Microsoft’s Cortana Strategy Makes Sense for Them in a Way That it Wouldn’t for Amazon or Google
“Cortana needs to be that skill for anybody who’s a Microsoft 365 subscriber,” said Satya Nadella as reported by The Verge recently. This comes after a couple of years of Microsoft half-heatedly positioning Cortana as a consumer solution. With predictably little consumer traction, the idea took hold that Cortana could become a gateway into Microsoft services for the leading consumer voice assistants such as Alexa, Google Assistant, and Siri. Alexa integration is already in place. The others are likely to follow. In the enterprise, there is an entirely different calculus. Voicebot wrote in 2016 in VentureBeat and again in 2017 on Voicebot.ai that Microsoft had one clear path to success in voice: the enterprise.
The Grand Sorting of Voice Assistants
When new platforms emerge, there is a period of sorting that inevitably takes place. You can see the sorting as a series of layers and a B2B versus a B2C focus is one of the first filters. Where are your customers? Where are your assets? If you are an established company, it’s hard to move from B2B to B2C and vice versa. The inertia of your business pulls you toward your core. Your customers steer you toward what they already trust you for. Amazon, Google, Apple, and Facebook are all consumer businesses first and foremost. They must compete first where they are strong and at least three of the four have a clear strategy unfolding.
Microsoft is not a consumer business. The Harman Kardon Invoke smart speaker didn’t sell because who looks to Microsoft for music streaming and smart home skills? Zune users? That’s about how many Cortana-enabled smart speakers were sold (N.B. Voicebot has some numbers on this. They are de minimus.). However, Microsoft today is without peer in the enterprise. They are more trusted than ever because of Office, Windows, and Azure. But….
We have this other force called the consumerization of IT. Starting with Apple products nearly a decade ago, employees have been foisting consumer technologies on enterprise IT departments. The most popular consumer devices and platforms, and even some easy-to-use business tools designed from a consumer UX perspective, often gain a foothold in businesses until their enterprise peers mimic their functionality and begin pushing them out or integrating. So, Microsoft sees the popularity of Alexa and Google Assistant and figures they can be gateways to Office, Teams, and other services. Eventually, business users will figure out they can go to Cortana directly without the middleman in most circumstances and change their habits.
Microsoft Can Do This Because the Voice Platform Wars Framework Shows It Has Little to Lose
For those of you who saw my presentation at Voice Summit in person last summer or on YouTube, you will quickly realize where I’m headed. Voice assistants pose a threat to existing market share in digital distribution (Facebook and Google), transactions (Amazon), attention (Facebook), and authority (Google). Microsoft controls none of these digital domains so has nothing to lose by ceding them to rivals.
Many people think about the mobile platform wars as having two winners. However, any objective analysis suggests there was at least one more: Facebook. At one time, Facebook thought about launching its own phone, but instead become the dominant app (and then apps) on all of mobile. Facebook became one half of the digital advertising duopoly by dominating usage on iOS and Android.
Microsoft can follow a similar strategy for business productivity as a segment by leveraging voice through consumer voice assistants while providing more direct control over the user experience within the enterprise. Cortana can become a leading service accessed through the leading consumer voice platforms and a leader in the private voice platforms (similar to their Azure strategy….Hmmmm). The next step for Microsoft is to enable Cortana as a white-labeled enterprise solution. The company already has the foundation of this strategy embedded in its many cognitive services and the Cortana Skills Kit for enterprises. Many enterprises will not allow Amazon, Google, or Apple to have visibility into their internal company voice-enabled application usage. Microsoft is another matter. Nuance today dominates bespoke voice assistant solutions. Its biggest rival is bound to be Microsoft. Let the games begin.