Al Lalani, Co-Founder & Chief Strategist of Annex Cloud, gets together with Eumar Assis, Partner Technology Strategist at Microsoft, to discuss how leveraging critical data in golden records can help drive customer loyalty and retention.
Hello and welcome to another edition of Annex Cloud Market Movers, where we bring in experts and luminaries to help us understand how we can grow our businesses. Today, I'm very, very excited to bring in Eumar Assis from Microsoft. Eumar, welcome to the discussion.
Thank you so much for having me.
Wonderful. Well, Eumar, if you don't mind starting with a little bit of an introduction of your role at Microsoft, what you do and how you help customers and partners, that would be great to kick things off.
Absolutely. Again, thank you so much for the opportunity. Yes, here at Microsoft, I'm a Partner Technology Strategist, and I work for an organization called One Commercial Partner. And basically what I do, I work with strategic independent software vendors and software as a service providers, like you, to bring new solutions to the marketplace so we can enrich our commercial marketplace and benefit our customers.
And I've been with Microsoft from 10 years. I started in Brazil, moved here to the US six years ago. And I've always worked with software development or leading software development teams and I always focus on bringing new solutions, bringing new products to market. So, this partnership with your team has been great because we have been very connected in building new solutions together on Microsoft Azure and Dynamics 365.
Wonderful, wonderful. And as we think about how we can help customers together, one of the big discussions, especially in the CRM space, is getting to that golden customer record. And from a business perspective, that's very important to consolidate all your data into a single record, that allows you to segment off of it, that allows you to get all the customer information in a single place. But from a technology perspective, doing that is a challenging piece, because customers have lots of different systems, lots of different channels that they collect data from. I know this is a problem that you've seen across many different technology stacks that you integrate with as well as customers yourself. I mean, what are your things that you've seen that have helped from a technology perspective for people to get there?
It's a great question. And indeed, this is a scenario that is a priority for us, Microsoft, and is a priority for our customers, especially in the retail space. I like to say that technology is an enabler for the business. And when we think about the metrics that we want to improve with solutions that provide a customer golden record, we are thinking about how we can increase conversion rates, how we can understand where you allocate your advertisement budget? How do we drive brand loyalty? So, that's what we are thinking when we are trying to build solutions around the customer golden record.
And with that, in the market today, not only Microsoft, this is more a movement in the industry. This concept of a solution that provides a customer data platform, which is essentially a solution that can combine data from different data sources with different end points. How can you combine that data to provide a final source of truth about your customer?
And in fact, I was looking, I was just researching on this at Gartner, and today, the market for the customer data platform is around $2 billion, but we expect that in five years, this is going to represent a $10 billion market for ISVs is for technology providers who are building solutions around customer data platform, around a customer golden record.
Now, to your question about the challenges we have to be able to build a solution like this. It's all about being able to process data, to ingest data and process that and transform that in ways that your end user, your business users can understand. The good news is on Microsoft Azure, we have several technologies to enable you, as a business partner, as a technology partner, to ingest data from different data sources.
It could be data from social media. It could be data from different ERP systems. It could be data from your credit card transaction. So Azure Data Factory, Azure Synapse, and Azure Databricks are services on the Microsoft Azure that allow partners, customers to ingest all this data, process this data and give the business user important insights. And most importantly, how can you do this in real time with security and respecting the user's privacy?
So, that's the goal of technologies like, again, Azure Data Factory, Azure Synapse and Azure Databricks. The good news is that partners like Annex Cloud, you are building technologies on top of this platform that Microsoft provides to deliver the last mile to our customers.
Absolutely. And one of the things that we are trying to do with that last mile is bringing in the right customer experience. The right customer experience that engenders that true loyalty with that customer. And that end-to-end customer experience, from the first touch point to the last touch point, when we have the golden record together, how do we act on it and be able to improve the experience so that they will buy more often and buy bigger, thereby increasing loyalty and retention for retail and for other businesses.
One of the other things in addition to the customer golden record that is very important for our customers is being able to understand the various touch points in that customer journey and that customer journey analytics. So, understanding the different behaviors they do that can be incentivized.
So, you mentioned social, for example, and what we've seen in many cases is when customers follow you on social media, when they mention you on social media, they're your advocates. And if they're your advocates, they're more likely to buy from you again themselves in some way. Versus they may have a negative experience that they expressed on social media, in some cases, they may not be your advocates and they may be likely to churn in some cases.
So, while we have all of these touch points and analytics, I mean, this is a big data problem, there's a lot of touch points with a lot of channels going on. So, you've got the golden record, that's great. But now you've got all these interactions happening with all customers across all different systems. And I know Azure helps with bringing some of that big data together as well, but it's a challenge nonetheless. How do you foresee, from a big data perspective, building on top of the CDP to help a customer solve that type of problem using Azure?
It's a great question. You are spot on. That is another priority for us, Microsoft, and for our retail customers. And what I like to say is I believe that technologies, especially data analytics technologies, historically, they have been focusing on how can we understand what customers did? So, you're able to combine data, run your ETL process to combine data from different data sources in real time, could be social, could be different ERPs, could be transactions from different systems. That's one thing.
But when we think about all of these big data that you have, that is very challenging to process, and we have technologies on Azure that we can allow you to process that data in real time. But what I have seen a shift, a focus is how can we understand what the customers did? But how can we leverage the data we have about the past to predict what they're going to do next?
So it's not only about being able to process this large amount of data in real time, but it's how can you do, how can you collect insights from that data in real time? And how can you use machine learning models to understand what your customers could do next? And in addition to leveraging machine learning, is important to understand that customer journey analytics is not only about the data, about what customers did within your property, within your e-commerce, within your social media feed. There are other data points that you want to combine to be able to predict what your customer could do next.
Now, here's one thing. Any machine learning project, even though it's very cool, everybody loves to work on machine learning project, we understand that around 80% of the time they're going to spend on a machine learning solution is with data engineering, is cleaning the data, is collecting the data.
The good news, again, if we think about Azure Data Factory, which is a solution in the cloud, it is a data pipeline solution that allows you to build workflows in the cloud so you can define the data sources you want to connect to, the type of transformation you want to do to the data and where you want to send that data. That allows any company, especially our partners, to build solutions with our low TCO.
And when we think about Azure Synapse and Azure Databricks, these are solutions for big data analytics that allows you to, yes, connect to different data sources, but most importantly allows you to do that with an unlimited scale. It's not about just being able to process gigabytes of data in memories. How can you process terabytes, petabytes of data in memory for more efficiency?
So, I think the market is evolving very well. We're evolving from a scenario in customer journey analytics where we understood what customers did, but what they're going to do next. And I think that technologies are enabling this and the cloud has democratized how we build these solutions. And I think partners like you are taking advantage of these technologies to have a better understanding of what customers did and what they could be doing next.
That's perfect. That's great. In terms of touching upon retail a little bit, because I know you talked about retail a little bit, and I want to expand on that question more. In the environment we just came out of, retail was one of those verticals that got hit the most during the COVID process, it's still getting some of the impact as we're recording this.
And one of the things that came out of that process was a couple of things. Number one, within the retail space, retailers had to innovate very, very quickly. They had to move digital, online very, very quickly. They had to innovate with steps, which ship-to-store or using their stores as warehouses, they had to do many sorts of enhancements that took a long time to do. With that, comes the need for stronger technology. And I saw it in the announcement around the Microsoft Cloud for Retail and helping support businesses to bring it to the cloud to essentially enable them with faster technology innovation. Could you talk a little bit about Microsoft's focus around retail and how you were trying to help customers within that space?
Absolutely. Yes. The Microsoft Cloud for Retail or the Microsoft Retail Cloud was announced at NRF Chapter 1 in January this year. I just want to be clear, this was not a response for COVID-19, because this is actually the second industry cloud. We call this Microsoft Industry Cloud. So, healthcare was the first, and retail was the second.
And the idea there is very simple, we want to help you, partners, and Microsoft customers to understand how can you leverage all the great technologies we have within Microsoft, including Microsoft Azure, Dynamics 365, Microsoft 365. How can you combine those technologies to solve specific industry use cases? For example, like you mentioned, how can you allow a scenario to buy online and pick up at the curbside, or pick up at the store? For you to build a solution like this, you might need to leverage Azure, Dynamics 365 and Microsoft Teams.
In terms of what is delivered in the Microsoft Cloud for Retail, this is about a set of best practices, documentation, reference architecture, and recommended partner solutions that help deliver that use case. It is not about bundling, creating a pricing bundle for all of these technologies. This is something we are evaluating to do in the future, but I wanted to be clear, this is about how we can combine Microsoft technologies to build and solve an specific use case.
And just to be very practical, the good news is that when we announce these industry clouds, we actually try to launch new cloud services that are very specific to certain industries. For example, in healthcare, when we announced the Microsoft Cloud for Healthcare, we announced the Azure API for FHIR and the FHIR connector for IOT. So these were cloud services that enabled more data transparency, more data sharing in healthcare, those were the technologies we announced when we created the Microsoft Cloud for Healthcare.
And then, right now, with Microsoft Cloud for Retail, we actually made some enhancements, we announced new services. For example, we have added B2B, business-to-business, capabilities within the Microsoft 365, Microsoft Dynamics 365 Commerce. And we also announced that we are working on the Common Data Service, the Data Service for Retail.
So, this is just an idea how we are trying to simplify for customers to leverage all these great cloud services we have in Microsoft to solve specific use cases. And when we do that, one of the things that is very important for us is to also recommend partner solutions that are aligned to those specific industry use cases.
That's great. And I think that's a good segue into the next step, which is one of the ways that you work with partners, like Annex Cloud, from a loyalty perspective, lots of other partners is through the commercial marketplace. And that's a great way for partners to be able to get their solutions and present their solutions on the marketplace and allow customers and customers of Azure to be able to know that these exist, that the integrations exist, and that they can and be evaluated. Could you talk a little bit about how the marketplace helps customers to learn about partner solutions like us?
Sure. This is an area that is very close to me. I'm very focused this year and in previous years on driving customers should leverage the Microsoft commercial marketplace and help partners like you to onboard into the Microsoft commercial marketplace. So, what is the Microsoft commercial marketplace? And probably some of you, who are watching this, you already know. So let me explain to you.
So, the Microsoft commercial marketplace is where Microsoft customers can go to search, try and buy solutions that are built by our Microsoft partners. And the commercial marketplace has two storefronts. The first storefront is the Azure Marketplace, and that is storefront is more focused on solutions that are targeted at IT professionals, developers. The second storefront is Microsoft AppSource. That one is more focused on the business users and in industry solutions.
So, these are the two storefronts we have today. We are very intentional in that segregation, because we want to your solution to be where your targeted users are. And the good news here for our Microsoft partners is that once your solution is available in the Microsoft commercial marketplace. First, we understand, it gives your customers confidence that Microsoft has at least reviewed the partner solution.
Second, once your solution is in the commercial marketplace, you can attend what co-sell ready, and what that allows, it allows Microsoft partners to work with our field sellers, with our sellers, to try to promote your solution within our joint customers. And once your solution as a partner is available in the commercial marketplace, it also gives you an opportunity to work with other partners. So, other partners can, let's say, be part of your sales process. They can help you evangelize your solution with their customer base.
The final point, which I believe is one of the most important, the marketplace is also a way for you to simplify the onboarding process and to simplify your sales process. In the marketplace, we have an offer, a type of solution that we call Get It Now, or transactable, and what it does, it allows our Microsoft customers to pay for partner solutions using the agreements that they already have with Microsoft.
So, for you as a Microsoft partner, who is on the Microsoft marketplace, you are simplifying the paperwork, perhaps these are customers that you did not have interactions today, you did not have a business relationship today, and because the customers already have a relationship with Microsoft, it allows you to transact more quickly.
And the third point in allowing your sales process, enabling a better sales process, it can also allow you international expansion. Perhaps you are selling your solution here in the US today, and you want to expand your solution to Latin America, to Europe. You could leverage the commercial marketplace as the mechanism to allow that expansion and work in partnership with Microsoft field sellers and Microsoft partners. Yep.
I think that's great. And then just, I want to learn a little bit more about the Microsoft partners part of it, because it's part of the ecosystem, right? To enable our common customers that choose our solutions on top of the Microsoft stack, either through the marketplace or otherwise, would need eventually to work with a systems integrator potentially to help it all come to life, configure the Microsoft solutions, configure the Annex Cloud solutions to make it work. Maybe work on some integrations or customizations or other things that may be needed in an enterprise environment. How do systems integrators work with ISVs and Microsoft within this environment together do to bring the whole stack together for the end customers?
Sure. Our CEO, Satya Nadella, he has always said that Microsoft will always be a partner-led company. And what that means is that it allows us to scale through partners. And for you to be able to scale exponentially, one of the things that you can do is to enable partner-to-partner connections. So you, as an ISV, as a software, as a service provider, you have experience building the products, building the use cases, but we have other type of partners that we call solution integrators that they already have very good working relationship with customers in different industries.
They are already know how to connect to different data sources. They already know the regulation in some countries. So, what we are trying to enable is to allow companies that are very software-focused, that build SaaS solutions, we're trying to enable them to connect with solution integrators who are very experts in, first, establishing the business relationship with the right stakeholders. And second, they are able to integrate, they're able to connect to different data sources and then create that connective tissue between partners who know how to integrate with different data sources and partners who can provide a finished SaaS solution on top of that data.
And when we think about it, Microsoft is also trying to make this P2P process something more programmatic. And again, here is where we see the relevance, the importance of the Microsoft commercial marketplace. When I mentioned that in the commercial marketplace, we have an offer that is transactable. The good news is, if you as a partner, as an ISV, you have an offer that is transactable in the commercial marketplace, we allow you to work with other Microsoft sellers, Microsoft resellers, and Microsoft solution integrators who are part of the CSP program, the Cloud Solution Provider program. We allow them to sell your solution.
So, what that means is now you have the entire Microsoft channel of SIs and resellers available to sell your solution. Again, this is important, not only for you to scale your sales team, but scenarios, especially around international expansion, we have seen a good traction on leveraging the Microsoft commercial marketplace as the mechanism to drive those P2P connections.
Perfect. Eumar, I think this was a very, very interesting discussion. We went from going through business problems like the customer golden record to the customer journey analytics into how ISVs can work really well together with Microsoft in both launching and scaling their solutions, as well as bringing it to customers together to enhance the partnership.
We are very excited obviously to kick off and scale our partnership with Microsoft around loyalty to add to the Dynamics 365 stack and grow it much beyond in retail, as well as other industries. But we want to thank you today for taking the time to speak with us. And before everyone else, if you want to listen to more such videos, go to annexcloud.com/marketmovers. Eumar, thank you again and bye for now.
Thank you so much. Thank you for the partnership and thank you for everything you do for our customers. Thank you.
Co-Founder, Annex Cloud
Senior Technology Strategist, Microsoft
Since 2010, Annex Cloud has provided industry leading loyalty solutions to more than 250 leading brands and retailers, including Jenni Kayne, Hewlett-Packard, Bed Bath & Beyond, e.l.f. Cosmetics, Olympus, Sugarfina, Mizuno, MacKenzie-Childs, VF Corp., with the ability to engage tens of millions of their customers one-to-one at scale.
The Annex Cloud platform provides fully integrated Customer Loyalty, Referral Marketing, and User Generated Content (UGC) solutions that seamlessly work together to optimize the customer journey and deliver a unified customer experience that is designed to accelerate revenue growth, retain valuable customers, increase average order values (AOV) and drive repeat order frequency.
Microsoft Corporation is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services. Its best known software products are the Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers.
To learn more about Microsoft, visit microsoft.com