pro and Surface Go are versatile tablets that offer the functionality of a laptop with the convenience of a tablet.
- Xbox Gaming Consoles: Microsoft’s Xbox series has revolutionized the gaming industry, providing immersive gaming experiences.
- Smartphones: While Microsoft’s presence in the smartphone market has evolved over the years, their devices, such as the Lumia series, showcased their commitment to innovation.
When it comes to software, Microsoft is widely recognized for its industry-leading offerings that address various business and personal needs. Some of their notable software products include:
- Windows Operating System: Microsoft’s flagship Windows operating system is used by millions of users worldwide, providing a user-friendly interface and powerful functionalities.
- Microsoft Office suite: The Microsoft Office suite, which includes applications like Word, Excel, and PowerPoint, is essential for individuals and businesses, providing powerful tools for productivity and collaboration.
Additionally, Microsoft offers a wide range of apps , games , and entertainment options. Their app store features a diverse selection of applications catering to different interests and needs. Xbox Live provides access to an extensive library of games , and their entertainment services, such as Xbox Game Pass, offer a variety of on-demand entertainment options.
With such a diverse portfolio of products, Microsoft continues to provide innovative solutions to meet the evolving needs of its customers.
Microsoft’s Pricing Strategies: Flexibility and Value
Microsoft adopts a flexible pricing strategy that encompasses various approaches to meet the diverse needs of its customers. The company’s pricing strategies focus on providing flexibility and value, ensuring that their products are accessible to a wide range of consumers.
Freemium Pricing
One of the pricing strategies employed by Microsoft is freemium pricing , which offers certain products for free with the option to upgrade for additional features or premium versions. This strategy allows users to experience the basic functionalities of the product before deciding whether to upgrade or not. By offering a free version, Microsoft can attract new customers and establish a user base, while generating revenue from those who choose to upgrade.
Product Line Strategy
Microsoft also utilizes a product line strategy to cater to different customer segments. The company offers a diverse range of products across various categories and price points. Whether it’s software solutions, hardware products , or services, Microsoft ensures that there are options available to meet different customer preferences and budget levels. This strategy allows Microsoft to capture a larger market share by appealing to a wider range of customers.
Penetration Pricing
During product launches or market entry into new segments, Microsoft has implemented penetration pricing . This strategy involves setting an initially lower price to capture market share and attract customers. By offering competitive prices, Microsoft can encourage potential customers to choose their products over competitors. Once the market share is established, the company may adjust prices accordingly to maintain profitability.
Price Skimming
Price skimming is another pricing strategy utilized by Microsoft. This strategy involves initially setting higher prices for a new product and then gradually lowering them over time. By adopting this approach, Microsoft can capitalize on early adopters and customers who are willing to pay a premium for the latest technology. As the product matures and competition intensifies, Microsoft adjusts prices to make their products more accessible to a wider customer base.
Psychological Pricing
Microsoft leverages psychological pricing techniques to influence consumer perception. Through effective pricing strategies, such as using odd numbers (e.g., $9.99) or offering discounts, the company creates the perception of value and affordability. These pricing tactics tap into consumers’ subconscious decision-making processes and can positively impact purchasing behavior.
Promotional Pricing
Promotional pricing is employed by Microsoft to incentivize customers and create a sense of urgency. The company offers limited-time discounts, bundle deals, and special offers to entice potential customers to make a purchase. By leveraging promotional pricing , Microsoft can attract new customers, drive sales, and increase brand loyalty.
By employing a mix of pricing strategies, Microsoft aims to provide flexibility, value, and affordability to its customers. These strategies enable the company to cater to different customer segments, capture market share, and maintain a competitive edge in the ever-evolving technology market.
Microsoft’s Place Mix: Global Accessibility and Partnerships
When it comes to global accessibility, Microsoft has strategically positioned itself to cater to customers all over the world. Their place mix encompasses a diverse range of channels and partnerships, ensuring that their products and services are easily accessible to a wide audience.
Microsoft’s official website serves as a centralized platform where users can conveniently access and purchase their offerings. With a user-friendly interface and secure payment options, the website provides a seamless online shopping experience . Whether customers are looking for software solutions or hardware devices, Microsoft’s official website acts as a one-stop destination.
In addition to their online presence, Microsoft also operates retail stores that offer a hands-on experience for customers. These physical stores allow customers to interact with the latest Microsoft products, receive expert advice from knowledgeable staff, and make informed purchase decisions. The retail stores play a vital role in showcasing Microsoft’s commitment to quality and innovation.
To further expand their reach, Microsoft collaborates with authorized distributors and partners worldwide. These partnerships enable Microsoft to make their products available in both physical and digital marketplaces, ensuring that customers have multiple channels to access their offerings. By working with authorized distributors , Microsoft maintains quality control and provides customers with reliable sources for their products.
Microsoft’s global reach is a testament to their commitment to accessibility and availability. With an extensive network of retail stores, authorized distributors, and partnerships, they have effectively positioned themselves as a global leader in the tech industry.
To visually depict Microsoft’s place mix and global reach , the table below outlines the different channels and partnerships through which customers can access Microsoft products and services.
Through their strategic place mix and global partnerships, Microsoft continues to make their solutions easily accessible to customers, fostering their position as a tech giant with a global presence.
Microsoft’s Promotion Mix: Building a Brand and Engaging Customers
Microsoft employs a comprehensive promotion mix to build their brand and engage customers. They understand the importance of utilizing various marketing channels to reach their target market effectively. Through a combination of social media marketing , advertising , direct marketing , personal selling , and public relations , Microsoft creates a cohesive and impactful promotional strategy.
Social Media Marketing
Social media platforms play a vital role in Microsoft’s promotion mix . Leveraging platforms such as Facebook, Twitter, Instagram, and Google, Microsoft reaches a broad audience and promotes their products and services. Engaging content, targeted advertising , and interactive campaigns help them connect with their audience and build brand awareness.
Advertising
Advertising is another key component of Microsoft’s promotion mix . They invest in various advertising channels, including print media, television, radio, and online platforms, to showcase their innovative products and solutions. Advertisements are strategically designed to appeal to their target market, highlighting the benefits and unique features of their offerings.
Direct Marketing
Direct marketing allows Microsoft to communicate directly with their customers and prospects. They utilize email marketing campaigns, personalized catalogs, newsletters, and targeted direct mail to deliver targeted messages and relevant offers. By segmenting their audience and tailoring their communications, Microsoft ensures that their messages resonate with recipients and drive desired actions.
Personal Selling
Personal selling enables Microsoft to establish meaningful relationships and provide personalized solutions to their customers. Their sales team undergoes comprehensive training to understand the needs and pain points of potential buyers. Through one-on-one consultations, demos, and product presentations, Microsoft’s sales representatives offer expert guidance and demonstrate the value of their products and services.
Public Relations
Public relations play a crucial role in shaping Microsoft’s image and reputation. They actively engage in media relations, press releases, and industry events to position themselves as thought leaders and innovators. Microsoft’s involvement in philanthropic initiatives, educational programs, and sustainability efforts further strengthens their brand and fosters positive public perception.
By utilizing an integrated promotion mix, Microsoft effectively builds their brand, communicates their value proposition, and engages with their customers. Their strategic approach ensures that they reach their target market through diverse channels, maximizing their impact and fostering long-term relationships.
Microsoft’s marketing strategy has been instrumental in their global dominance within the digital marketplace . Through their innovative tactics and customer-centric approach, Microsoft has solidified their position as an industry leader. Their commitment to innovation has allowed them to continuously stay ahead of the curve and offer products and services that meet the evolving needs of their customers.
With a diverse product portfolio, encompassing both hardware and software offerings, Microsoft has catered to a wide range of customer preferences. Their flexible pricing strategies have made their products accessible to a broad audience, ensuring that they remain competitive in the market. Microsoft’s comprehensive promotion efforts, including social media marketing, advertising, and public relations, have helped them build a strong brand presence and effectively engage their target market.
In an ever-changing tech landscape, Microsoft’s marketing strategy is a testament to their commitment to innovation and customer-centricity . As they continue to shape the industry, Microsoft serves as an inspiration for other companies aspiring to achieve global dominance in the digital marketplace . By staying at the forefront of technology and consistently delivering value to their customers, Microsoft has solidified their position as a true leader in the field.
What is Microsoft’s marketing strategy?
Microsoft’s marketing strategy focuses on effective segmentation, competitor research , and a strong online presence to reach and engage with its target audience.
How did Microsoft start?
Microsoft was founded in 1975 by Bill Gates and Paul Allen in a small dorm room at Harvard University. They secured their first big break by signing a contract with MITS to provide a BASIC interpreter for their Altair 8800.
What is the 4P marketing mix framework?
The 4P marketing mix framework includes product, price, place, and promotion, which are crucial elements that shape Microsoft’s marketing efforts.
How does Microsoft tailor its marketing efforts to specific customer segments?
Microsoft employs a Segmentation, Targeting, and Positioning (STP) approach to customize its marketing efforts for specific customer segments. They also collect data and personalize experiences through their CRM strategy .
What products does Microsoft offer?
Microsoft offers a diverse range of products including hardware such as computers, laptops, tablets, Xbox gaming consoles, and smartphones, as well as software such as Windows operating system and Microsoft Office suite.
What pricing strategies does Microsoft use?
Microsoft utilizes various pricing strategies including freemium pricing, product line strategy, penetration pricing, price skimming, psychological pricing, and promotional pricing to cater to different customer segments.
How does Microsoft ensure global accessibility for its products?
Microsoft ensures global accessibility through its official website, retail stores, authorized distributors, and strategic partnerships, making its products available in physical and digital marketplaces worldwide.
How does Microsoft promote its products and build its brand?
Microsoft promotes its products and builds its brand through social media marketing, advertising, direct marketing, personal selling, and public relations efforts.
What has been the impact of Microsoft’s marketing strategy?
Microsoft’s marketing strategy has propelled the company to global dominance in the digital marketplace. Through innovation, a customer-centric approach, and a strong brand presence, Microsoft has established itself as a leader in the industry.
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How Microsoft became an Intelligence Driven Organization – and how your business could do the same
Leentje Chavatte
Microsoft, Data & AI and Digital Transformation
Microsoft has learned how to make digital transformation work, not just from projects undertaken with customers, but also by committing to its own transformation journey.
Digital transformation may be a buzzword, but that doesn’t make it meaningless. Far from it – a journey of transformation can open up infinite possibilities for organizations of any size and in any sector.
In recent years, Microsoft has supported large-scale transformations across many industries, delivering real, measurable results.
Robotics giant ABB saw a 20% increase in customer satisfaction after Microsoft’s Azure AI products helped transform its workforce management solution. Rockwell Automation achieved $300,000 in savings every day after transitioning to Office 365. A chatbot Microsoft created for UPS engaged in over 200,000 customer conversations in its first eight months alone.
These are some examples of the outcomes that can be realized when data is leveraged with Artificial Intelligence (AI). But digital transformation is not about isolated achievements. It is about recalibrating the entire organization around collecting, analyzing and using data. It is about becoming an organization with the ability to learn and evolve.
It’s not a one-time fix, it’s a journey. And it’s one Microsoft has been on itself.
Making it happen at Microsoft
Over four decades, Microsoft has grown from a small start-up to a $110 billion business with more than 130,000 employees. As the 4th Industrial Revolution hit, Microsoft felt the need for its own digital transformation to be at the forefront of the digital age.
The company set out to become a truly Intelligence Driven Organization with data at its heart. But to transform on such a massive scale, everyone from the CEO down had to align behind a vision that could inspire real change. It meant committing to new ways of working that would transform every process on which Microsoft was built. The whole business would need to work differently, experimenting more and learning from failure.
The transformation was a strategic imperative from the beginning. Looking back, you can follow the journey Microsoft was taking through CEO Satya Nadella’s public announcements. In April 2014, Satya said: “You have to build deeply into the fabric of the company a culture that thrives on data.” From that point on, everyone at Microsoft embraced a way of working that was centered around leveraging data to better understand and make decisions.
In 2017, Satya wrote the book Hit Refresh, covering the transformation at Microsoft within the context of AI and its impact on everyday life – a story encapsulated in his statement that “AI is the runtime that is going to shape all of what we do going forward.”
One year later, he introduced the idea of Tech Intensity, explaining that, “every organization will need to have what I describe as tech intensity…to be a fast adopter of digital technology…to build their own proprietary digital capability .”
A growth mindset
At the heart of Microsoft’s transformational journey was the concept of a growth mindset: the idea that everyone can change, learn and grow. To bring this vision to life, Microsoft identified four attributes that would allow this mindset to flourish.
The first attribute was obsessing over the people who matter most – the customers – and really understanding what truly matters to them. Second, Microsoft wanted to become a more diverse and inclusive organization. Third, the company wanted to break down its siloes and start operation as a single unit. And finally: to make a difference to the lives of each other, customers and the world around them.
As Satya pointed out, “as a culture, we are moving from a group of people who know it all to a group of people who want to learn it all .”
To track the progress of their cultural transformation, Microsoft began by asking employees if they were seeing evidence of positive change. This data was then evaluated against attributes that were measured over time. They included quantitative and qualitative analytics, with regular focus groups to ensure the trends that emerged were fully understood. To drive openness and transparency, all findings were regularly shared with senior management.
Becoming intelligence driven
Microsoft’s digital transformation offering is delivered by Microsoft Consulting Services (MCS). With a long list of global clients from Toyota to the UN Refuge Agency, MCS applies enterprise technology to business problems by understanding goals, identifying risks, and guiding digital transformation.
It helps organizations unlock powerful insights, empower teams with organizational agility, and enhance security for a competitive edge. And it offers support at every step – helping businesses make the best use of the Microsoft ecosystem.
In short, MCS helps its customers become Intelligence Driven Organizations . That is, an organization that leverages data combined with AI-technologies to foster growth, innovation, speed to market and cost efficiency.
It’s an approach to digital transformation that is shaped not only by Microsoft’s own story, but also by years of conversations with business leaders the world over undertaking their own transformations.
Together, these influences led directly to the development of the Intelligence Driven Organization (IDO) model.
The IDO model
The IDO model is not a tech solution, or an offer. It’s MCS’ approach to helping organizations navigate their own transformations.
The IDO model helps organizations identify their ‘north star’ – that is, the set of business outcomes they wish to achieve and where they want to go in the future.
Then, it provides a roadmap that allows organizations to design the processes that will generate these outcomes – and build the capabilities to digitalize those processes so that they can be implemented, monitored, measured and continuously improved over time, creating digital feedback loops.
Digital feedback loops
Digital feedback loops can be seen as flows of information that emerge when a business process has been redesigned around data. That process could be an interaction with customers (e.g. website use, sales enquiries or product purchases). It could concern back-office operations. It could involve employee activity (e.g. intranet use or response to a survey) or it could involve the real-time usage of products (e.g. application crash data transmitted back to the software developer). The data is collected and used to optimize that process by AI-enabled applications. Crucially, all information can be surfaced to the business processes that need it. There are no data silos.
Digital feedback loops are a central component to becoming an Intelligence Driven Organization – creating a foundation that fuels positive change, enabling organizations to be more productive at scale and become increasingly customer centric.
The four axes of the IDO model
The IDO model provides a framework for organizations to make digital feedback loops a reality. It distills everything Microsoft has learned globally about how to approach digital transformation and breaks it down into four key axes.
The first involves development of an executive strategy that will see an intelligence driven culture take root. The second axis ensures the right technical capabilities are in place, creating a foundation for the journey ahead. It concerns the capabilities that will be needed, along with where they should be developed and when. Third comes a look at the day-to-day execution of the transformation, before the fourth and final stage – this is where the organization must envision and prioritize a set of scenarios that represent the desired business outcomes.
Framing an approach to transformation through the four axes helps organizations overcome the key obstacles to becoming intelligence driven that are often highlighted in research . These include availability of data, a shortage of data science skills, a difficulty envisioning the right business use cases and, most importantly, a culture that struggles to understand the need to be data driven.
The right way to rebound
In April 2020, Satya Nadella said:
“we’ve seen two years’ worth of digital transformation in just two months.”
Now a new normal is emerging in the way people travel, work and shop. Organizations must respond quickly, becoming more efficient, more agile and more adaptable.
The principles behind Microsoft’s digital transformation can form the basis of similar projects in any organization. By becoming a business driven by data and AI – one that learns and evolves – companies can build the resilience they need to face the challenges of the future.
Microsoft Consulting Services can help business leaders use this moment as a trigger to transform, repositioning their organizations for a more competitive age. In the future, change will come even faster. To thrive, everyone must adapt.
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Satya Nadella employed a 'growth mindset' to overhaul Microsoft's cutthroat culture and turn it into a trillion-dollar company — here's how he did it
- Microsoft is a case study in how a growth-mindset culture can help companies succeed in the future economy.
- Microsoft is a trillion-dollar company thanks largely to a culture shift led by Satya Nadella.
- Since Nadella became CEO in 2014, he's encouraged the entire company to adopt a growth mindset, or the belief that skills are developed through hard work and challenges are opportunities to learn.
- Before Nadella took over, Microsoft was characterized by competition between teams and between individual employees.
- Now, in keeping with a growth mindset, Microsoft evaluates employees' performance based partly on how much they helped their colleagues succeed. The company also looks to learn from its former rivals in the tech industry.
- Business Insider spoke with a range of company insiders and organizational researchers to get the inside story on how to change the culture of a 150,000+ employee software giant.
- Visit Business Insider's homepage for more stories .
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A cartoonist once drew an illustration depicting Microsoft's organizational chart as warring factions.
Take a look and you'll see three separate gangs: one blue, one green, one yellow. The gangs are assembled in pyramid-shaped hierarchies, with one leader at the top, two or three deputies at the next level, and so on.
A hand sticks out from each pyramid, pointing a gun directly at one of the others. It's clear. This is war.
And then Satya Nadella became CEO.
Nadella described the era of warring gangs in his 2017 memoir-manifesto, " Hit Refresh :" "Innovation was being replaced by bureaucracy. Teamwork was being replaced by internal politics. We were falling behind."
That particular cartoon – drawn in 2011 by a Google employee named Manu Cornet , no less – made changing Microsoft's culture Nadella's No. 1 goal as CEO.
"As a 24-year veteran of Microsoft, a consummate insider, the caricature really bothered me. But what upset me more was that our own people just accepted it," Nadella wrote. "When I was named Microsoft's third CEO in February 2014, I told employees that renewing our company's culture would be my highest priority."
Since becoming CEO, Nadella has been credited with a grand reinvention of Microsoft, exemplified by its market value exceeding $1 trillion, one of just a handful in history to hit that mark. When Nadella first took over, its market value was around $300 billion.
One of the keys to this transformation is a psychological concept that's become a mantra at Nadella's Microsoft: growth mindset . The concept has helped Microsoft made the shift to remote work with aplomb, reaching a market cap of more than $1.6 trillion, showing that Nadella's strategy has survived the pandemic intact.
Microsoft has traded a fixed mindset for a growth mindset
Growth mindset describes the belief that skills are developed through hard work and that challenges are opportunities to learn. Fixed mindset, on the other hand, refers to the belief that talent is innate and that struggling is a sign of failure. Research on the difference between growth and fixed mindset — and how they predict success — was pioneered by Stanford's Carol Dweck.
Early on in her career as a developmental psychologist, Dweck visited children at school and presented them with a series of increasingly difficult puzzles. Her goal was to better understand how people cope with failure. Some students, she found, weren't fazed by it.
In her 2006 book, " Mindset ," she recalls one 10-year-old boy who "pulled up his chair, rubbed his hands together, smacked his lips, and cried out, 'I love a challenge!'"
Dweck would spend the next five decades trying to figure out the difference between people who relish a good challenge and those who fear failure. Scores of studies published under her name suggest that people who see intelligence and abilities as learnable are more successful, personally and professionally, than people who think they're static.
Recently, Dweck coauthored a study that drew a link between growth mindset and organizational success . Employees who think their companies have a fixed mindset, the study found, interpret the company's culture as less collaborative, less ethical, and less willing to take risks than employees who think their companies have a growth mindset.
Given the rapid pace of technological change , these research findings are hyper-relevant. Across industries, adopting a growth mindset may be the only way to survive, and certainly the only way to thrive. When neither executives nor rank-and-file employees can predict what their jobs will look like next week, they need to embrace the resulting vulnerability, and get excited about learning.
Plenty of companies, in industries from telecommunications to early education, talk about cultivating a growth mindset , and about looking for job candidates who have it . But Microsoft is perhaps the most powerful example of an organization that has used growth mindset, and the psychology behind it, to rebuild its culture.
In many ways, fixed mindset and growth mindset can describe Microsoft before and after Nadella.
Nadella has encouraged Microsoft employees to be 'learn-it-alls' instead of 'know-it-alls'
Since the era of Bill Gates, Microsoft's founder and first CEO, its leadership had generally rewarded the smartest person in the room. And Microsoft performed well under Gates, but that performance came at a cost.
Gates was famous for meltdowns and browbeating – so much so that Microsoft cofounder Paul Allen once described working with Gates as "being in hell." Gates would only back down if you could convince him you knew what you were talking about, Allen said.
Gates' successor, Steve Ballmer, also known for an explosive temper, later presided over the atmosphere depicted in that cartoon Nadella was determined to address. Ballmer was known for cultivating a culture in which Microsoft teams warred with each other, as previously reported by Business Insider .
Nadella, who joined Microsoft as an engineer in 1992, came up in this culture, before becoming CEO in early 2014.
By that point, the company's bid to compete in the smartphone market through the purchase of Nokia was proving to be a burden and would lead it to write off nearly the entire $7.6 billion acquisition price. The personal computer market was shrinking, leading to declines in Microsoft's flagship Windows operating system business, and the Xbox One console's poorly received launch made it a punchline.
Microsoft's history as a tech-industry pioneer wouldn't help the company compete, Nadella wrote in an email to employees on his first day as CEO. The company needed a change in mindset.
"Our industry does not respect tradition — it only respects innovation," Nadella wrote on Feb. 4, 2014, in a memo to employees days after taking on the CEO role. "Every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this."
Nadella's leadership philosophy evolved into the adoption of a growth mindset. He asked employees to be "learn-it-alls," not "know-it-alls," and promoted collaboration inside and outside the organization. Employees are now evaluated partly on how much they've helped others on their team.
Microsoft introduced a new performance-management framework based on growth mindset
With any company culture shift, executives run the risk of promoting jargon more than action, and of HR representatives being the only ones who know there's a culture change underway.
Microsoft has tried to avoid that fate, not only by training its employees on the psychology of growth mindset, but also by embedding the concept into its daily work flow.
Prompts to adopt a growth mindset appear on posters throughout Microsoft's campuses ( something at which employees sometimes poke fun ). At the start of a meeting, a manager might remind colleagues to approach an issue with a growth mindset.
And in one of the most significant manifestations of growth mindset, Microsoft has eliminated stack ranking .
Stack ranking was famously used by Jack Welch when he was CEO of General Electric. Ballmer used the system at Microsoft to evaluate employees, although he did start phasing it out prior to his departure. Microsoft managers had to rank their employees from one to five in equal measure. Which meant that, no matter how good the employees were, some of them had to get the lowest ranking of a five.
Performance was defined in stack ranking as the quality of individual work, and that emphasis on individual performance was linked to fierce competition among Microsoft employees. It was also a barrier to Microsoft's innovation, since it facilitated a culture that rewarded a few standout team members and even gave employees incentive to hope their colleagues failed.
"We had a little bit of a 'not-invented-here' syndrome," Microsoft Chief People Officer Kathleen Hogan previously told Business Insider , referring to the tendency for developers and even organizations to reject acceptable solutions to problems if they hadn't developed those solutions themselves.
Dweck's research helps explain this trend, too. Her studies suggest that stack ranking's emphasis on "star" employees can leave everyone else afraid to try anything new, for fear of failing. In turn, that means companies are less innovative.
Microsoft leadership says its new system for evaluating employees instead rewards collaboration. Managers and employees meet often to discuss performance , in keeping with the general trend of companies nixing annual reviews and having managers regularly speak with employees about their work.
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"What we really value is three dimensions," said Hogan , Microsoft's chief people officer. "One is your own individual impact, the second is how you contributed to others and others' success, and the third is how you leveraged the work of others."
To use Hogan's examples, maybe a more seasoned employee helped someone new to the team, or a software engineer built on another engineer's work instead of reinventing it.
Microsoft recently applied growth mindset to a new framework for managers : model, coach, care. That's a combination of setting a positive example for employees, helping the team adapt and learn, and investing in people's professional growth.
To measure the impact of these initiatives in real time, Microsoft emails employees with a different question every day asking how they're feeling about the company and its culture.
The shift from competition to collaboration might seem like it would be a breath of fresh air. And on the whole, it has been. But employees say it's presented its own challenges, too.
Nadella pushes Microsoft executives to take on stretch assignments
Nadella asked Peter Lee , one of the company's top researchers, to make a big change.
It was 2017 and Lee – now corporate vice president of Microsoft healthcare – had long worked on broader technology problems as a key leader in Microsoft Research, the company's research division.
Nadella wanted him to take on a new challenge and lead the company's emerging health care business, using his background in artificial intelligence and cloud computing to find new ways to tune the products to the needs of healthcare companies.
"Taking on healthcare was something that really perplexed me at first," he said. "I joked Satya sent me out into the Pacific Ocean and said, 'Go find land.'"
Adopting a growth mindset can be uncomfortable, he said.
"Growth mindset is a euphemism because it can feel pretty painful, like a jump into the abyss," he said. "You need to be able and willing to confront your own fixed mindset – the things that make you believe something can't work. It's painful to go through personally, but when you get past it, it's tremendously rewarding."
The transition has been edifying, both in terms of his personal growth – Lee was recently named to the National Academy of Medicine – and Microsoft's growth in the industry, as it establishes itself as a meaningful player in healthcare tech.
Microsoft now sees the business case for letting go of its rivalries with other tech giants
Under Ballmer, Microsoft was notorious for prioritizing its Windows operating system and Office productivity applications businesses over the rest of the company – at one point, it even canceled the Courier tablet, which would have been an early, future-looking competitor to Apple's iPad, because it may have undermined Windows.
Likewise, Microsoft once shunned Linux, a free open-source operating system once considered the biggest threat to Windows. Ballmer once called it a "cancer." But early on in Nadella's time as CEO, Microsoft changed tack and proclaimed, " Microsoft loves Linux ."
It wasn't just Microsoft being friendly. There was a strong business case for blurring boundaries. At the time, Microsoft said it realized its customers used both Windows and Linux, and saw providing support to both as a business opportunity on-premise and in the cloud. That would have been unthinkable in the Ballmer years, but it's proven to be a savvy business move: Microsoft recently hinted that Linux is more popular on its Azure cloud platform than Windows itself.
Microsoft's relationship with Salesforce has followed a similar trajectory. Whereas Ballmer had frequent and public bouts with Salesforce CEO Marc Benioff , Microsoft under Nadella put aside its rivalry with Salesforce – which competes directly with Microsoft's customer-relationship-management Dynamics 365 product – in order to ink a big cloud deal that was good for the company overall.
Nadella even invites leaders from companies across industries to Microsoft's CEO Summit so the executives can learn from each other. Ballmer, meanwhile, famously snatched an employee's iPhone at a company meeting and pretended to stomp on it.
Which is not to say Microsoft always plays nice in the Nadella era. The company last summer changed licensing agreements to raise prices — often significantly — when customers choose to run certain Microsoft software on rival clouds including Amazon Web Services or Google Cloud. And it's been trading public barbs with AWS over the still contested $10 billion Pentagon cloud contract.
The Trump administration awarded the contract to Microsoft over AWS, but Amazon is challenging the decision in court, alleging political interference. The Pentagon in September upheld its decision to award the contract to Microsoft but AWS is expected to file a new complaint as part of the lawsuit next week.
The culture shift at Microsoft is an ongoing process
The beginning of Microsoft's culture shift was rocky.
In "Hit Refresh," Nadella recalls a Microsoft manager who announced in the early days, "Hey, Satya, I know these five people who don't have a growth mindset." Nadella writes, "The guy was just using growth mindset to find a new way to complain about others. That is not what we had in mind."
Even today, Microsoft leaders acknowledge that the culture change isn't over . Things have improved under Nadella, but the company culture is still far from perfect.
Diversity is an opportunity for improvement at Microsoft. Much like the larger technology industry , Microsoft still employs relatively few women and people of color in leadership and technical roles.
One of Nadella's biggest gaffes as CEO happened early on in his tenure, when he suggested women should not ask for raises, but rely on "faith" and "karma." After these comments, Nadella sent out an internal memo admitting to his mistake, explaining how he planned to learn from it, and stating his belief in "equal pay for equal work."
Nadella writes in "Hit Refresh" that in some ways he's glad to have belly-flopped in public. "It helped me confront an unconscious bias I didn't know I had," Nadella writes, "and it helped me find a new sense of empathy for the great women in my life and at my company."
Kevin Oakes, who runs a human-resources research company that helped Microsoft with its shift toward growth mindset, sees Nadella as an exemplar of a leader during a transition. That's largely because Nadella practices the growth mindset he preaches. In a presentation at Talent Connect, an annual conference organized by LinkedIn (which is owned by Microsoft), Oakes said Nadella has been Microsoft's "culture champion." Nadella understands that organizational culture is critical to the company's performance, Oakes said.
But today's Microsoft is still far from perfect. The positive contributions of growth mindset have not yet matched up with diversity and equity for Microsoft's workforce, according to some employees. Microsoft is the subject of a gender discrimination lawsuit still pending , which was denied class-action status by a federal judge. Employees have also openly alleged sexual harassment and discrimination.
The company released its first diversity and inclusion report in 2019 to track its progress in hiring — and retaining — a more diverse workforce. Results from that report showed that minorities in Microsoft's US offices earned $1.006 for every $1 white employees earned. A closer look reveals that white men still held more high-paying leadership positions than women or underrepresented minorities.
Microsoft has since announced plans to double the number of Black leaders and employees within the company, and the number of Black suppliers with which it works.
Meanwhile, Microsoft leadership still has some philosophical differences with employees as it relates to employee activism. Employee groups have protested Microsoft and Microsoft-owned GitHub's relationship with Immigration and Customs Enforcement, and some employees have said Microsoft's relationship with oil and gas companies is at odds with the company's goal to become "carbon negative" by 2030.
Some Microsoft employees say the company is making progress. Rich Neal, a senior director who's been with the company since 2003, recalled a recent meeting in which a male colleague all but repeated the same comment a female colleague had shared 15 minutes earlier.
At that point, Neal recalled, a third meeting participant addressed the male colleague to ask whether perhaps he hadn't understood the female colleague's point. And Neal said it wasn't a passive-aggressive attack. Senior leaders are encouraged to "be curious and ask questions, versus making statements," as a way of modeling growth mindset, he added.
Microsoft has been equally vocal about diversity and inclusion within its customer base, building products that are accessible to as many users as possible. Ben Tamblyn, a 15-year company veteran and Microsoft's director of inclusive design, mentioned Xbox as a prime example. In 2018, Microsoft released the Xbox Adaptive Controller , which makes it easier for gamers who have limited mobility or physical impairments to play. (Interviews with Neal and Tamblyn were arranged by Microsoft's public-relations firm.)
Microsoft is a case study in growth mindset
Microsoft's culture shift, and its accompanying business turnaround, is already a case study in business schools and in reports from management consultancies and research centers . That makes sense to Mary Murphy, a professor of psychological and brain sciences at Indiana University and Dweck's co-author on the paper about growth mindsets within organizations.
Growth mindset is essential for innovation in the technology industry, Murphy said, where change rarely happens incrementally. Instead, there are big inflection points from which there's no return. Microsoft, Murphy added, needs to be on the "cutting edge" of growth mindset in order to stay relevant.
Nadella, for his part, has modeled a growth mindset from the top of the organization, not least in his response to his tone-deaf comments about gender and compensation. "I learned, and we will together use this learning to galvanize the company for positive change," Nadella wrote in the memo he sent apologizing for the comments. "We will make Microsoft an even better place to work and do great things."
Got a tip? Contact reporters Shana Lebowitz via email at [email protected] and Ashley Stewart via email at [email protected] , message her on Twitter @ashannstew, or send her a secure message through Signal at 425-344-8242 .
Watch: Microsoft News' corporate vice president explains how his team avoids fake news sorting through 170,000 stories a day
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Insight case study
Insight puts client outcomes first with analytics and ai solutions on microsoft azure, businesses want to utilize the cloud but often don’t know how.
The business benefits of the cloud, advanced analytics, and AI are clear, but many organizations don’t know how to deploy them in their own environment.
Finding a partner in Insight
Insight’s deep expertise with Microsoft Azure enables them to help customers unlock new, powerful capabilities and insights in their own businesses.
Accelerated growth for customers
Insight has helped businesses in diverse industries accelerate their digital transformations with Microsoft Azure, reaching new customers and bolstering growth.
Insight provides cutting-edge technology solutions to organizations of all sizes, pairing its deep expertise with end-to-end capabilities to help businesses run smarter. In the top one percent of all Microsoft partners globally, Insight has earned 18 Microsoft competencies reflecting its best-in-class capabilities, top-notch expertise, and commitment to excellence.
Through strategic acquisitions, Insight has expanded its resources and capabilities to support clients' digital transformation initiatives. The company has itself transformed in the last five years, moving from a legacy channel partner to aligning with clients' larger outcomes by leading with innovative solutions.
Today, the company is uniquely positioned and can practically do it all—build cohesive solutions that pull together everything a client needs to rapidly realize value for their technology investment and grow their business. A case in point: with the goal of making digital transformation accessible to more clients, Insight has invested in creating a reusable framework for quickly deploying analytics and AI-enabled IoT solutions. The Connected Platform integrates cloud and edge technology across Insight's broad partner network. It can be deployed quickly and securely to leverage Insight's cloud-managed services for ongoing support.
During the COVID-19 public health crisis, Insight is using its Connected Platform to deploy intelligent Detection and Prevention solutions for guarding against the virus and back-to-work initiatives.
An early leader in analytics and AI
Insight has a strong heritage of innovation and achievement in the field of data and has evolved its offerings from early support for SQL databases to SQL-as-a-service in the cloud, and now to analytics and AI. As the 2018 Microsoft Worldwide AI Partner of the Year, Insight is firmly established as a leader in the field with an extensive analytics and AI portfolio.
Whether deploying a large data mart, using Microsoft Azure Synapse Analytics to manage huge datasets, building machine learning models, or adding predictive capabilities to an existing application, Insight is seeing analytics and AI come to dominate the enterprise space and is equipped to meet all of its clients' needs. "We’re all about integrating the capabilities of advanced analytics and AI technologies into the human experience," said Matt Jackson, VP of Services for Digital Innovation at Insight.
Committed to customer-centricity
Insight has earned a reputation for helping clients across numerous industries achieve remarkable business outcomes. Examples of high-profile—and highly successful—engagements in the Finance and Healthcare sectors include:
A large American bank, known for disrupting and outpacing the legacy brokerage industry with phone- and web-based trading, came to Insight for tools to reach the next generation of investors. The firm developed a strategy and solution, leveraging Microsoft Azure Bot Framework with analytics and AI, to engage Millennial and Gen-Z prospects on social media platforms with investing advice and the ability to set up accounts and make trades. The initiative had a tremendous impact on the bank's growth and earned Insight the Microsoft Partner of the Year award.
At the time that a large American healthcare system engaged Insight, it was an eight-hospital network seeking to achieve the holy grail of healthcare: Improve patient outcomes while simultaneously controlling costs. To reconcile these seemingly conflicting goals, Insight developed a predictive solution that analyzes multiple data streams of information on patient length of stay to optimize the scheduling of healthcare professionals across the network. Deploying some 1,000 Surface tablets to facilitate patient intake on the new system, the healthcare provider reduced costs by USD30 million in the first 18 months, improved both patient care and employee satisfaction, and went on to acquire 24 additional hospitals—all of which now rely on the Insight solution built on Microsoft Azure analytics and AI services.
Microsoft Azure is the only option in the enterprise
Early in its pivot to the cloud, Insight saw that Microsoft, through innovation and investment in best-of-breed tools, was going to be the industry leader, especially in the enterprise space. Insight's foundational relationship of more than 25 years with Microsoft and its commitment to putting clients first made the decision to choose Microsoft Azure for its signature solutions an easy and obvious one.
Insight believes that building modern solutions leveraging the Microsoft analytics and AI stack is solidly in the best interest of its clients. The company frequently collaborates closely with the Microsoft field to focus on client outcomes in envisioning sessions to determine how to achieve the client's business goals.
A client, for example, may be seeking to improve customer satisfaction or loyalty, or to deploy a new enterprise solution to support a remote workforce—particularly relevant in response to the COVID-19 pandemic. Insight drives both the strategic and technology direction of these cloud-native solutions as well as execution and managed services.
"Together, Microsoft and Insight bring differentiated technology and delivery capabilities to empower customers with future-ready solutions, powered by analytics and AI,” said Simran Sachar, Analytics and AI Director, Microsoft. “With our deeper cloud, data, and AI partnership with Insight, we help customers realize superior outcomes with a faster path to success."
“Together, Microsoft and Insight bring differentiated technology and delivery capabilities to empower customers with future-ready solutions, powered by analytics and AI. With our deeper cloud, data, and AI partnership with Insight, we help customers realize superior outcomes with a faster path to success."
—simran sachar, analytics and ai director, microsoft, simplifying the path to success.
Insight is finding that, increasingly, organizations are recognizing how challenging data projects can be. The firm is working to simplify the path to success for its clients. A large piece of this is a discovery process centered on understanding what the client needs to succeed and build a better business.
"Many technologies right now are being pointed at simplifying the technological profile," said Ken Seier, Chief Architect for Data and AI at Insight. "When we look at the major cloud vendors—and in the enterprise space, Microsoft is the only option for us—we see combinations of big data tools, relational tools, and AI tools being brought together under a single header to allow a single set of developers, or a single set of super users, to really get access to data at scale, the computational power required to analyze it, and then to present it back to a user: the full life cycle.”
Seier went on to explain, “We see that everywhere in the business—this simplification, or rationalization, of what used to be a complex ecosystem down to a very small set of tools. Companies that rely on these tools are going to find themselves in the pole position as they begin their digital journeys with these technologies."
Insight is building end-to-end solutions on the Microsoft Azure stack combining big data, relational, and AI tools to allow developers and clients to get access to data at scale with the computational power required to analyze the data and then deliver it to the end-user. Cloud technologies are maturing, and more organizations are interested in applying analytics and AI to solve their business problems. There is also, however, a growing expectation of higher quality and lower risk.
Insight will continue to invest in industry-specific solutions, harnessing the best practices and IP the firm has developed on Microsoft Azure in both the production environment and for reactive managed services. 'Insight's evolving investment in Microsoft analytics and AI will allow the firm to impact more organizations by making these advanced technologies scalable, repeatable, and supportable—Insight's top priority to meet its 'clients' business needs.
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Rescale case study
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Helping Microsoft raise the bar on corporate sustainability
How WE told the story of Microsoft’s carbon reduction moonshot
In January 2020, Microsoft was the first major corporation to set a bold goal to be carbon negative — moving beyond carbon neutral — by 2030, and by 2050 to remove all the carbon it has emitted into the atmosphere since its founding in 1975. Microsoft also created the Climate Innovation Fund, committing $1 billion to fund new innovations and climate solutions, including carbon removal. And, the company committed to a high level of transparency so others could learn from what worked and what didn’t.
This initiative was much more ambitious than similar plans at other companies, but in an environment where companies in many industries are making promises about sustainability, sorting through what’s real and what isn’t can be difficult. As such, we knew convincing media, partners and customers to pay attention and view Microsoft’s plan differently would be a challenge. The campaign’s goals were to:
- Help audiences understand the science, math and meaning behind how companies account for carbon and a common understanding of the terms they use.
- Help Microsoft elevate and shift the global carbon conversation to focus on more rigorous and verifiable approaches to tackling carbon emissions.
Climate change continues to be a charged topic, and we knew Microsoft’s plan would spark interest across multiple audience segments. To reach them, the team engaged with a wide array of media outlets, including consumer, business, finance, science, technology and public policy. We needed to educate and provide context for Microsoft’s carbon accounting and science-based plan without losing sight of the initiative as a whole. Centering the message on Microsoft’s “moonshot” helped drive home the magnitude of the commitment.
Timing was critical. The announcement was scheduled for the week before the World Economic Forum’s annual meeting in Davos, Switzerland, where CEOs, government agencies and politicians gather to discuss global issues, with the environment topping the list of this year’s meeting. With the tragic wildfires in Australia continuing to burn and the rise of climate activist influencers, we had the opportunity to position Microsoft’s sweeping initiative as the gold standard for tech companies stepping up to change the world.
Microsoft’s commitment resonated with governments, industry leaders, media and influencers alike. The level of detail, specificity around its plan to go carbon negative, transparency on the inherent challenges and the magnitude of the company’s investment resulted in:
- Global leaders at the WEF in Davos cited Microsoft as the prime example of a large company committed to sustainability
- 2,110 earned media placements globally, including 465 original articles. Highlights include Bloomberg , the BBC , Wall Street Journal , Fast Company and CNN
- 1,834 broadcast hits, reaching more than 9.3M TV viewers and 43.1M weekly radio listeners. Highlights include NPR’s Morning Tech
- 25,000+ Twitter mentions and 100,000 engagements
- Microsoft’s approach is becoming part of the master narrative media use when covering the commitments and plans of other companies, further entrenching it in the broader conversation about addressing critical climate change challenges
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New attack leaks VPN traffic using rogue DHCP servers
Bill toulas.
- May 7, 2024
A new attack dubbed "TunnelVision" can route traffic outside a VPN's encryption tunnel, allowing attackers to snoop on unencrypted traffic while maintaining the appearance of a secure VPN connection.
The method, described in detail in a report by Leviathan Security, relies on the abuse of Dynamic Host Configuration Protocol's (DHCP) option 121, which permits the configuration of classless static routes on a client's system.
The attackers set up a rogue DHCP server that alters the routing tables so that all VPN traffic is sent straight to the local network or a malicious gateway, never entering the encrypted VPN tunnel.
"Our technique is to run a DHCP server on the same network as a targeted VPN user and to also set our DHCP configuration to use itself as a gateway," reads the report .
"When the traffic hits our gateway, we use traffic forwarding rules on the DHCP server to pass traffic through to a legitimate gateway while we snoop on it."
The issue lies in DHCP's lack of an authentication mechanism for incoming messages that could manipulate routes, and was assigned the vulnerability identifier CVE-2024-3661 .
The security researchers note that this vulnerability has been available for exploitation by bad actors since at least 2002, but there are no known cases of active exploitation in the wild.
Leviathan has informed many of the impacted vendors, as well as CISA and the EFF. The researchers have now publicly disclosed the issue along with a proof-of-concept exploit to raise awareness and compel VPN vendors to implement protection measures.
Mitigating TunnelVision attacks
Users are more apt to be impacted by "TunnelVision" attacks if they connect their device to a network that is either controlled by the attacker or where the attacker has a presence. Possible scenarios would include public Wi-Fi networks like those in coffee shops, hotels, or airports.
The VPN on the targeted device must be susceptible to routing manipulation, which Leviathan says is typically the case with most VPN clients that use system-level routing rules without anti-leak safeguards.
Finally, automatic DHCP configuration on the target device needs to be enabled, for the malicious DHCP configuration to be applied during network connection. This is, again, a commonly seen configuration.
However, it should be noted that for this attack to work, a user must connect to the rogue DHCP server before the network's legitimate one.
The researchers say attackers can increase the chance their rogue servers will be accessed first in multiple ways, including DHCP starvation attacks against the legitimate server and ARP spoofing.
The TunnelVision CVE-2024-3661 flaw impacts Windows, Linux, macOS, and iOS. Due to Android not having support for DHCP option 121, it is the only major operating system not impacted by TunnelVision attacks.
Leviathan proposes the following mitigations for VPN users:
- Use network namespaces on Linux to isolate network interfaces and routing tables from the rest of the system, preventing rogue DHCP configurations from affecting VPN traffic.
- Configure VPN clients to deny all inbound and outbound traffic that does not use the VPN interface. Exceptions should be limited to necessary DHCP and VPN server communications.
- Configure systems to ignore DHCP option 121 while connected to a VPN. This can prevent malicious routing instructions from being applied, though it might disrupt network connectivity under certain configurations.
- Connect via personal hot spots or within virtual machines (VM). This isolates the DHCP interaction from the host system's primary network interface, reducing the risk of rogue DHCP configurations.
- Avoid connecting to untrusted networks, especially when handling sensitive data, as these are prime environments for such attacks.
As for VPN providers, they are encouraged to enhance their client software to implement their own DHCP handlers or integrate additional security checks that would block applying risky DHCP configurations.
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Home / Case Studies / ABS Capital Partners
Financial capital firm reduces costs with Office 365 and Creospark
Published on April 16, 2020
Creospark’s goal is to transform your workplace into an enthusiastic environment for your people to work better, faster, and smarter. Creospark was established from a dream to create a different company – to deliver quickly and effectively, to facilitate the right change to support people and to give back. Creospark believes that in the ever-changing digital environment, it is extremely important to harness the power of the cloud.
Founded in 1990, ABS Capital Partners (ABS), an American private equity firm, focused on investments in companies across a range of industries, including business and education services, information and communications technology, and health care. The firm has raised approximately $2.5 billion since inception across several funds.
ABS, which is focused on helping organizations by providing growth capital, had to connect their Salesforce CRM, which contained vital secure client information, to their Office 365 and SharePoint cloud document management platform where they stored related client documentation and metadata. ABS tasked Creospark, a Microsoft Partner, with integrating these systems in a fashion where source system data and documents would be accessed from each system to increase employee productivity and ease of use.
There is an increasing need for financial capital companies, like ABS, to stay attuned to the latest technology trends and use best-of-breed cloud software platforms to efficiently and effectively optimize their organizational business needs. They are, at the same time finding the need to transfer content and data amongst these disparate and disconnected cloud platforms.
For ABS, there didn’t seem to be an easy way to do this without spending enormous amounts of money to bring in a specialist for each individual system.
With a significant portion of ABS’s workforce constantly updating account, opportunity, and deal data within their Salesforce CRM, it was vital that there would be a seamless experience derived from the CRM for accessing documents and related content for collaboration within their SharePoint platform. Furthermore, it was a tedious process to update both systems with customer and deal information. Ancillary benefits anticipated by engaging in this project was a reduction in operational costs for storage of customer related documents in the cloud.
Fortunately, modern cloud services with the Microsoft cloud and content services stack facilitate connecting these systems to allow access to the information needed from their cloud software platforms.
ABS selected Creospark as their systems integration partner due to an existing partner relationship and expert qualifications. Working together to define requirements, as well as selecting the best-in-class Microsoft enterprise cloud-based middleware, workflow tools, and content service technologies, the team derived an implementation plan as well as a technical design for the best solution to meet the company’s needs and reduce operational costs.
Creospark designed a solution that eliminated the need to manually transfer account, opportunity, and deal data to SharePoint from Salesforce. Once in SharePoint, Power Automate flows are initialized to perform further refinement on library content and data based on business requirements. Furthermore, this solution allowed capabilities to open SharePoint document libraries directly from the Salesforce CRM interface with the appropriate security being added on the SharePoint libraries.
The solution involved using the following components:
- Modern Cloud Content Services such as SharePoint and Power Automate within the Office 365 stack for document management and workflows to meet business requirements
- Security and compliance management for auditing and information protection
- Microsoft Azure App Services to facilitate triggered metadata transfer from the Salesforce CRM environment to the SharePoint environment
As a result, ABS reduced operational costs on the manual transfer of account related metadata on both systems. There has also been significant savings on the costs of document management by using their existing SharePoint document management system, which provides an ample amount of space with the subscription. In addition, they satisfied their governance policies of storing all account related documentation within SharePoint and made their workers more productive by automating workflows by using Power Automate. ABS is now expanding its adoption of Office 365 and Azure in terms of security and compliance, as well as workflows within SharePoint, given the cost savings benefits.
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Microsoft is a case study in how a growth-mindset culture can help companies succeed in the future economy. ... a 15-year company veteran and Microsoft's director of inclusive design, mentioned ...
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The company set out to become a truly Intelligence Driven Organization with data at its heart. But to transform on such a massive scale, everyone from the CEO down had to align behind a vision that could inspire real change. It meant committing to new ways of working that would transform every process on which Microsoft was built.
Summary. Pharmaceutical companies are looking to heal legacy communication pains and heavy operational headaches. Thankfully, the treatment — a modern workforce supported by the cloud — is a powerful and effective remedy, once prescribed. A leading pharmaceutical company developing, manufacturing and marketing pharmaceuticals in more than ...
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Energy and airplanes. Willmott says that one of the most notable ways Microsoft has made an impact on the environmental sustainability side is by procuring renewable energy to power the company's datacenters. So far, Microsoft has procured enough renewable energy to power 60 percent of its datacenter load by the end of this calendar year.
The business world is evolving at an exponential rate—and more than ever, Microsoft Partners are leading the charge. Learn more. Crayon. With an accurate, comprehensive assessment of its customers' IT environments, Crayon has found tremendous success mapping out the future of those environments. ... increasing the company's overall ...
Microsoft is a case study in how a growth-mindset culture can help companies succeed in the future economy. Microsoft is a trillion-dollar company thanks largely to a culture shift led by Satya ...
A case in point: with the goal of making digital transformation accessible to more clients, Insight has invested in creating a reusable framework for quickly deploying analytics and AI-enabled IoT solutions. The Connected Platform integrates cloud and edge technology across Insight's broad partner network.
The level of detail, specificity around its plan to go carbon negative, transparency on the inherent challenges and the magnitude of the company's investment resulted in: Global leaders at the WEF in Davos cited Microsoft as the prime example of a large company committed to sustainability. 2,110 earned media placements globally, including 465 ...
Summary. This U.S.-based healthcare organization was migrating more than 40 terabytes of legacy content from SharePoint on-premises to SharePoint Online. It needed to ensure all patient privacy and sensitive information was protected according to HIPAA guidelines. Although migration was a top priority, the organization recognized the importance ...
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Traps of Fixed Mindset. Example. Emotional Consequences. "Should" statements. "I should close this deal without help." "I should go to all my child's basketball games.". You feel paralyzed by never living up to your own expectations—or the expectations you imagine others have for you. "All or Nothing Thinking".
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How to increase 65% of the overall reach, compared to a third-party cookie targeted campaign and 78% of impressions without cookies on publisher's partner inventory, First-id was the only deterministic identifier without cookies that showed up. March 02, 2024. Case study.
May 7, 2024. 02:46 PM. 0. A new attack dubbed "TunnelVision" can route traffic outside a VPN's encryption tunnel, allowing attackers to snoop on unencrypted traffic while maintaining the ...
Challenge. As an organization whose services are built on and around Microsoft technologies, Avanade's workforce of 50,000 professionals are experienced, heavy users of collaboration solutions like Yammer and Microsoft Teams. But even with top-notch approaches to collaboration, finding the right people, the best examples of deliverables, or ...
Summary. Founded in 1990, ABS Capital Partners (ABS), an American private equity firm, focused on investments in companies across a range of industries, including business and education services, information and communications technology, and health care. The firm has raised approximately $2.5 billion since inception across several funds.