Category: Microsoft

This category is for anything Microsoft related-so you’ll probably find that msot posts end up in here!

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Microsoft FY23 Financial Results


June 31st saw the end of another financial year for Microsoft and, despite there being many 1000’s of layoffs, the final numbers were very positive indeed for Redmond – yet again.

Full year FY23 results

  • Overall revenue = $211.9 billion, up 7%
  • Operating Income = $88.5 billion, up 6%

For specific product areas:

  • Dynamics 365 surpassed $5 billion
  • Microsoft Cloud hit $111 billion
  • Azure Virtual Desktop & Windows 365 combined for $1 billion

Q4 FY23 results

  • Revenue = $56.2 billion, up 8%
  • Operating Income = $24.3 billion, up 18%

Then looking at the individual business units we see:

Productivity & Business Processes

Revenue was up 10% to $18.3 billion and within that:

  • Office 365 Commercial up 15%
  • Dynamics 365 up 26%
  • LinkedIn up 5%

Intelligent Cloud

Revenue was up 15% to $24 billion and this included Azure (and other cloud services) growth of 26%. Nadella mentioned that optimisation is continuing within Azure and there were a record number of contracts over $10 million as well as the highest annualized value for long-term Azure contracts.

Microsoft Cloud

This isn’t a Business Unit but rather a grouping of various cloud products including:

  • Azure
  • O365 Commerical
  • Dynamics 365
  • Parts of LinkedIn
  • “Other cloud properties”

and this hit $30.3 billion for the quarter (up 21%) and $111 billion for the year. Satya Nadella mentioned that Azure was over 50% of this for the first time…which puts a number of just over $55 billion on annual sales for Azure. That means (according to this list) if Azure became its own company, it would be approx. the 64th biggest company in the US, surpassing Novartis, Cisco, Nike, Oracle, and Coca-Cola among others.

Earnings call comments

recognition from Copilot will be weighted towards the 2nd half of this financial year, which suggests M365 Copilot won’t be generally available until later in 2023 – perhaps October?

  • Azure Arc now has 18,000 customers, a 150% Year on Year (YoY) increase
  • Microsoft Fabric has over 8,000 trial customers
  • Viva has over 35 million Monthly Active Users (MAU)
  • EMS has over 256 million users (up 11%)
  • Teams Premium has over 600,000 seats
  • Teams Phone PSTN users increased 45% YoY to 17 million
  • Making it the “market leader in cloud calling” according to Nadella
  • Teams Revenue more than doubled YoY
  • Microsoft 365 saw a record number of $10 million+ contracts
  • They saw “particular strength” in Office 365 upsell at renewal

Things are all going in the right direction and there’s plenty of room for growth in areas like Azure Arc, Fabric, Windows 365, and Teams Premium.

See more at the Microsoft site here.

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Microsoft 365 Backup and Archive


Microsoft Inspire 2023 saw the announcement of two services that have been long awaited:

  • Microsoft 365 Backup
  • Microsoft 365 Archive

While 3rd-parties such as AvePoint, Veritas, Veeam, and SkyKick have offerings, many customers have wanted a native Microsoft product.

Microsoft 365 Backup

This provides protection and restore for:

  • OneDrive
  • SharePoint
  • Exchange

and keeps all data within the Microsoft 365 security boundary. You will be able to:

  • Backup all or select SharePoint sites, OneDrive accounts, and Exchange mailboxes in your tenant.
  • Restore files, sites, and mailbox items in your tenant in parallel to a prior point-in-time in a granular manner or at massive scale.
  • Search or filter content in your backups using key metadata such as item or site names, owners, or event types within specific restore point date ranges.

It will be accessed via the M365 Admin Center.

Microsoft 365 Archive

This will provide a cold storage tier within SharePoint for old/inactive data at a “cost effective price”. This will allow you to:

  • Select and archive or reactivate full sites in place without needing to migrate your data outside of Microsoft. File level archiving will be coming in the second half of 2024.
  • Maintain full admin-level search, eDiscovery, access policy, sensitivity label, DLP (Data Loss Prevention), retention policy, access control settings, and other security and compliance functionality.

Site-level archiving will be the only option at first until file-level archiving arrives mid-2024.

Overview

Sensibly, Microsoft have made APIs available for both services so partners (such as those mentioned above) can make use of this functionality too. Both of these new services are powered by Microsoft Syntex, a set of tools/products that is yet to truly find its place but is clearly becoming utilised more by Redmond.

You can see more info here and sign up for the previews of these products here.

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Microsoft AI Cloud Partner Program


More Microsoft Inspire 2023 news.

Just 16 months since its first rebrand in years to become the “Microsoft Cloud Partner Program”, the Microsoft Partner program is now the “Microsoft AI Cloud Partner Program”.

As far as I can see, nothing is changing within the program itself – including the Solution designations. Just as adding the word “cloud” showed Microsoft’s focus in March 2023, this clearly demonstrates that AI is going to be a key part of Microsoft’s strategy for the future.

ISV Partners can benefit from the newly available “ISV Success” program and an expanded range of benefits. ISV Success is, according to Microsoft, “the pathway for ISV partners within the AI Cloud Partner Program to access product and cloud benefits, demo and sandbox environments, technical consults to build and publish applications, and once published, sales and marketing benefits to help accelerate deals through marketplace“. One of those expanded benefits is the addition of GitHub Copilot towards the end of 2023.

See the Microsoft announcement here.

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Microsoft 365 Copilot pricing


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Microsoft’s latest AI product Copilot, which promises to be a real game changer when it comes to applying Generative AI to business, now has pricing available.

It will cost $30 per user per month and, as we saw recently, will be an add-on license to Microsoft 365 E3/E5/Business Std/Business Premium.

That’s higher than I was expecting; I thought they’d go lower to ensure as many people as possible got on-board. I know there stand to be some really great time savings and productivity increases but an additional $360,000 per year for an organisation licensing 1,000 users seems quite steep.

Of course, many organisations won’t pay that price in reality with volume discounts on EA, negotiated discounts etc. but it will still represent a large investment for many.

Bing Enterprise Chat

This has also been announced – a way to give employees a more powerful way of searching without risking data leakage. Microsoft state:

“Chat data is not saved, and Microsoft has no eyes-on access – which means no one can view your data. And, your data is not used to train the models.”

This is included in Microsoft 365 E3/E5/Business Std/Business Premium free of charge and you can access Bing Chat Enterprise using your work account wherever Bing Chat is supported — Bing.com/chat and the Microsoft Edge sidebar. It will eventually be available as a standalone offering for $5 per user per month.

See the announcement from Microsoft here.

For more news and updates, sign up to my free monthly newsletter here.

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Microsoft Entra gains two new products


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Microsoft have added 2 new products to their Entra family:

  • Microsoft Entra Internet Access
  • Microsoft Entra Private Access

Both are focused on security and protecting access to apps over the internet.

Microsoft Entra Internet Access

An identity-centric Secure Web Gateway that protects access to internet, SaaS, and Microsoft 365 apps and resources. It extends Conditional Access policies with network conditions to protect against malicious internet traffic and other threats from the open internet.

Microsoft Entra Private Access

An identity-centric Zero Trust Network Access that secures access to private apps and resources. It reduces operational complexity and cost by replacing legacy VPNs and offers more granular security. You can apply Conditional Access to individual applications, and enforce multifactor authentication, device compliance, and other controls to any legacy application without changing those applications

These 2 products, plus Defender for Cloud Apps, form what Microsoft call their Security Service Edge (SSE) solution:

https://www.microsoft.com/en-us/security/blog/2023/07/11/microsoft-entra-expands-into-security-service-edge-and-azure-ad-becomes-microsoft-entra-id/

See more info here.

The Entra line-up will soon be:

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Azure Active Directory is now Microsoft Entra ID


Microsoft have announced that Azure Active Directory (Azure AD) will, from August 2023, be known as Microsoft Entra ID.

Nothing else changes – no licensing, no capabilities, no portals etc. – it’s just a re-brand:

See the announcement here.

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Microsoft Fabric licensing & pricing


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Microsoft Build 2023 saw the announcement of Microsoft Fabric – “an end-to-end, unified analytics platform that brings together all the data and analytics tools that organizations need” by combining various products including Power BI, Azure Synapse Analytics, and Azure Data Factory.

Additionally, “Fabric comes with a SaaS, multi-cloud data lake called OneLake that is built-in and automatically available to every Fabric tenant. All Fabric workloads are automatically wired into OneLake, just like all Microsoft 365 applications are wired into OneDrive. “

To get more info about what Fabric is, check out the MS post here. To learn more about the licensing and pricing, read on 😊

Microsoft Fabric licensing

Microsoft Fabric takes its licensing model, and some of its terminology, from Power BI Premium which means parts of this may be familiar to you.

Each organisation must have 1 x “organisational” license and at least 1 x “individual” license and each subscription is broken down into tenants, capacities, and workspaces.

Organisational licenses

These provide the infrastructure for Microsoft Fabric – effectively this is what gets things provisioned in Azure so you have something to access/work with. There are 2 types which follow the Power BI Premium pattern:

Capacity – This provisions a set of resources in Azure with different SKUS providing different amounts of capacity, cores, RAM etc.

Premium Per User – Gives per-user access to Power BI elements on Microsoft Fabric, with shared capacity only.

Capacity SKUs

SKUCapacity UnitsPAYG (Hourly)PAYG (Monthly)Power BI SKUsPower BI v-cores
F2*2$0.36$262.80N/A0.25
F4*4$0.72$525.60N/A0.5
F8*8$1.44$1,051.20EM1/A11
F16*16$2.88$2,102.40EM2/A22
F32*32$5.76$4,204.80EM3/A34
F6464$11.52$8,409.60P1/A48
F128128$23.04$16,819.20P2/A516
F256256$46.08$33,638.40P3/A632
F512512$92.16$67,276.80P4/A764
F10241024$184.32$134,553.60P5/A8128
F20482048$368.64$269,107.20N/A256
Pricing of Fabric capacity SKUs at US west 2

*SKUs smaller than F64 require all users, including those consuming content, to be licensed with a Power BI Pro license.

  • The Azure “F” SKUs are billed PAYG per second
  • The P SKUs are billed monthly/annually with a monthly commitment and support Fabric being enabled on top of the Power BI subscription.
  • The EM SKUs do not support Fabric.

Individual licenses

Free – This allows users with access to Fabric capacity to create and share Fabric content

Pro – Required to create, share, and in some cases consume, Power BI content

This appears to show a differentiation between “Fabric content” and “Power BI content” – even if the Power BI content is being created within Fabric 🤔

Pricing and costs

As well as the SKU pricing above, there will also be additional costs for OneLake storage. Again based on costs in US West, the price is:

$0.023 per GB per month

That equals $23 per TB per month ($276 annually). 500TB of data in Fabric OneLake will be $138,000 per year and I feel like that’s probably a low amount of data for many organisations.

There are also potential bandwidth costs as data is accessed and moved between regions:

Managing these resources and costs can be done through a combination of the Fabric portal and Azure Cost Management:

Furthermore, Azure Reservations (Reserved Instances) are planned for later in 2023 which will make the Fabric capacity pricing comparable to the Power BI capacity pricing.

Microsoft resources

https://learn.microsoft.com/en-us/fabric/enterprise/licenses

https://blog.fabric.microsoft.com/en-us/blog/announcing-microsoft-fabric-capacities-are-available-for-purchase

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Microsoft Copilot licensing details


Microsoft Copilot licensing details are here!

While we’re still awaiting the full release, which could be July 1st or perhaps during Microsoft Inspire later that month, we do have more information available.

Eligible base licenses are:

Microsoft 365 E3
Microsoft 365 E5
Microsoft 365 Business Standard
Microsoft 365 Business Premium

And users need to have an Azure AD account too. This is a clear indication that Copilot will be an extra add-on license.

Furthermore, their M365 Apps must be on “Current Channel” or the “Monthly Enterprise Channel” to access Co-pilot.

I haven’t seen any indication of pricing yet but I’m thinking perhaps £10 for E3 and £5 for E5? With some promos at first of course.

*Update* It turns out I was way off base! Microsoft have confirmed the price is $30 per user per month. More info and examples here.

See the MS post here: https://techcommunity.microsoft.com/t5/microsoft-365-copilot/how-to-prepare-for-microsoft-365-copilot/ba-p/3851566

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Microsoft Financial Results: Q3 FY23


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Microsoft announced their Q3 FY23 (Jan – Mar 23) results recently – let’s take a look at the numbers.

Overall revenue for the quarter was $52.9 billion – an increase of 7% while net income was up 9% to $18.3 billion. The latter something of a turnaround from the 12% decrease the previous quarter.

Productivity & Business Processes

Revenue = $17.5 billion…up 11%

  • Office 365 Commercial up 14%
  • LinkedIn up 8%
  • Dynamics up 25%

A little higher than Q2 but still lower than we’ve been seeing for the last couple of years.

Intelligent Cloud

Revenue = $22.1 billion…up 16%

Azure growth was 27% again, a decent increase but continuing the ongoing shrinking of the percentage increase each quarter.

Earnings Call

Satya Nadella stated that Microsoft continue to focus on 3 priorities:

  • Helping customers to get the most value out of their digital spend
  • Investing in AI to increase their Total Addressable Market (TAM) and be the leader
  • Aligning their cost structure with their revenue growth

We are now in the era of ChatGPT and AI – an area where Microsoft are expected to do very well in the coming months and years – and Nadella stated in the earnings call that they have over 2,500 Open AI Azure customers which is a 10x quarter on quarter increase. He also mentioned that ChatGPT runs on top of Microsoft’s CosmosDB.

Further updates include:

  • Azure Arc is up to 15,000+ customers which is 150% up year on year (YoY).
  • Power Platform is up to 33 million Monthly Active Users (MAU) – almost 50% up YoY.
  • Teams has broken the 300 million MAU mark.
  • Almost 60% of Enterprise customers are buying Teams Phone, Teams Rooms, and/or Teams Premium.
  • Almost 600,000 customers have deployed at least 4 Microsoft security workloads – a 35% YoY increase.
  • Amy Hood stated that, at the end of April 23, total headcount was 9% more than a year prior.

Satya mentioned Copilot several times and, in response to an analyst question, stated that:

“We do plan to monetize a separate set of meters across all of the tech stack, whether they’re consumption meters or per-user subscriptions. The copilot that’s priced, and it is there, is GitHub Copilot. That’s a good example of incrementally how we monetize the price lists out there, and others are to be priced, because we are in preview mode. But you can expect us to do what we’ve done with GitHub Copilot pretty much across the board”

Satya Nadella, Q3 FY23 earnings call

and that gives a good idea of what Copilot licensing may look like. I think my expectation of add-ons to E3 and E5 is pretty accurate.

While Microsoft’s revenue and profits are looking great, and they’re excited about all the growth ahead of them, the shine is dimmed somewhat by 2 things: the memory of the layoffs of circa 10,000 staff in January and the recent news that there are to be no pay raises across Microsoft. Give the increases in cost of living, energy, and inflation – wages staying flat can be seen as a pay cut in many ways.

You can see all the details here.

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Microsoft Product Terms: May 2023


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Not much happening in May, this month we saw:

  • Windows To Go terms removed
  • Microsoft Managed Desktop added to the Microsoft 365 Cross-tenant User Data Migration License Prerequisites list
  • OpenAI and Azure Machine learning added to the “Azure Core Services” list and Viva Insights added to the “Microsoft 365 Core Services” list

Products in the Core Services lists will store data at rest in the same geo as the service is deployed, part of Microsoft’s data privacy practices.

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