At its annual Symposium/ITxpo in Orlando, Fla., last week, market researcher Gartner touted the idea of businesses partnering with other businesses to build “digital ecosystems,” which can create new products and services, vastly improving fields like agricultural planning, to feed a growing population, and elder care, to attend to a graying one.
Analyst Daryl Plummer said companies will have to participate in such ecosystems to ensure their success, but “partnering can become complicated, because of politics and competitive dynamics.”
Organizations will have to come to terms with collaborating with rivals, Plummer said, becoming frenemies — a portmanteau of friend and enemy — so they can tap the potential of new technologies. He gave the example of the R3 consortium of 50-plus big banks working together on blockchain, the digital ledger technology behind cryptocurrency bitcoin.
‘It comes with middle age’
In an interview, Gartner analyst Helen Huntley asked Microsoft CEO Satya Nadella how his company is able to attract business from frenemies — companies that may be competitors — on its cloud infrastructure service Azure.
“This comes maybe with middle age,” Nadella said, referring to the 41-year-old tech company he leads. He spoke over satellite from Redmond, Wash., to thousands of CIOs and other IT leaders gathered for the Gartner event. “You are very comfortable with complex relationships.” Take a company with an application that “has some overlap,” in Nadella’s words, with a Microsoft service. If that company chooses to build and manage its app on Azure, Microsoft’s responsibility is to earn the company’s trust.
“Anyone who is building on Azure is building because they know they can count on us doing the best job of creating both the best platform for them as well as the best economic opportunity for having built on Azure,” Nadella said.
Ties that bind frenemies
When asked what companies Microsoft is bringing into the Azure fold, Nadella announced a partnership with SAP. The German software company will host its employee-management service SuccessFactors on Azure.
SAP bought SuccessFactors in 2011 and has hosted the cloud software in its own data centers. The move to Azure is SAP’s first “to supplement its own infrastructure and operate SAP SuccessFactors solutions in a third-party public cloud,” according to a press statement.
SAP and Microsoft have been partners for two decades and in May agreed to integrate their cloud services — like Microsoft’s Office 365 and travel and expense management software Concur, an SAP service — for customers.
“Our competitive advantage is our maturity to deal with competitive relationships,” Nadella said during the Gartner interview. “Trust is what we engender long term.”
Nadella talked about another partnership Microsoft announced last week: the expansion of its cloud service for government. The company launched a version of Office 365 and Azure specifically for the U.S. Department of Defense and has expanded the area in the U.S. where government agencies can host their data to two new regions, in Arizona and Texas.