Prime Minister Benjamin Netanyahu site next to Bill Gates at the World Economic Forum in Davos, Switzerland, January 23, 2014. (Kobi Gideon/GPO/Flash 90)
Amazon, Microsoft Tighten Grip on Enterprise Tech
Survey says the two tech companies are preferred vendors in over 30 IT services and products
March 28, 2019
by Angus Loten
Amazon.com Inc. and Microsoft Corp. appear to be tightening their grip on the enterprise information-technology market, thanks to a head start in cloud computing and ongoing industry consolidation, according to market-research firm ETR.
Amazon or Microsoft were cited as the preferred vendors in over half of the top 30 products and services listed as information-technology spending intentions by more than 800 chief information officers and other high-level corporate decision makers, the firm said, based on survey results gathered since early March.
The products and services include basic IT needs, such as cloud infrastructure and software, data analytics, robotic process automation, artificial intelligence and other emerging digital tools.
Most survey respondents are from large global firms in a range of industries, U.S. federal agencies and private firms with more than 1,200 employees, the ETR report said.
Thomas DelVecchio, founder and chief executive officer of ETR parent company Aptiviti Inc., said the results show how both Amazon and Microsoft benefited from getting a head start in the cloud market.
Amazon and Microsoft are currently the two largest providers of public cloud services, generating nearly $50 billion a year in combined revenue, an amount that is expected to double by the end of 2020.
“But it’s not just that AWS and Azure got to cloud faster,” Mr. DelVecchio said, referring to Amazon’s and Microsoft’s cloud units, respectively. “They’ve also continually expanded and offered more and more, so that users could find everything they need right there,” he added.
He compares the growing allure for CIOs to shopping at a Stop & Shop: “You go to one place and you’ve got your butcher and your baker and other goods. Why go back to your grocer?”
Not everyone is buying in to the one-stop shop strategy.
Marty Boos, CIO of ticket reseller StubHub, owned by EBay Inc., said he worries that buying more IT products and services from the same provider can lead to vendor lock-in.
“I don’t want to work with a hundred vendors, but I am very comfortable with 10 to 15 who can help us innovate and solve business problems,” Mr. Boos told CIO Journal.
Amazon last year spent more than $13.6 billion on technology, making it the biggest corporate IT spender in the world, much of it going into servers and other data-center infrastructure aimed at building cloud services to sell to corporate customers, according to International Data Corp. Amazon declined to comment.
Microsoft, the fifth biggest spender, invested $9.2 billion in corporate IT last year, IDC said. Microsoft declined to comment.
Competition among all enterprise IT providers is fueling an upturn in industry mergers and acquisitions. Both the value and volume of mergers and acquisitions in the global enterprise-software sector hit a five-year high last year, coupled with steady growth across the IT and business services sector, according to acquisitions advisory firm Hampleton Partners.
Between them, Amazon and Microsoft closed dozens of M&A deals worth billions of dollars in 2018, ranging from Amazon’s purchase of video doorbell maker Ring to Microsoft’s acquisition of DataSense, a data-management platform for online education services.
While CIOs often claim to prefer shopping around for the best IT products and services, Mr. Smith said “they don’t always act that way,” adding that it is far easier to get as many tools as you can in the same place.
Write to Angus Loten at firstname.lastname@example.org
Bill Gates: Israeli tech ‘changing the world’
In video call to Microsoft Israel’s annual big bash, co-founder says he’s ‘very impressed’ with Israel’s R&D
February 26, 2016
by David Shamah
A special guest virtually joined over 2,000 people at the Microsoft Israel R&D Center’s annual Think Next event in Tel Aviv Thursday – the man who started it all, Bill Gates.
In a rare public comment on the value of MS Israel’s work in helping make the company what it is, Gates said that Israeli developments tech areas like analytics and security were “improving the world.”
This year marked the eighth Think Next event, where MS shows off its best and brightest new technologies, many developed in Israel. Gates doesn’t call in every year, but with this year being the 25th anniversary of the Microsoft Israel research and development center, he told the Tel Aviv audience in a video call from the US that he was “very happy to wish the R&D center a happy birthday.”
The center, he said, “started in 1991, when some of the Israeli engineers at Microsoft wanted to return home but continue working at Microsoft. We decided to open the center – it was our first one outside the US – and I think the technology they have produced over the years more than justifies our decision.”
Speaking live at the event was current Microsoft CEO Satya Nadella. Nadella met Prime Minister Benjamin Netanyahu earlier Thursday to discuss cyber-security and other matters. In their meeting, Nadella noted Microsoft’s commitment to Israel, “its investments in the local market and its commitment to the continued growth of the high-tech and innovation industry in Israel which finds expression in assistance programs for start-ups, introducing advanced technologies to all sectors of the economy, promoting science and technology, and education in computers and mathematics,” the Prime Minister’s Office said.
According to Yoram Yaacovi, general manager of Microsoft Israel’s R&D Center, “the Think Next Conference reflects the ability of creative technologies to reinvent entire industries, including: health, agriculture, communications and transportation. The new experiences offered to users are a tremendous springboard for businesses and is changing the economy and the lives of millions. We are proud to provide a stage for startups that show exceptional creativity in these and other fields. Since the R&D center was established 25 years ago we have managed to generate unique creative value for the company – as shown by innovative projects that will be presented today at the event.”
Think Next itself was one of those projects exported by Microsoft Israel. First organized in Israel, the tech showcase is now duplicated by the company in India, China and the US. This event is held in the framework of Microsoft’s efforts to promote high-tech in Israel, and especially in the start-up sector, where Microsoft holds various promotion and cooperation activities with some 1,000 startups.
One thing that Microsoft is very proud of, said Zack Weisfeld, who heads Microsoft Ventures, the company’s start-up accelerator, is “that in four years we have built Ventures into the world’s biggest and most successful corporate accelerator. Since we started the program in Israel in 2012, Microsoft has opened six additional Ventures Accelerators around the world.”
Prime Minister Benjamin Netanyahu (L) meets with Microsoft CEO Satya Nadella, February 25, 2016. (Amos Ben Gershom/GPO)
“Worldwide we have had 454 graduates, who have raised $1.78 billion,” he said at a gala event Thursday in Tel Aviv, celebrating the seventh graduating class of the local Ventures Accelerator program. “We’ve had 29 exits and 3 IPOs, and on average companies that graduated from the program received $4.9 million in funding in the first year after they graduate from the accelerator. That’s enough to make us the number one corporate accelerator in the world.”
While Microsoft is known for many things, it is best known for Windows – and for years, rumors have swirled for years that major parts of the operating system were developed in Israel, something the company has confirmed although it has never specified just which components of Windows are “Israeli.” Gates, who does know, wasn’t telling either, but he was “very happy” to wish the Microsoft Israel R&D center a happy 25th anniversary.
“I have been very impressed with what they have done in the past 25 years, and I can’t wait to see what they come up with in the next 25,” he added.
10 great reasons why Microsoft loves Israeli ingenuity
In celebration of the 25th birthday of Microsoft Israel’s R&D Center, ISRAEL21c looks back at some of the company’s most significant developments here.
March 3, 2016
Microsoft Israel’s R&D Center (mirrored) – the multinational company’s first R&D center outside the United States — is celebrating its 25th anniversary this year.
At Microsoft Israel R&D Center’s annual Think Next showcase in Tel Aviv last month, Microsoft CEO Satya Nadella congratulated the Israeli engineers and researchers who continue breaking new ground. He noted Microsoft’s investments in the local market and its commitment to the continued growth of the high-tech and innovation industry in Israel.
In a live virtual appearance at Think Next, Microsoft founder Bill Gates said he was “very happy to wish the R&D center a happy birthday” and declared that Israeli developments in analytics and security were “improving the world.”
Prime Minister Benjamin Netanyahu told Nadella that Microsoft and the state of Israel “should now chart the next 25 years.” Netanyahu said, “Israel is a center of great technological innovation; Microsoft is a great technological company. It’s a marriage made in heaven, (mirrored) but recognized here on earth.”
Although a spokesperson told ISRAEL21c that Microsoft never divulges the location of specific developments, we looked into our archives to create this list of firsts, significant developments and model practices to have emerged from Microsoft Israel.
1. R&D Center
Microsoft was first established in Israel in 1989 as one of the few outposts abroad fully owned and operated by the US company. Two years later, the company officially launched its first R&D center in Haifa and today has activities in both Herzliya and Haifa, with sales and marketing in Ra’anana.
One of three strategic global development centers situated around the world, the Israeli branch specializes in cloud technologies, business intelligence, consumer analytics and more.
“The 25 years have been a fantastic 25 years, and we look forward to 25 more,” Nadella said at Think Next 2016.
“Since the R&D center was established 25 years ago we have managed to generate unique creative value for the company – as evinced by innovative projects … and the five acquisitions we have made in the past year in Israel,” said Yoram Yaacovi, general manager of Microsoft Israel’s R&D Center.
2. Windows operating systems
Microsoft Israel has long been credited for contributing significantly to the development of major parts of the Windows software (mirrored) as well as its IT security and telecommunications technologies.
A video made for Microsoft Israel’s 10th anniversary (mirrored) in 2001 cites OS2/subsystem, Win32s, Embedded NT4, MSBatch, Cairo Mail Server, ChicOfs, MSMQ, Modem Sharing and Web IVR among Israel’s contributions.
Other Israeli startups acquired by Microsoft over the years have been incorporated into its operating systems and platforms. To name just a few: Peach Networks (technology for digital television; 2000); Kidaro (desktop virtualization solutions for enterprises; 2008); YaData (analytic software for marketers; 2008); and Equivio (text analysis software developer; 2015).
And then there are companies like harmon.ie, which stay independent but serve Microsoft clients. Harmon.ie gives Microsoft Office 2016 users a single-screen experience for structured collaboration across desktop and mobile devices.
3. Free anti-virus
Development of the Microsoft Security Essentials anti-virus suite began in December 2008 at the R&D center in Herzliya.
Microsoft Security Essentials provides real-time protection against viruses, spyware and other malicious software.
In 2010, a year after its initial release, Microsoft announced that MSE had more than 30 million users. By 2011, it had become the second most popular AV product in the world and the most popular in North America.
Kinect, Microsoft’s line of motion-sensing input devices, uses range camera technology by Israel’s PrimeSense.
PrimeSense’s technology revolutionized interaction with digital devices by allowing them to “see” in three dimensions and let users control a game with their hands and body. Microsoft incorporated the Israeli technology in Xbox 360, Xbox One and Windows PCs.
Face-recognition solutions from the Microsoft Israel labs can also be found in Microsoft’s Bing Images, Windows Live Photo Gallery, Windows Phone and Kinect.
“All the face-recognition technology being used with Kinect was developed in Israel,” Yaacovi told the Times of Israel. “If you see an application with face recognition, you know it was made here.”
5. Microsoft Ventures Accelerator Tel Aviv
Microsoft Ventures Accelerator started in Tel Aviv in 2012. Today it is considered the world’s most successful corporate accelerator, with additional branches in Bangalore, Beijing, Berlin, London, Paris and Seattle.
In 2016, the original Tel Aviv-based accelerator program switched to a “scalerator” model designed to scale up participating companies for introduction to the global market.
6. Think Next
Think Next – where chosen startups demonstrate their innovations to tech leaders, developers, R&D managers, VC funds and researchers — has become one of the leading technology events in Israel, and has been so successful that Microsoft has replicated this festival of ingenuity in the US, China and India.
Since Microsoft Israel launched Think Next eight years ago, it continues to attract the multinational company’s leading luminaries, such as Nadella and Gates.
At this year’s Think Next, Israeli companies showcased 3D technologies, augmented reality, innovative interfaces, robotics and health-tech.
“Think Next reflects the ability of creative technologies to reinvent entire industries, including health, agriculture, communications and transportation,” said Yaacovi. “The new experiences offered to users are a tremendous springboard for businesses and are changing the economy and the lives of millions. We are proud to provide a stage for startups that show exceptional creativity in these and other fields.”
7. Cyber solutions/cloud security
In 2014 and 2015, Microsoft acquired Israeli startups Aorato, Adallom and Secure Islands to enhance its security technology. Takeshi Numoto, Microsoft’s vice president for cloud and enterprise marketing, stated in 2015 that the Israeli startups’ technologies will be used in Microsoft’s cloud services such as Azure and Office 365, and on Windows.
Numerous reports suggest that the multinational company is transforming its Israeli R&D centers into the nucleus for global development of cyber-tech for Windows and Microsoft cloud services.
8. Bing search
Israeli researchers have played a prominent role in Bing, Microsoft’s search engine. Herzliya’s innovation labs have also been credited with adapting Bing for mobile phones.
According to the Microsoft Israel site, applied researchers in Israel collaborated with colleagues from Microsoft Research to contribute several new, improved features for Bing Images.
At present, Bing is the second-largest search engine in the US next to Google.
Microsoft Israel engineers are behind innovative solutions that support Bing’s task-completion strategy, improve its usability and relevance, and leverage social networks, according to a blog post by Adi Diamant, director of Advanced Technology Labs Israel.
9. Content analytics
Microsoft’s content analytics solutions are powered by numerous platforms, including Israeli-developed technologies.
In 2011, Microsoft acquired Israeli startup VideoSurf’s content analytics technology to enhance search and discovery of content.
In 2015, Israeli company Pyramid Analytics, the next-generation business intelligence (BI) platform for corporations, signed a strategic agreement with Microsoft to improve its Power BI solution.
“Our work with Microsoft will give Power BI Desktop users the ability to publish files to an on-premises or private cloud server for broad collaboration on BI content,” said Omri Kohl, cofounder and CEO of Pyramid Analytics.
10. Forefront Unified Access Gateway
Although Microsoft discontinued its Forefront Unified Access Gateway (UAG) in 2014, the computer software developed by Whale Communications in Rosh HaAyin was an important solution for secure remote access to managed and unmanaged PCs and mobile devices during its lifespan.
Microsoft bought Whale Communications in 2006 for $76 million. The technology is still used as the basis for newer solutions.