Specialist
Former executive at Microsoft Corp
Agenda
- Microsoft (NASDAQ: MSFT) Power Platform’s operating environment and competitive positioning vs key players across the platform’s offerings
- Primary growth drivers and opportunities for Microsoft’s automation and low-code application development products, including Power Apps and Power Automate
- Trends in cloud adoption and Microsoft’s ability to compete with smaller, specialised offerings
- Platform go-to-market strategy and pricing strategy around bundling offerings such as Power BI
- Innovation, industry trends and 2023 outlook
Questions
1.
Could you outline the Microsoft Power Platform offerings, including Power Apps, Power Automate and Power BI? What are the core use cases?
2.
For Q1 FY23, Microsoft reported 15 million MAU [monthly active users] for Power Apps, up 50% YoY, and over seven million MAU for Power Automate. Earlier in 2022, Charles Lamanna, who reports for Microsoft on Power Platform, said that Power Platform was a USD 2bn business with revenue growing 72% YoY. What is a rough estimate of the revenue contribution of each of the Power Platform offerings? How do you see that revenue split changing over the next two years? What trends may drive this?
3.
You said the revenue breakdown is roughly 60% for Power Apps, 20% for Power Automate and 20% for Power BI. Given the different rates of change in these businesses and the commoditisation that’s happening in Power BI, how do you see that split changing in 1-2 years?
4.
There is no doubt Microsoft’s platform approach is helpful in what you’re discussing, especially as companies are trying to reduce their tech stacks. What do you see as significant or glaring gaps in the Power Platform offering or Microsoft’s offering in general that you think need to be incorporated into the roadmap?
5.
It would be helpful to break out the competitive landscape for Power Apps vs Power Automate. Looking at low-code application development, you mentioned players such as Appian. What win rates would you see when Power Apps comes up against these players in the marketplace? What’s really driving those wins or losses?
6.
How would you say the value proposition translates into win rates vs low-code competitors?
7.
Could you speak to the progress Microsoft has made in developing more advanced capabilities for Power Automate’s process mining and bot integration? What about the company’s March 2022 acquisition of Minit, the significance for Microsoft’s tech stack and general progress on that front?
8.
You mentioned that, for existing customers for low-code offerings, the Power Platform win rate vs Appian or K2 is around 50-60%. What about the win rate for automation vs UiPath and Automation Anywhere for existing customers?
9.
Could you speak to win rates for Power Platform vs larger competitors and SaaS companies such as Oracle, SAP and Salesforce?
10.
How should we think about sizing the TAM for Power Platform and how do you characterise the platform’s growth over the past year? What primary drivers should we consider, especially given the impact of an incoming recession?
11.
Where are the most significant cost savings in ROI that get factored into purchasing decisions? As a factor onto that, how well is Microsoft marketing the Power Platform, especially in a recessionary environment? How is the company getting visibility into the fact that this is a cost savings tool?
12.
You mentioned working on quantifying ROI through purchasing cycles. Could you estimate what kind of ROI customers would see from when they’re looking at procurement cycles for the Power Platform?
13.
Could you quantify the average ROI customers see for Power Platform?
14.
What is the typical spend of a larger enterprise client vs mid-sized client on Power Platform?
15.
Looking at stickiness and reasons for churn, can you discuss recurring revenue and what the net retention rate is for the Power Platform?
16.
Could you discuss the pricing strategy and bundling? What does Microsoft win on with pricing vs competitors, and by what percentage?
17.
As it stands now, who is undercutting whom on price?
18.
Would the 50-60% win rate for existing customers for Appian and K2 be similar for Mendix, or would it be lower?
19.
What’s your view on acquisition opportunities for Microsoft’s Power Platform? What type of company profile do you think represents an attractive M&A target?
20.
What are your thoughts on the current Power Platform management team and its strategy? Is there anything that you think it should be doing differently?
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