Cloud

The secret to Microsoft Azure's success? Finding the right customers to build for

Microsoft Azure has turned itself around, in part because of Scott Guthrie's uncanny ability to listen well to all customers, but only to heed some of them.

Microsoft executive Scott Guthrie should get credit for many things, including the success of Azure and, before that, .Net. The thing that Guthrie arguably has done best, however, has nothing to do with a particular technology, and everything to do with a particular approach to building technology.

In his words, it's all about "getting laser-focused on customer needs and [making] your customers super, super happy, " Guthrie said in an interview with Business Insider.

But not all of one's customers, and that's the key.

SEE: Cloud migration decision tool (Tech Pro Research)

Netflix, yes. Blockbuster, no

Guthrie's secret is not much of a secret—everyone talks about focusing on customer needs. The difference between great companies and also-rans, however, is how well a company can deliver on those customer needs.

Oh, and which customers they care most about.

For example, in this same interview, Guthrie spoke about the work Microsoft did with Netflix to get Silverlight (and video streaming) right. But at the same time, he was talking with Blockbuster about the same things. Blockbuster, unlike Netflix, didn't make a serious play in streaming video, and went out of business not long thereafter. Microsoft likely made more money from Blockbuster than Netflix, but it was Netflix that proved the superior guide to where Microsoft's technology needed to go.

This seems obvious in retrospect, but I doubt it was so clear at the time. In a very Clay Christensen Innovator's Dilemma sort of way, our best customers are often our worst enemies when it comes to seeing the future, and building for it. In ensuring that these high-end customers are "super, super happy," we can unwittingly over-engineer our products until we become "super, super bankrupt."

Customers in the plural

One way to ensure that this fixation with a few customers doesn't sidetrack a vendor is to do as Guthrie has done: Constantly meet with and poll a variety of customers. As he has built out the Azure business, his focus has been on looking to real customer needs, and then thinking back on Microsoft's unique, differentiated way of meeting those needs.

For Azure, this means thinking hybrid.

SEE: Microsoft Azure: A cheat sheet (TechRepublic)

Most of the cloud vendors—including Amazon Web Services (AWS)—now talk a good hybrid game. The difference for Microsoft is that it has decades of experience servicing the data center/desktop side of customer needs. There is no better company, at least in terms of background, to continue to serve that side of the enterprise so long as it can also heed those same customers as they start to reach into cloud workloads. Done right, Microsoft Azure is in pole position to "get laser-focused" on hybrid cloud customer needs, and satisfy them.

For Guthrie, this is both Netflix and Blockbuster land. For those companies that want to accelerate faster into cloud (Netflix), Microsoft can help them. For those inclined to resist or delay (Blockbuster), Microsoft can satisfy those needs while also pointing to a new, superior way to do business. The customer ultimately must choose to take those steps into the future, but Microsoft is setting itself up to be the ideal sherpa along the way.

Is this all Guthrie's doing? No. But he's a key part, and his leadership suggests a great way that all companies can figure out better methods for listening to, and buildin for, their customers.

Also see

Image: iStockphoto/cherezoff

About Matt Asay

Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.

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