Microsoft Corporation (MSFT) Earnings Call Transcript & Summary

Hello, and welcome to Microsoft Inspire, the largest partner event of the year. I'm Angela Chee.

And I'm Jennifer Zarate. Today begins 2 days of learning, discovering and connecting with fellow partners, Microsoft experts and industry pros.

This event is for you, our partner community, we'll hear from Microsoft leaders about the road map for the year ahead, learn about new opportunities to develop and expand your business, and we've got a lot to celebrate along the way.

To be a Microsoft partner is to be part of a global community dedicated to empowering customers. And one way we're doing that here at Microsoft Inspire is by checking in with some of the groups of partners gathering to watch this event all around the world. But more on that a little later. Angela and I are at Microsoft Studios with a beautiful backdrop of the Seattle City scape on the screen behind us.

Throughout the event, we'll focus on some key themes sure to be on the minds of you and your customers alike, things like innovation through modernization as well as the hybrid work model.

Plus, we're all about helping to securely scale up and drive growth for you and your customers. Clearly, there is a ton in store over the next 2 days.

And we're here to bring you all the action. We're also keeping up with you on social media, make sure you use the #MSInspire to be part of that conversation.

Plus periodically, we'll throw some questions in our chat to learn more about you. So make sure you're registered and signed in.

We know you want to get the most out of Microsoft Inspire; you can start by attending as many sessions that interest you. So let's head to the session catalog? All sessions, including keynotes, on-demand sessions and connection zone are listed here. Easily add them by clicking ad to schedule over to the right of the session description.

Interested in specific topics, search sessions by keyword or use the refined results function on the left to filter by things like start time, session type track or solution area. You can add as many sessions as you'd like, including sessions from Synology on their license free backup services and Citrix, which can help your employees work securely from anywhere.

All the sessions you've saved to your backpack can be found in the Sessions and Backpack tab at the top of the page. This is a great way to get a snapshot of what you've got coming up and the on-demand content throughout the show. Speaking of sessions now is our chance to welcome our partners from all over the world to highlight some of the great innovations and developments they've made. You'll be able to hear firsthand from their experiences and maybe even get some inspiration of your own.

Our connection zone sessions and breakouts will shine the spotlight on Microsoft partners who worked with our own experts to come up with new solutions for a wide range of challenges.

Find some live sessions that will be helpful for you and then add them to your schedules right now or just add them to your digital backpack and watch them whenever you want.

You'll be able to hear firsthand from companies like F5, Intel, [ Kyndryl ] and NVIDIA. Be sure to check out our feature partner showcase. You'll learn from some of the best in the business and see how you can use what they've learned to help with your own solutions, too.

Again, just click feature partners at the top to dig in more in-depth to the content and add whatever you would like to your digital backpack. We're just getting started here from the Microsoft Inspire studios. Coming up, we've got a full schedule of keynotes and theme-related sessions designed to drive growth, power innovation and streamline the latest solutions for you and your customers.

You'll be hearing from Microsoft experts and partners alike as they showcase key programs and opportunities for you to grow your business in the year ahead.

All that and more is coming up soon. But first, it's time to hear from Microsoft Chairman and CEO, Satya Nadella. This is Microsoft Inspire.

Good morning, and welcome to Inspire. It's great to be here with all of you. And I want to start by saying a big thank you to all our partners for all you continue to do to help our customers, especially, especially during a time of so many constraints. Every day, 400,000 partner organizations around the world are applying technology to make a real difference: one country, one community, one customer at a time. You're helping to make small businesses more productive, nonprofits more effective, multinationals more competitive, governments more efficient, improving health care and educational outcomes and creating economic opportunity and creating jobs. That's what makes this partner ecosystem so unique. Over the past few years, we have talked extensively about digital transformation. But today, we need to go beyond that from talking about digital transformation to delivering on the digital imperative for every organization. The time is now, it's what will make the difference between organizations that thrive and those that get left behind. Every organization in every industry will continue to infuse digital technology into every business process and function so that they can do more with less. The case for doing this has never been more urgent or more clear. In fact, I would say it's existential. The next 10 years are not going to be like the last 10. Digital technology is a deflationary force in an inflationary economy. It's the only way to navigate the headwinds we are confronting today. This is not some abstract concept. There are many examples across every industry. In fact, just 2 weeks ago, I met with the CEO of a CPG manufacturer who explained how they were able to use our technology to increase throughput of operations in a Latin American plant and use the savings to avoid raising prices and address one of the greatest challenges facing the region, food and security. And I know you'll hear a lot more from Judson tomorrow about how Coca-Cola bottler in Europe has used our technology to lower their energy consumption, the other crisis we are facing today. Doing more with less doesn't mean working harder or longer. That's not the way we're going to scale. But it does mean applying technology to amplify what you are able to do across an organization so you can differentiate and build resilience. And it all comes down to how we can help you use the Microsoft Cloud to help your customers overcome today's challenges and emerge stronger. No other cloud offers or breadth or depth. No other cloud offers, not just best-in-class products, but best-in-suite solutions across the entire deck stack. Today, I'll highlight 5 digital imperatives for every organization to do more with less and how we are creating new opportunity for you. Let's dive right in. It starts at the infrastructure layer. Leaders in every industry are accelerating their migration to the cloud. And it's not just lift and shift, 95% of new digital workloads will be deployed on cloud native platforms by 2025. IT and OT are coming together. And the cloud is foundational to how organizations will be competitive going forward. Every customer I speak with is clear eyed about aligning their IT investments to scale with demand and moving to the cloud allows them to just do that, converting their spending from CapEx to OpEx. This creates an opportunity for all of you to help organizations by providing your expertise. It's all about helping customers drive operational efficiency, deliver faster time to value and reduce costs. You can measure success by how much compute you're using and how efficiently you're using it. I can't say this enough. It's all about doing more with less. Across our offerings, we offer the best value at every stage of the cloud migration. To just share 2 examples. It's up to 80% less expensive to run Windows Server VMs on Azure and SQL Server VMs on Azure than it is with our main competitor. It's not just about cost. We offer unique capabilities to simplify VM management and SQL Server compatibility to easier move and are significantly investing in migration and modernization programs to help customers move forward with confidence. We are building the next-generation multi-cloud, multi-edge infrastructure to support this. It starts with Azure as the world's computer. We have more data center regions than any other cloud provider. And I'm excited to announce that over the next year, we will launch 10 new data center regions in 10 markets, spanning 4 continents, delivering faster access to services and helping address data residency needs. Sustainability and all this is going to be key to our approach. We are adding new capabilities to address our data centers, to reprocess used equipment drastically reducing waste. In fact, we are committed to reusing over 90% of our cloud computing hardware by 2025. Servers might find a second home in schools or job training programs and the reclaim memory cards might be used in electronic toys or game systems. A critical aspect of our strategy is to work closely with local partners to meet the sovereignty needs of public sector customers in specific markets, including Arvato and SAP in Germany, Leonardo in Italy, Proximus in Belgium, Orange and Capgemini in France and Telefonica in Spain, just to name a few. Today, we are going even further to help partners around the world serve public sector customers. We are announcing the Microsoft Cloud for Sovereignty, which provides policies, controls and technologies that will enable customers to meet a government-specific data sovereignty security and privacy requirements. It's all built on what we have come to expect from the public cloud: improved resiliency, agility, cost and scale economics. This builds on our innovation with Azure Confidential Computing, which is already helping customers bring their most sensitive workloads to the cloud. New Azure confidential computing capabilities, including the ability to encrypt data, while it's in use without changing your application, make it easier for you to work with customers in regulated industries. With new confidential virtual machines as well as Azure confidential ledger, your customers can have more confidence in their data is being protected during its entire life cycle. The combination of our core capabilities around confidential computing and sovereignty make our cloud very unique. And our differentiation goes beyond that. With Azure Arc, you're bringing the power of Azure anywhere so that you can build apps with Azure services that can run across on-premise, edge and multi-cloud environments. With Azure for Operators, we're bringing computing to the 5G edge. We have the largest partner ecosystem of anyone in the industry, helping to deliver the next-generation private wireless solutions. And together with our partners, we are extending our infrastructure beyond our planet with Azure Orbital, unlocking scenarios like earth observations for precision farming, global communications for remote connectivity and the satellite fleet operations for sending commands to orbit in real time. And today, we are announcing our new Azure Space Partner Community to help partners scale their space solutions on Azure. Intelsat, for example, is connecting its satellite network to our cloud, helping customers create private LTE and 5G networks in some of the most remote corners of the world. Noah is working with our partner, Explore, to extend the mission life of their satellites and reduce costs using Azure Orbital ground station as a service. They're using Azure Orbital with Explorer's mission control software platform to transmit commands to Noah's polar orbiting weather satellites. This ubiquitous fabric from 5G to space will enable a new generation of modern connected applications that will create opportunities for our partners to transform entire industries and more than 95% of the Fortune 500 trust Azure for their most mission-critical workloads. Leaders in every industry use our cloud infrastructure today. A great example of this is Proctor & Gamble, which last month chose or Cloud to digitize more than 100 of its manufacturing sites around the world with the goal of increasing productivity and sustainability across its operations. They're using our technology to build a new IoT platform that will analyze data from production lines, including production runs, downtime, changeovers and more to build the future of digital manufacturing, connecting the back office to the retail store and empowering employees to do more with less, more impact, less time, money and effort. Now let's talk about empowering Pro and citizen developers and our approach to digital and app innovation. Today, every company is a digital company. In fact, there's more demand for developers in some key industries like public sector, education, energy, retail, entertainment and transportation than even the tech industry itself. This represents a tremendous opportunity for all of you. Organizations are eager to equip fusion teams of Pro and citizen developers with best-in-class tooling so that they can scale their impact together. And they're eager to adopt DevOps, which is fast becoming the default way to deploy code to production, creating massive opportunity for all of you to help them adopt these new processes. From Azure DevOps and GitHub to Visual Studio, we have the most complete platform and the most trusted cloud to help developers go from idea to code, code to cloud and cloud to the world. GitHub is where innovation of tomorrow is being built openly, securely, instantly and automatically. Every step of the way by being cloud first end-to-end, GitHub brings an unparallel developer experience and costs up to 30% less when compared to our major competitor. With GitHub, you get the best of both worlds, affordability and scalability. 90% of the Fortune 100 use GitHub up today, both digital natives and the world's most established enterprises from AT&T to GE build software on the platform. Take Mercedes-Benz as an example. Software development isn't something they do on the side. It's core to the company's value-add. 20,000 employees of the company, more than 10% of the total workforce use GitHub as their central development platform to build, ship and maintain software. And with our Azure PaaS services, organizations can build modern, more resilient cloud-native applications. Azure Container Apps is a fully managed serverless container service for building and deploying modern apps at scale. H&M has used container apps to modernize more than 750 applications, many of which were built as web apps with databases. We are committed to Java and are helping organizations modernize their Java application portfolios with Azure Spring Apps Enterprise, which we built as part of our expansive partnership with VMware. FedEx, for example, is using the service to run all their Java apps at massive scale predicting the estimated time of arrival of millions of shipments. And we're not stopping there. By 2025, 70% of new applications deployed for the enterprise will use low code or no code tools up from less than 25% in 2020. With Power Platform, we have the leading business process automation and productivity suite for domain experts in every industry with 20 million monthly active users. We're taking a pretty unique approach to what is an expansive and high-growth market, bringing together robotic process automation, low-code, no-code tools, virtual agents, website building and business intelligence into a common platform for building end-to-end business solutions reducing complexity as well as cost. Customers can save 80% or more compared to major competitors. And we are seeing ISVs integrate power platform into their own solutions. Adobe, for example, is embedding power automate into Acrobat sign so that users can automate the document workflows directly from within the app itself. They can generate documents at scale and easily route agreements across stakeholders and systems. Quite frankly, in this time of constraints, not everyone can invest in large complex systems. But with Power Platform, anybody can have an incredible impact in an organization. And when you combine power platform with our pro developer tools like GitHub, it allows fusion teams to come together to do much more. Both pro and citizen developers can contribute to the same repo and pro developers can extend their apps with Power Platform, too. And to be clear, it's not just one app or one workflow or one automation. It's all about accelerating digital capability building across every function in the organization. In fact, the number of organizations building center of excellence around Power platform has grown exponentially over the past few years. Leaders in every industry, including AB InBev, ARM, H&M, Lumen Technologies, PG&E, [ Rabobank ], Toyota, Vodafone, ZF Group, Zurich Insurance have all built centers of excellence in partnership with many of you to train employees at scale in how to use Power platform. PG&E, for example, partnered with Cognizant to launch and scale use across 9 business units with the goal of eliminating redundant and manual processes from employee workflows. It saved an estimated 75,000 work hours with an another 645,000 hours in savings to come. And they're not alone. Let's take a look at what happened at Globo, the biggest media and TV company in Brazil, which has worked with our partner ecosystem, including partners like Bay Matrix, Cumulus and ProNext to launch and run its Power Platform center of excellence. [Presentation]

I just love the community they are built around Power Platform. What a great example of how Fusion teams have been able to use our tools to do more with less. Now let's talk about data and AI. It's all about 2 things: getting your data estate in order and applying large AI models as platforms. That's the dual challenge. This is the age of AI. The core business logic is no longer just being written by developers, it's being written by software. In fact, by 2025, 10% of all data will be produced by generative AI models. Analytics is moving from back-end processes to being a critical part of the product experience. And so how are you using this intelligence? How are you helping your customers translate it into more predictions, more insights, more actions, more automation? It's hard to overstate the opportunity. What we are seeing is the convergence of previously disparate categories. We are the only company that has a complete data fabric from the operational stores to the analytics engine to data governance with our Microsoft Intelligent Data platform. Let me be super clear. This is not just about best-of-breed, it's about bringing the best of suite. This allows organizations to spend more time creating value and less time integrating and managing their data estate. Just think about the time and effort that goes into aligning your operational stores and analytics with new regulations. Or just imagine the total cost of ownership, if you try to do all this integration on your own, analytics alone or our intelligent data platform is about 4.8x faster and costs up to 59% less than other cloud analytics vendors. Today, 70% of the Fortune 1000 use 2 or more of our data solutions, and we're seeing leaders from every industry, from AT&T and KPMG to Manulife unify their data and reduce costs using our tools. Walgreens was able to achieve 3x the performance at 1/3 the cost when it migrated to our data platform for their analytic needs. When it comes to AI, we're seeing a real paradigm shift as the world's large AI models become powerful platforms themselves. In Azure, we have built the most powerful AI supercomputer in the cloud, and we've used it to train these large state-of-the-art AI models. But it's not enough to talk about these models, it's about applying them. We are building models as platforms in Azure so that you can apply these advances to any use case, including some of the biggest challenges we face as a society today. Orsted, which produces 1/4 of the world's wind energy, along with our partner, Cognite, has used our tools to turn data from its offshore wind turbines into insights for predictive maintenance. Let's take a look. [Presentation]

What a great example. And I just love the impact they've been able to have with our technology, once again doing more with less. Now let's turn to the next digital imperative and our approach to modern work and business applications. Hybrid work is here to stay. 73% of the employees would like the flexibility they've experienced during the pandemic to continue. And at the same time, 67% say they want more in-person time with colleagues. It's clear that flexibility in well-being are nonnegotiable as new patterns emerge. We all need to consider 2 things: first, the change in where and how people work and how this impacts every business process across the organization. And second, how automation is supercharging collaboration. Technology can help us navigate this change. Every organization requires a digital fabric that connects people, places and processes, and this creates a massive opportunity for all of you to help make hybrid work, work. We are the only cloud that supports everything an organization needs to make this shift. Think about all the hybrid work solutions your organization is required today, meetings, chat, phone, scheduling, project management, cloud storage, analytics and automation, and the cost and the complexity that goes along with adding, deploying, managing each of them. Microsoft 365 brings all these solutions together into one integrated experience that makes work easier and smarter for employees and customers can save more than 60% compared to a patchwork of competitive solutions. When it comes to people, it starts, we're taking a new approach to collaboration, both inside and outside the organization. We need to be great at sync, async, in-person and remote collaboration. In a previous era, you could get away with 1 or 2 of these quadrants, but now you need all 4 quadrants to be excellent at any given time for work to get done and collaboration to happen. Across Microsoft 365 and Teams, we are innovating to support all the way people work. And today, we're announcing many, many exciting new features to make this possible, including collaborative annotation so that you can engage on any content presented with screen share in Teams meetings, video clip, so you can capture and edit a shot personalized video message and Excel live, which allows meeting participants to edit Excel files directly from a meeting window itself without needing to leave Teams. We also need to prioritize the employee experience. When work is increasingly happening anywhere, anytime, the employee experience needs to adapt accordingly. It needs to be digital-first, connecting every employee wherever they are and whenever they are working to facilitate engagement and retention. That's our goal with Microsoft Viva, which is now being used by more than 1,000 organizations as their digital employee experience platform helping employees feel more connected to their company's mission and culture. Viva brings together communications, communities, knowledge, learning, goals and insights right in the flow of working teams. I'm so excited in particular about Viva Goals, which creates a different form of alignment across a team or organization. It brings business goals into the flow of everyday work. Think about how powerful that is. When all your objectives and key results are shared across the organization, everyone becomes [ a line ]. Viva Goals will be generally available next month. In the new world of work, it's more important than ever to connect people across the organization wherever and whenever they work so everyone feels included and invested. It's why we're introducing Viva Engage, which helps employees build community spark engagement with leadership, harness the knowledge and answers and build their own personal networks. It includes new experiences like story lines, so you can create and share what you're passionate about, discover and follow colleagues and leaders and find answers to questions. We're also expanding Viva to include new modules for specific functions starting with sales. We have connected Dynamics 365 with Office and Teams to harness customer and business data and use it to supercharge the systems of record. Viva sales help sellers capture information about what has happened between customers and salespeople across the entire Microsoft 365 suite. Their Outlook mails, Teams chats and bring it right into a CRM tool they use every day, eliminating the burden of manual data entry. It ensures sales leaders have one unified view of activities while removing the friction of sellers keeping their CRM systems up to date. Our approach extends to where people work, in person or remote, so you can unlock productivity wherever you are. Space, in fact, is the ultimate collaboration tool that we have refined over a 200-year period. We're not going to trade it away but we are going to use it very differently. With Teams' rooms, we are bridging the gap between people working remotely and those in the office with innovations like front row in partnership with OEMs, including Jabra, Hadley, Logitech, Poly, Yealink, we are delivering intelligent cameras designed to enhance the presence of people and teams rooms, with AI-powered speaker tracking in-room cameras can detect who in the room is speaking and cameras are capable of producing multiple video streams allowing in-room attendees to show up as individual feeds to remote attendee so that every person can be seen and identified clearly ensure which participants are in person and which are remote. This is so useful to ensure every meeting attendee is always a first-class participant. It's also why I'm so energized about Windows 365, which is designed to help organizations empower their workforce to be more productive and connected regardless of their location. Between Windows 365 and Azure Virtual Desktop, you have the most diverse set of options so everyone can work how and where they want. It's been 1 year since we launched Windows 365 right here at Inspire. And it's been amazing to see how so many people and organizations are using it to power hybrid work. Customers like LEGO Group are using Windows 365 to help interns and vendors rapidly onboard and collaborate with the internal teams from their first day on the job. And partners like ScanSource and IMS Solutions have helped businesses from BPO American adopt Windows 365 to make it possible for call center employees to work remotely while improving their security posture and reducing infrastructure costs. We continue to expand where and how Windows 365 can be used. And today, we are excited to announce the Windows 365 will soon be available for the U.S. government and government contractors. Our approach to space extends to the metaverse and how we are bringing together digital and physical worlds. We're taking a software-led approach so that everyone can benefit from these experiences regardless of what device they're on. That's what we are building with [ Mesh for ] Teams, which I've been using internally and is accessible from anywhere on any device, including VR headsets, HoloLens, tablets, phones as well as PCs. This secular change extends to every business process. Consider marketing, sales, customer service, supply chain, finance, all the critical everyday functions in an organization. Think about this. If Teams is where we work, we will want to access everything right there in the flow of work, giving back our most scarce resource, our time. And the software required to manage these mission-critical business processes must move from traditional ERP, CRM and supply chain management systems of record to be much more data collaboration in AI first. Teams, along with Power Platform and data works, are powering this across all enterprise business applications. Today, over 1,500 third-party applications are available on the team's app store spanning every industry and business function. More and more ISVs are generating millions in revenue from customers using apps built on Teams. And for our SI partners, collaborative applications are the most common starting point for modern work transformation programs. Leading third-party ISVs, including Adobe, Atlassian, Figma, Salesforce, SAP, ServiceNow, Workday have all built deep integrations with Teams, helping customers bring every business process and function directly into the flow of work. To share just one example, Maersk is using ServiceNow on Teams to streamline daily work and create great employee experiences directly within teams. Dynamics 365 is purpose built for this new world of business process. Our intelligent business applications connect data process and teams ushering in a new era of hyperconnected business and offering unparalleled value. Customers can save up to 50% compared to our major competitors. And today, I'm excited to announce the Microsoft Digital Contact Center Platform, which brings together Dynamics 365, Azure Communication Services, Teams, Power Platform and Nuance into one open, extensible and collaborative platform to deliver seamless omnichannel customer engagement. Today, siloed data systems along with high interoperability and maintenance costs too often get in the way of best-in-class personalized customer experience. Because our digital contact center is a single unified platform, it reduces cost and allows instant visibility into trends across all service channels. For instance, consider a customer service agent at HP who takes a call, they're able to automatically authenticate the customer based on their voice instead of a pin or password. They're able to see the health of the account at a glance. They can instantly see topic pages related to the customer-specific questions. And with Teams integration, they can swarm with subject matter experts across the organization to resolve escalations. We're also working closely with SIs and ISVs such as Genesis and NICE to give customers the choice they need to support their digital contact center or transformation strategy. When we make every day experiences collaborative, we can bend the productivity curve for an entire organization. It's why I'm excited to see so many customers and partners leverage teams as an organizing layer for a new class of collaborative line of business applications. I believe these apps could become the biggest breakthrough drivers in today's labor market because they bring both knowledge workers and frontline workers together in the context of their communications and drive the next level of automation and productivity. More than 80,000 of these apps have been created by organizations in every industry. Take United Airlines, which built a new scheduling solution within Teams. Let's roll the video. [Presentation]

It's so great to see how United has made a scheduling tool collaborative, enabling them to do more with less. Now let's turn to our final imperative. Security is the top priority for every organization undergoing digital transformation. The numbers are quite stark. Businesses are experiencing an increase in both the volume and sophistication of cyber-attacks. Cybercrime is now expected to cross the world $10.5 trillion annually by 2025. We're bringing together technology, threat intelligence and human expertise to provide a comprehensive security compliance and management solutions that empower you as our partners to solve security challenges for our customers of all sizes across all industries on any cloud and any client platform. We integrate more than 50 security product categories from insider risk management to endpoint protection once again reducing cost and complexity. And on average, customers save more than 60% when they turn to us compared to a multi-vendor solution. Our solutions are informed by more than 24 trillion threat signals each day. It starts with Microsoft Entra, our new vision and portfolio for identity and access. It extends to Microsoft Purview which is the future of compliance and data governance; Microsoft Priva, which includes new capabilities to help your customers manage privacy; and of course, Microsoft Defender and Sentinel. We are the only cloud provider with multi-cloud protection for the top 3 platforms. And recently, we announced new protections in Defender for IoT. So you can help customers discover and secure their enterprise IoT devices like modern printers and smart TVs. It's never been easier to extend our customers' protection to cover all of IoT. And with Microsoft security experts, you can tap into our own threat researchers. Our expertise is now your expertise. We see organizations around the world relying on our security solutions to protect some of their most mission-critical data, including the International Committee of the Red Cross, which has worked with our partner, Elka to use our technology to reunite families in the midst of a humanitarian crisis. Let's take a look. [Presentation]

What a powerful story. Everything I've talked about today accrues to the Microsoft Cloud. And tomorrow, you'll hear more from Judson about how we are expanding our opportunity for partners with our industry clouds as well. The Microsoft Cloud is the only cloud that allows you to take advantage of both best of category products as well as best of suite solutions across the entire tech stack in every area that matters most to our customers so that they can do more with less. We want to be the best partner for our partners. And we are investing in your success. We are committed to helping you better meet customer needs by helping you gain specializations and deep technical training across all the solution areas I've talked today. We made it easier for you to engage with us and drive your own profitability, which is why we lowered our marketplace transaction fee from 20% to 3%, so you can invest more deeply in your own growth. And today, we are announcing additional investments, including free access to our best-in-class developer tooling to help ISVs build and publish their apps faster. The numbers speak for themselves. Partners who bet on us, grow faster and generate higher margins. And for every dollar in revenue we generate, partners who build differentiated software solutions on the Microsoft Cloud generate $10 more. But it goes beyond that. We want you to be successful so that you can help the world around us be more successful. It's never been more important to connect what we build to what the world needs us to build. This is our collective purpose. Each year, our Partner of the Year award winners exemplify what's possible when you connect technology to the challenges of our customers and the world. And I want to close by sharing one story of a partner that has used our tools to make a real difference in New South Wales, Australia. With homelessness on the rise, our Partner of the Year Community Response winner used Power Platform and Dynamics 365 to provide better services to people in need and better visibility to policymakers. Let's take a look. And thank you all so very much and enjoy the rest of Inspire. [Presentation]

Hi. I'm Nick Parker, and I truly appreciate everyone for joining from around the world. I'm honored to be here with you today at such a critical year in our company's 47-year history. The cloud-first transformation has never been more apparent than now. It's big, it's bold, and it would not be possible without the reciprocal push and pull with all of you driving for game-changing innovation. As we evolve and differentiate our cloud capabilities, we continue to accelerate across solution areas, providing new and exciting opportunities. I'd like to build on Satya's comments and provide you with a deeper understanding of how we sell and the opportunity that this creates for us together in serving customers. First, by taking our technology to market across the solution areas, we're able to help connect with an authentic tailored approach. Second, solution areas are the competitive advantage of our new partner program. We're helping you maximize value for your customers with designations and specializations and our industry clouds help meet the needs of your customers across every industry. Last, this unwavering commitment to your success is a top priority as you maximize customer value. In these times of economic, health and medical uncertainty, it's inspiring to see partners helping society, communities, schools and people in need by providing solutions, devices and support so that millions of people can learn and work in new ways. Our partners are the foundation for our global scale and impact. And so I'd like to sincerely thank you all for making the difference that you're making. Our mission is to empower every person and every organization on the planet to achieve more, and it's only possible with your help. Microsoft Cloud is the foundation, the most trusted and comprehensive cloud. As part of our cloud offering, our solution areas help deliver customer value across the technology stack. We offer you cloud technology, innovation, go-to-market scale and platforms for you to create differentiated products and solutions to our shared customers. We are the only company that provides partners the unique opportunity to build and sell end-to-end solutions in every industry. When are we at our best? When technology is the servant of our customers' business. That's why we've invested in the breadth of our portfolio and our 6 solution areas. It takes an open, integrated and trusted cloud to deliver customer success and that's a new path forward across industries that the Microsoft Cloud is leading. In addition, our industry clouds provide the tools you need to create deeper industry-specific solutions, vertically integrating the Microsoft Cloud to deliver differentiated value by industry: Microsoft Cloud for financial services, health care, manufacturing, nonprofit, retail and sustainability. This is where we work closely with our ISV system integrator and services partners to create deep industry-focused solutions that create new customer value. In our third quarter results presented this past April, you may have noted our intelligent cloud revenue increasing by 26% to $19.1 billion. And this is a testament to the work we're doing together to help customers adopt the cloud, seizing new opportunity and reducing risk. Now that we've discussed what we sell across our industry go-to-market approach, let's transition to how we sell. By taking a closer look at the depth and breadth of your environment, you can gain perspectives on future capabilities. Partners that define purpose and embrace change have the opportunity to reinvent products, infrastructure and operating models in a way that we have clear potential to drive growth, create new competitive advantages and help our customers leverage technological innovation. Last week, during our internal annual sales meeting, we spoke with all of our employees focused on sales and delivery around the world. The dialogue was focused around a multidimensional metaphor that represents how we sell. We think about our commercial customers as rooms in the house and how we take our products to market across solution areas. Customers in different industries need different solutions, and we've been very strategic with the solutions-focused approach as we've built this concept of the rooms of the house. As you look at each room, you'll see the solution areas across the bottom and specific roles in an organization across the top. This is how we approach targeted conversations about how technology can accelerate our customers' progress, driving the top line, while lowering the bottom line. We ask our sellers to focus on solution plays that align to customer scenarios for each solution area and industry. This is our approach to deliver new value to customers. You can add value on a floor and open a door by building trust and understanding with the customer and at the same time, learn more about the customers' needs and desires in the process. So from rooms in the house to floors in the building, from floors to opening doors of opportunity, this is an unmatched opportunity for us to provide value together for our customers. In fact, I can say with trusted confidence that we provide this opportunity like no other. There's no other company that can do what we do at this scale and scope with you, our partners. There's no other company investing the way we're investing this next year to help customers as effectively on as many levels as we are with you. In this environment, the Microsoft Cloud is the essential component to why we should all be excited about the expanding flows of opportunity that we have in the building representing our customer. We want to share the same priorities with you as we have with our sellers while going to market together. You'll hear more about our prioritized solution plays in the breakout sessions. We also have go-to-market engines to help scale your solutions to millions of customers around the world. Some of these programs include co-sell, marketplace incentives and more. You'll hear much more about this from the Nicole Dezen in a bit. There's tremendous opportunities with our rooms of the house approach and as you partner with us to build solutions on the Microsoft Cloud. We build and strengthen our relationship with our partners on trust as people seek trusted business partners. Microsoft has the most diverse and innovative technology. And by bringing the edge and the cloud together, we're taking world-class tech intensity and innovation to new places, end-to-end. Customers' needs are delivered through cutting-edge tech allowing them to work and live productive, efficient and safe lives. The rest of today's sessions will focus on our solution areas and how we take solutions to market with you. Tomorrow, we'll focus on industry, our industry clouds and the opportunity for you, our partners to create industry-specific solutions for customers together. In preparation for tomorrow and to put our industry cloud and opportunity in perspective, I spoke with Alysa Taylor, who leads industry apps and data marketing. Hi, Alysa. Nice to see you here.

Thank you, Nick. Thank you for having me.

So I think we're going to spend a few moments on industry. And so it's obviously great to be talking about it because something we're both very passionate about.

Very much so.

So maybe I'll kick it off with the kind of the big question, which is -- and so why is industry so important to us here at Microsoft?

Well, I would start with saying industry has been important to us. I think that's part of our history. And it goes to our desire to deeply understand customers and what customers need. I would say how we go about industry is evolving and has started -- we're starting a different approach. And it really comes from how fast every industry is evolving. I mean, if you think about just the sheer -- even pre-pandemic, what's been going on with industries, organizations need to be able to be agile. They need be able to realize faster time to market and they need to future proof. And so we have really started to think about just beyond solution areas and how our solution areas are supporting customers in every industry, really build on that and build new technologies, new capabilities with the Microsoft Cloud for industry that will accelerate that time to value will help future proof. And I would say, even most importantly, really provide a foundation for our ecosystem to be able to be successful with our customers. And so all of this investment that we're putting in the industry isn't new. It's just it's a continuation of our deep commitment to our customers and to our partners. It's just how do we continue to evolve as the market evolves and the industry has evolved.

Yes, I love that. And I think I see it as both a deepening need from our customers, of course, they're asking the things as well as us seeing new opportunities that we can both innovate with our partners as well as our customers to seize opportunity or reduce risk. And so maybe that's sort of leads on to a very natural second point, which is, why now? What are the opportunities now? What are the specific things that, of course, that we're seeing both in the world as well as inside Microsoft that make this such a great opportunity?

Well, it's exactly as you said. When you think about the rapid shift that we're seeing. Even if you look at industry, like if you take retail, again, pre-pandemic, the bridging of the physical and digital health care, having to be able to deeply serve patients in very unique ways in manufacturing, automation and the digital factory. These are all things that were completely new focus areas for industry. And then you layer in a pandemic that just sped up. And so again, retail curbside pickup, that didn't exist. Virtual appointments, supply chain and having supply chain visibility. And so why now is because we have just seen the pace of change happened so rapidly. And there's this unknown of what's happening in the future. And so how do we support our customers, how do we -- and I would say that's a we of Microsoft with our ecosystem so that they can rapidly evolve and also create this digital foundation that sets them up for what's next.

And I think, again, building on how you're talking about how we are serving our customers, how our customers are coming to us with their needs particularly for our partner audience, they're very, very interested to how we do that.

Yes.

Because, of course, that creates opportunity as well as its new ways for us to deeply understand our customers and clients together and serve them together. So maybe let's have a little chat about the things that we're doing to serve our customers differently.

Absolutely. So when you think about our partners, I would say most of our partners, as you deeply know, have been industry first. And so when we think about how do we actually meet our partners where they're at so that they can build the best vertical solutions, the best delivery lines, we've invested across, I would say, the entirety of our go-to-market with an industry mindset. So things like how do we continue to evolve our sales team so that they can effectively co-sell with our ecosystem. What does our delivery look like from an industry standpoint? Our support services, even marketing, how are we doing marketing in a way that is very deeply rooted in what customers need and is industry-specific, so all of these things, I would say, are a natural evolution, but a deepening of investment across the entire life cycle of our go-to-market to be industry -- continue to be more and more industry relevant and more and more customer-centric.

Yes, that's something that I'm very excited about. Obviously, leading IPS, as I see the successes that we've had with our partners and our customers with our account teams that have gone so deep into understanding how customers can apply our technology both in a solution area level, which is very deep application of the solution area technologies for their specific industry facing their specific opportunity or risk as well as starting to leverage the unique investment in the innovation, of course, from the industry cloud. And I think as we go forward to this year, we'll see more and more of those account teams lining up to deeply understand those customers' needs in their industry and then apply our technologies. Of course, that creates opportunities for our partners to engage. And the other thing I would say is I think we're getting better at the methodology of how we think about this application is working with this industry in very unique ways and how do we actually work with our -- all the way through the sales cycles as well as the delivery teams to make sure we have that deep competence and we can accelerate the time to value for customers with our partners. So I think...

That connection point.

Exactly. And it's actually important that we become more structured in how we do that because it makes it more predictable for our partners, but also for our customers that really want to seize these digital opportunities that build their resilience in these challenging times as well as help them seize new opportunity as technology is opening new doors. So maybe kind of as we close out here, how are we seeing partners do this today? You and I get to see lots of customer and client success. And so maybe pick a few of your -- or a couple of your favorites, where you've -- it's really sort of stuck out as a great blueprint that we've all learned from.

Well, I think a great example of what you were talking about of that architecture of the life cycle and getting more deeply connected across every facet. A great example is an ISV Teladoc. So as we talk about the rapid evolution of health care and the onset of needing to be able to do virtual appointments, Teladoc actually building on the Microsoft Cloud has a solution that allows health care organizations to virtually care for their patients and have a rapid iteration and connection point, patient engagement. And what I think is unique and very great example is that Teladoc not only is using our technology to provide this. But if you think about our health care teams, our health care teams are leading with Teladoc as the solution for virtual appointments. And then Teladoc is deeply integrated into our marketplace, into our solution center so that it is easily and rapidly deployed into our customers' tenants. And so to your point about we're -- there's a fantastic solution that meets the customer need. We have our sales teams co-selling with our -- one of our key ISVs and then everything from delivery to solution to support is lined up to support our health care customers and Teladoc as a great solution in that area.

That's a phenomenal example. I think it's a phenomenal example, both of 2 of our partners that provide very unique deep industry value. But actually also, when we get the structure right of how we all work together, we can provide really fast time to value for the client and the customer. And we also have all of our teams working in unison together with the customer at the center. So as you said, from our account teams that are working deeply with the health care customer all the way through our partner teams that are bringing Teladoc, Accenture working with them, who, as you say, are already deeply in the verticals. And then, of course, our industry specialists that bring us through all the way through to delivery and then leaving the customer happy, so. Yes, it's a great example. And I think it's those kind of structures and archetypes that we will really see a massive acceleration. As you know, we're investing more and more in people, in heads to be on our customer site that will all have a very specific vertical focus as well as getting more and more structure with how we work with partners across the sales life cycle as well. So.

And I think that's the -- as we think about the technology we provide, the infrastructure that we provide, all of this adds up to I think being what our goal is and our mission as a company and being more and more customer-centric and helping our customers. So it's all -- I think it's a great evolution. And then I'm really excited to be partnering with you as part of this journey.

Yes, it's going to be a great year. And of course, we'll be here talking to customers and partners throughout the year, and I'm sure we'll have lots more fun news of success to share. So thank you so much for being here.

Thank you, Nick.

Thank you. Thank you, everyone, and I hope you can gain new insight and see opportunity for your business and your customers in these next 2 days with us here at Inspire. Thank you so much.

Hello, everyone. I'm Kathleen Mitford, Corporate Vice President of Azure Marketing. It's my privilege to be here today to share with you the enormous opportunity we have ahead. You, our partners are incredibly vital to helping our customers succeed. So before we dive in, I want to express my deepest gratitude to you as our amazing partner community. I also want to take a moment and congratulate winners of the Partner of the Year Awards, well done. As customers look across the entire digital estate to modernize, they're turning to cloud experts to help navigate through the digital transformation journey. Our mission is to support them through all of that, empowering everyone to invent with purpose. Our customers are reshaping and reimagining every part of their business. Today, 72% of customers say their industry's pace has accelerated because of the pandemic. And we don't expect that to slow down anytime soon. The key themes we're hearing from customers reinforce that trend. First, cloud has become the power for innovation where customers build new products and offerings that help them stay competitive. Second, they're not just looking for technology. They're looking for a trusted partner to help them navigate new complexities and challenges as they move toward the cloud. And third, they want to know their cloud provider is putting security, data privacy and compliance first. Microsoft at its core is a platform company. We're here to help you and your customers succeed. You provide the differentiated industry solutions, and we provide a platform with global scale and unquestioned enterprise strength. Through Microsoft Cloud, you have a unique opportunity to serve every customer need from infrastructure to business applications, data NAI, security and productivity. And Azure is the foundation of the Microsoft cloud. So what does that actually mean for you? It means nearly every company in any industry on the planet is within your reach. With Azure, you have an opportunity to drive more leads, shorten your sales cycle, ink more deals and achieve 155% ROI within 3 years. Before I joined Microsoft, I was a partner for many years and experienced this opportunity firsthand. But don't just take it from me. Let's hear about these opportunities from your peers. [Presentation]

I don't know about you, but I'm so inspired when I see partners innovating and helping our customers. Now every year, we evolve our Azure business priorities based on market trends and what we hear from you and customers. This year, we took a fresh look at what used to be called sales place. We evolve them to be more customer-centric solution plays, which are squarely focused on business outcomes. These are the opportunities where together, we are uniquely able to provide the greatest value to our customers. Customers are looking to reimagine their business. This is a terrific opportunity to bring your tailored industry expertise and solutions to complement Azure's cloud native innovation. Customers also need help building out their modernization road maps. With a powerful application platform, combined with an intelligent data platform, Azure gives you everything you need to be the hero here. And finally, migration, migration, migration. It's still early days, and customers continue to shift their IT budgets and workloads to the cloud. This is our highest volume, quickest to revenue opportunity. And Azure is the best cloud that enterprises trust for all their workloads. Let's get into each of these opportunities a little more. To help us do that, now I'd like to invite Jessica Hawk, Corporate Vice President of Data, AI and Mixed Reality to kick us off. Over to you, Jessica.

Thanks, Kathleen. As a former Microsoft partner myself, I know it's all about seizing opportunities and driving growth, especially in a competitive market. Let's start with one big opportunity for our mutual growth, which is helping customers innovate with cloud native experiences. And let me tell you this opportunity is huge. It's been projected that between 2020 and 2023, 500 million net new cloud native apps will be built. And that isn't growth that's going to happen someday, it's happening right now. Microsoft Azure offers incredible opportunity for innovation with app developers starting with app services like Azure Kubernetes and Azure Containers, which can significantly reduce development cycles. And we all know that no application is being built today without intelligence at the core. So we all need the native capabilities of Azure that allow you to build intelligent apps leveraging cognitive services and machine learning and our innovative database services like Azure Cosmos DB, which allow you to scale dynamically and deliver a consistent user experience around the world. And this is why so many ISVs and enterprises are turning to Azure for their cloud native applications. I can tell you that the most lucrative projects you can work on in Azure are custom, Tier 1 cloud native apps leveraging the entire platform. The opportunity is right now. To share more about why you need to seize this opportunity, let's hear from Russell Sloane, Director of Digital Services from one of our European partners, Kainos. Hi, Russell, thanks for being here today.

Hello, and delighted to be here.

So to get us started, can you tell us a little bit more about Kainos and your recent project with the international organization for migration?

Yes. So this is the first pilot for an AI-enabled translation portal. And when we think about tech-enabled video communications, language can sometimes be a blocker. So our current solution translates 7 languages into a possible 31. So we've been working closely with the Microsoft AI team supporting AI integration in the back end, while Kainos been looking at the user experience to make this a service easy to use. So we've can use them as our cognitive services including Azure cognitive search. And that's really provided a rapid proof of value and help assess the longer-term ROI with potential pits into Microsoft Dynamics 365. So when you think about the impact, this could be rolled out to up to 20,000 of the AUM colleagues and potentially impact minis and migrants to day support each year.

So tell us a little bit more about why you chose to develop all of these applications on Azure.

So we believe that cloud scale platform services as there are -- let's just focus on things that matter for our customers. And that's business that comes is digital transformation and it's changed. Fundamentally, Kainos is an engineering company, and we believe that no other organization has invested so significantly in the [ end-to-end ] developer experience in Microsoft. When we think about VS Code to GitHub through the DevBox and is there up service, is there a cognitive services? Is there Kubernetes, Cosmos DB, is there is an expressed way of innovation. The other thing is Microsoft's Global [ PRASM ] allows us to deploy services they're approximate to our users.

And so looking forward, what's next for Kainos? How are you creating new experiences for your customers?

I think when you look at the pace of progress, customer expectations have fundamentally changed through the COVID-19 pandemic. New services have been delivered in weeks, days, sometimes even hours. We want to leverage native cloud technologies to do this sustainably and maintain the pace of progress. Modern applications are becoming more intelligent. They're more than just services to collect and present data to users AI predictions, new insight and new features become prevalent in all of our services.

Thanks, Russell.

Thank you for asking me along.

So great to hear from Russell. And I think he shared some great insights on why you need to expand your practices to take advantage of the incredible cloud-native opportunity. So let's turn to the next opportunity for growth, which is helping customers modernize their existing applications and data estates. And this is such a high priority for customers. 59% of business leaders see app modernization as a top initiative. We see tons of custom applications built on dot net or Java, for example, using Azure App service and Azure Spring apps. Azure Spring Apps enterprise built in partnership with VMware, opens up a new opportunity for you to modernize Java Spring apps. And on a similar note, there is still a lot of data on-premises across open source and commercial databases. Data alone is a $34 billion opportunity. And apps and data go together. So the number just grows from there. Our goal is to help you seize this opportunity and close deals to modernize the application and data estate even faster. And that's why we announced the Microsoft Intelligent Data platform a few months ago at Build. We really believe this is a game-changer for both our field sellers and our partners. This is about how we talk about the better together value of the products in our databases, governance and analytics platform. The Microsoft Intelligent Data Platform has help partners like you can spend more time creating value rather than focusing on how to integrate and manage a customer's data estate. With this integration, you can power applications at any scale, get actionable insights from all the data available to you and properly govern data wherever it resides. Your opportunity with the Microsoft Intelligent Data Platform is to help customers think bigger. How are they going to get value from their entire data estate versus investing in siloed point solutions. We want to bring this message to even more customers so that we can go after this modernization opportunity together. And that's where our partner ecosystem can become our greatest strength. So let's hear from global partner, Tata Consultancy Services, to learn more about how they're taking advantage of this modernization opportunity to help more customers and grow their business. Hi, Jay, welcome to Inspire.

Thank you so much, Jessica. It's great talking to you.

Can you tell us about why your customers are accelerating their application and data estate migration and modernization journey?

I think the primary reason is the business innovation and agility. Today, the customers are having their fragmented data platform and these silos of the data is inhibiting them for being able to utilize this data effectively. So that's one of the primary reasons. The second reason is mainly associated with all the benefits that cloud brings in comparison to on-prem that is on the basis of faster time to market, cost, efficiency and the scalability that this data platform provides -- our modern data platform provides for our customers. And the third is the seamless integration of the various data platform components.

So what stood out about Azure from your standpoint?

I think why Azure is primarily for its well-integrated intelligent data platform with his ability to consume the transactional data so as to be able to create the intelligent applications and then consuming it further into the larger ecosystem, which I personally believe is the unique differentiator for the Azure over other hyperscalers.

And can you tell us a little bit about the success with your recent project with Walgreens? Has it led to new business for TCS?

For Walgreens, TCS worked with them to create an intelligent data platform. The primary reason for creating such an intelligent data platform because in their current prescription dispensation system, they were having a siloed approach of having separate prescription data, storage process and delivery. What it was leading for them was unnecessary complexity cost, an extra work to process some of these prescriptions. At times, this used to take about 2 days to deliver some of these prescriptions. TCS is working with Walgreens what we created. We utilized some of the Azure services such as Azure Databricks, [indiscernible] to capture the various data points which today helps various stakeholders, including the pharmacists to use these business insights generated from the data into conducting their business better than what they were able to do previously.

Jay highlighted 2 big opportunities I want you to take advantage of. First, invest in your practices to help customers migrate and modernize with Microsoft Azure. And second, invest in your intelligent data platform go-to-market and delivery team so that you can help customers realize the integrated opportunity across data, analytics and governance. And with that, I'll hand it back to Kathleen to share more opportunities for you and more ways we are investing in your success.

Thank you, Jessica. Let me pick back up with a topic that is close to my heart and super relevant to the opportunities that Jessica just talked about. Hybrid. Even customers with longer-term plans to fully get to the cloud might have some workloads that need to remain on-premises for some amount of time. We know that 93% of enterprises are committed to hybrid deployments for their on-premises, multi-cloud and edge workloads. A highly differentiated offering that sets us up to win big with hybrid, Azure Arc. Arc is a bridge that extends the Azure platform, so you can work with customers to help them innovate wherever they are from on-premises to the edge. Our ask of you is to extend all your practices and offerings to include hybrid. Now let's talk about the opportunity we have with migration. Clearly, migrating customers to Azure is our biggest near-term revenue opportunity with lots more growth ahead. Only a small fraction of global IT spends are in the cloud at this point. Cloud IS is where we see the largest shift from on-premises to cloud in terms of IT spend. This is also the foundational layer on which everything else sits, so it's really important to get it right. Let's go through the top workloads with the large migration opportunity, Windows Server and SQL Server. This is a must win for us. Tens of millions of Windows servers still run on-premises today, a vast majority of which also run SQL Server. As a time-sensitive migration trigger, we just hit the SQL Server 2012 end of support milestone this week with Windows Server 2012 following next year. And Azure offers unmatched value for customers with these massive workloads. Also, a lot of Windows SQL workloads run on VMware, which presents a great opportunity to guide customers to Azure VMware solution. Linux. The Linux migration opportunity is huge, and we're seeing tons of Linux usage and growth on Azure. For fiscal year '23, we will closely partner with Red Hat and [ SUZA ] to move their on-premises installed base. Let's talk about independent software vendors, or ISVs, that are moving their apps to the cloud, all to improve speed and efficiency and how they deliver solutions to their end customers. A great example is ACI Worldwide. An industry leader in real-time payments, ACI provides scalable, highly secure software solutions for the financial services industry. ACI had a fully on-premises environment with Linux, but found their current architecture couldn't unlock the full value of their software solution. The scale of the cloud, coupled with the ability to use highly efficient open source solutions like Linux on Azure has helped them ignite speed to market and deliver on their mission. ACI is just one example of an ISV who's transforming. We're working with thousands of ISVs to help them satisfy their offerings on Azure, accelerating there end-to-end customers' business and tech transformation journey. I want to talk about another large migration opportunity, virtualization. Hybrid work continues to drive demand for cloud solutions. There is a great revenue opportunity with Windows 365 Cloud PCs and Azure Virtual Desktop Cloud VDI to address this here-and-now customer need. We're investing heavily in making Azure the best place to run Tier 1 mission-critical workloads like SAP. SAP migrations are key to accelerating the transformation of core business processes to the cloud. This sets customers up to create even more innovation on top, things like integration with Microsoft Teams or Power Platform or security. I'm so excited to share today we're announcing the Azure Center for SAP solutions. This new cloud service gives partners and customers an end-to-end unified experience for deploying and managing the SAP solutions on Microsoft Cloud. And thanks to our partnership with Oracle, we have great options for you to help customers modernize their Oracle workloads, including the unique Oracle Cloud Interconnect available only with Azure. So let's make this the year of migration, keep driving migrations aggressively as a key growth and revenue driver in fiscal year '23. The Azure Migration and Modernization Program, or AMMP, is our hero customer program to simplify and accelerate all of the opportunities we just highlighted. [Presentation]

Our goal is to ensure every opportunity has a partner attached to it, and AMMP is how we achieve that. We're making some investments and updates to AMMP that will drive scale and velocity, things like richer incentives, a new partner nomination experience, simplified approvals and payouts and updated best practice guidance with Azure's cloud adoption and well architected frameworks. My ask to each of you, lean in with AMMP and utilize all the program has to offer to help accelerate our mutual customers' migration and modernization journey. Another area of investment, helping ISVs achieve their goals no matter where you are in your journey, whether you're migrating, modernizing or creating new applications, we are here to help you build for the future. Now I'd like to welcome Anthony Joseph, our Vice President of Marketplace and ISV Journey to talk about how we're helping ISVs build with the Microsoft cloud and scale through the commercial marketplace. Hi, Anthony, welcome.

Hi, Kathleen, thank you. I'm excited to be here for my first Inspire.

We're so excited to have you here with us today. Anthony, can you tell me for ISVs that are watching, what is the one thing that they should take away from Inspire?

I'd love to. Essentially, the headline is this: Microsoft is deeply invested in every ISV success. Our customers need more SaaS and consumption-based services than ever before. You gave a great example earlier about SaaS-ifying with ACI and with the Microsoft Cloud, ISVs can build for just about any emerging customer need.

Anthony, I couldn't agree more. There is so much opportunity for any company to build and sell with the Microsoft Cloud. Can you share a little bit about what are the specific investments that we're making to help ISVs?

Yes. Our teams have been working hard, and we're so excited to officially announce the ISV success program. With this new offering, which is in private preview and part of the broader Microsoft cloud partner program, ISVs can get support to build across the Microsoft Cloud inclusive of Azure, Microsoft 365 business applications, Power Platform and our end-to-end security suite. And we will provide go-to-market support through our marketplace. Access to this program will be broadly available soon. We're so excited.

Anthony, with great news for the ISV community to see that we're so invested in their success. Can you tell us a little bit more about this program? What does it entail? How can an ISV get started?

ISVs can get support, whether they're migrating from another cloud, considering a multi-cloud approach, refactoring an application or modernizing a legacy app. To support these various scenarios, the ISV success program includes a comprehensive package of benefits, specifically designed for ISVs. This includes cloud credits, developer tooling, access to Microsoft technical and business resources and more. And the ISV success program will help ISVs optimize their solutions to sell through our marketplace whether they are selling through our digital channels, our partners or with Microsoft sellers.

So Anthony, it seems like the ISV Success program, it has the marketplace at its core?

Yes, marketplace is the starting point to connect our partners to our customers. It enables us to match and market make with our core set of cell with resources. As ISVs build on a Microsoft Cloud, they can go to market through our marketplace, helping them reach millions of potential customers around the world with a lower cost of acquisition. With the ISV success program, ISVs can unlock the potential and the power of the Microsoft Cloud through the marketplace.

Thank you so much, Anthony. Where can ISVs go to learn more and to sign up?

Great question. They can learn more and sign up at microsoft.com/isv.

Awesome. Thank you so much for joining me today.

Thank you, Kathleen.

Partners. This brings our time together to an end. I want to close the way I started with a big thank you for a tremendous year. I am beyond excited for what lies ahead and our enormous opportunity to migrate and modernize our customers' digital estate together. Here is to a great year ahead.

As Kathleen eloquently stated, we are here to help you and your customers succeed. You provide the differentiated industry solutions, and we provide a platform with global scale and unquestioned enterprise strength. Next up, we'll hear from our newly appointed Chief Partner Officer, Nicole Dezen. I had a chance to sit down with Nicole to hear about the journey that led her to this role and get a perspective on the evolution of Microsoft's relationship with our partners since she began her tenure at the company. Nicole, congratulations on your new role. I thought it would be fun to introduce you as the new leader of our partner business, our Chief Partner Officer, to our partners here at Inspire.

Thank you so much, Nick. I'm absolutely thrilled to have this opportunity to lead this incredible organization and to work with and on behalf of our entire partner ecosystem. This is a role that I've been working towards for what seems like most of my career, and I'm really honored to be taking over from the legacy that you're leaving behind as you move on to your new role as well.

Nicole, you and I have worked together for a long time, and it's been great building so many successful partner businesses together. Maybe if you could share a little bit about your Microsoft journey and your philosophy as a leader.

Yes. We had definitely worked together quite a long time, and it's been an absolute privilege to do the jobs that I've been able to do here at Microsoft and to lead such phenomenal teams. My Microsoft journey started in our enterprise commercial business, working with one of Microsoft's global customers. And from there, I moved to Redmond to join our device partner business, and I've worked in our partner business ever since then, with roles in Redmond, Singapore and in the U.K. Leading the device partner business for the past 2 years has just been an amazing experience. I'm so passionate about our partner ecosystem and how I can help our partners envision their business in new ways, while at the same time providing unparalleled empowerment and support through their adoption of Microsoft technologies so that they can deliver the best solutions to our customers. Now as you know, I'm a big believer in the power of mentoring and coaching. I'm really committed to being an ally and an advocate using my voice to strengthen our industry's commitment to diversity and inclusion, Throughout my life, I've really benefited from having mentors, you're one of them. And those are people that saw things in me that I didn't even see in myself yet. Those mentors helped me recognize my strength and guided me through really challenging situations and helped me to achieve so many of my big goals. And finally, while this sounds pretty simple, I believe fundamentally in Microsoft's mission of empowering others and it's at the forefront of my professional vision and something that guides my journey as a leader every single day. I am surrounded by so many wonderful, empathetic and creative people who really deliver powerful impact to our partners and to our business every single day. How could I not be inspired by that?

I love that. Maybe share a little bit about how you've seen the relationship between Microsoft and our partners evolve through your journey.

Yes. Well, I mean, you know this really well. From the beginning, Microsoft has been a partner of first company. And as Microsoft's portfolio has grown, we really increased our focus to best ensure that our partners can access all of the innovation we create through our R&D investments as well as to deliver their own services and solutions on top of that innovation. Our priority with partners is to ensure that they can build profitable durable businesses on our platform and that the combination of our investments in R&D and go-to-market are unique differentiators for our partners. Finally, customer need is at the core of the work that we do with our partners. This ensures that the solutions that we build a market and sell together are serving customer needs in a way that no one else in the industry can. And we do this across all of our solution areas and all customer industries.

So here's another question for you. With such extensive experience working with our partners, as you take on this new leadership role, what's top of mind for you in the year ahead?

I'm really excited about what lies ahead in our fiscal '23 for Microsoft and for our partners. Our strategies and priorities are the foundation for how we grow and scale this partner ecosystem. And I'm really committed to helping our partners realize the full potential of opportunities that are available to them when we work together. For me, what's most top of mind in fiscal '23 will be continuing to deliver impact to our partners in 3 unique ways. First, by delivering cloud innovation. Through the Microsoft Cloud, we provide the most comprehensive end-to-end tech stack with lasting impact for our partners in support of their customers' digital transformation. Second, enabling go-to-market scale. With the unique Microsoft go-to-market approach, partners can quickly scale with Microsoft 35,000-plus global sellers and through our commercial marketplace that connects millions of customers around the world. And finally, offering differentiation, Microsoft provides trusted partnership, unique technical extensibility, a secure foundation and the broadest business model for partners to build differentiated solutions to support customers. I am so ready for FY '23 and really excited to be accelerating the business with our partners.

Congratulations, and it's going to be a tremendous year for the partner business.

Thank you.

Welcome again to Inspire 2022. I want to start by saying thank you for your partnership and commitment to Microsoft and to our customers and what continues to be a time of rapidly changing business needs. Employees today are not the same people who went home to work in 2020. Flexibility and well-being are nonnegotiables. Hybrid work is now just work. And in this new world, organizations must balance employee demands and business needs. It goes beyond when or where work happens to include how people work. Managing and processing the tremendous volume of data produced from a patchwork of disparate apps and tools is not only a challenge for employees today, it's a business risk. More than ever in the shifting macroeconomic environment requires maximizing productivity while reducing costs. The digital imperative for every organization today is to deliver integrated technology solutions powered by data and AI to help employees work better and smarter. This requires a digital fabric that binds the organization together, connecting people and teams from the C-suite to the front line across every role and function and extending externally to customers and partners. No cloud is better positioned to help customers meet the demands of this new collaboration first world than Microsoft. Our integrated suite of solutions across productivity, collaboration and business process enable customers to reduce complexity and lower costs. The opportunity for you, our partners, is to grow your business by capitalizing on 3 patterns of work your customers will rely on in this changing landscape. First is enabling hybrid work. Empowering people to work flexibly across time and space. Second, it's about bringing collaborative experiences directly into the flow of work. That's all your data, workflows and business processes across every role in function. Third is creating the digital employee experience for a dispersed workforce to create connection to mission and culture and support employee well-being and to help people find the information they need to do their job well. There's a lot to unpack. So let's jump in with how we're enabling hybrid work, starting with Microsoft Teams, the center of the digital fabric. With more than 270 million monthly active users, Teams is where people spend their day. Teams is the most used and most advanced platform for work and the only solution with meetings, calls, chat, collaboration and business process automation, all in the flow of work. And it's the intersection where work, data and business process come together. Over the past year, we've introduced more than 450 new features in Teams to empower people to work and collaborate both synchronously and asynchronously, remote or in person. Here are a few highlights. [Presentation]

It's incredible to see how AI is helping people stay connected and productive in the flow of work with innovation from our OEM partners. Today, I'm excited to unveil Excel Live, which fundamentally transforms how people collaborate on data and meetings. Now working together in a shared spreadsheet is seamless and takes place right within Teams, so you don't miss a beat. Let's take a closer look. [Presentation]

We're taking this real-time collaboration one step further and bringing it directly into your apps with Live Share. Live Share in Teams meetings allows you to co-watch, co-edit and co-create content. ISVs and developers can easily build apps for Live Share using new extensions in the team's SDK. Our partner, Hexagon is already using these capabilities to reimagine collaborative engineering reviews so engineers can annotate and edit 3D models and simulations together. To deepen this concept of enriched collaboration within Teams, we're launching collaborative annotations and video clip. Let's take a look. [Presentation]

There's no better way to experience all this innovation than on Windows 11, the operating system for hybrid work that delivers the best productivity and industry-leading security and is also easy to manage. Whether natively installed on modern hardware or delivered from the cloud using Windows 365 or Azure Virtual Desktop, Windows is at the core of enabling people's productivity and collaboration experiences. With Windows 365 launched right here at Inspire 1 year ago, employees can securely stream their full Windows experience from the Microsoft Cloud to any device. And as we continue to expand where and how Windows 365 can be used, soon, it will also be available for use by U.S. government community cloud and government community cloud high customers. Be sure to watch sessions from Nicole Herskowitz and [ Eugene McCauley ] to learn more about how Windows and Teams are making hybrid work, work for every employee. Now on to the second pattern, which presents a real opportunity for you, our partners, to help our customers transform how they do business while lowering costs with collaborative applications that bring business process directly into the flow of work with Teams. We're already seeing how you're helping customers create collaborative apps and teams across every industry and function. United Airlines is using teams to connect a flight crew to the ground crew. Bosch Cognitive Services uses Teams and AI to bring together frontline operations, maintenance and procurement to improve collaboration and reduce downtime. Adobe Acrobat signed for Teams enables customers to create, manage and sign agreements without ever leaving teams. And the Johnson Controls app and teams helps quickly solve issues on the factory floor. Now let's take a closer look at how collaborative apps and teams are transforming business process and workflows across every function. Over to you, Emily.

Colette, as our customers have told us time and again, connection drives success across the organization. From sellers to service agents to supply chain and procurement teams, everyone needs the freedom to connect, communicate and collaborate on business processes and data in the flow of work. Whether it's to easily find answers from a sales rep across the room or in another time zone, or to bring a team of experts across roles and functions together virtually to solve a customer issue or brainstorm on new ideas, empowering connections between people, information and processes is an essential component of the digital fabric that binds the organization together. We are dedicated to weaving these capabilities into our business solutions, not just in productivity and collaboration apps like Microsoft 365 and Teams, but also within the apps people use to manage customer relationships and finance and supply chain operations. Our vision is to empower everyone in every line of business to seamlessly access, share and capture information in the moment in the flow of work. Whether apps for supply chain professionals who rely on coordination across sales, finance and other teams to solve an inventory issue or optimize fulfillment, or sales teams who often need all hands on deck to put together a winning proposal where apps for customer service, the frontline for customer satisfaction and retention. I'm beyond excited to introduce to you a new comprehensive solution to evolve the contact center and transform customer experiences, leveraging these connected, interwoven capabilities to help service agents deliver more personalized service and reduced response times. The Microsoft Digital Contact Center Platform is an open, extensible and collaborative contact center solution that addresses the needs of a modern contact center. It equips service teams with the modern digital tools to engage customers through a variety of voice, video and other digital engagement channels, powered by Dynamics 365, Teams, Power platform, Azure and the newest member of the Microsoft family, Nuance. The addition of Nuance brings a new level of conversational AI and automation to the contact center giving both customers and agents tools to resolve issues faster with more personalized service. More than 85% of the Fortune 100 companies rely on Nuance innovation in their contact centers. and we're thrilled to bring these world-class technologies to your service team, too. Let's take a brief look at why the Microsoft Digital Contact Center platform is the only solution of its kind on the market today and how you can help customers transform service. We are delivering a true omnichannel engagement experience for nearly any live agent and self-service scenario, with support from voice, live chat, SMS, web, social, mobile and other digital channels. We've embedded Teams Phone voice and chat within Dynamics 365 customer service for an all-in-one digital contact center solution. No matter how customers connect with the contact center you can deliver a consistent, intelligent and personalized service experience. Nuance technologies help safeguard customer experiences and streamline contact center security. Happy employees make happy customers. It is essential to help agents work better, more efficiently and flexibly. Automation is key to streamline the agent's workflow, reduce case loads and improve the quality of service. It all starts with intelligent routing that automatically matches customers to a live agent with the best suited experience and capacity for the customer needs. Or to self-service options that empower customers to take care of their needs quickly and easily. AI-powered virtual agents can converse with customers intelligently and efficiently with predictive intent that knows what they're calling about based on factors like purchase history and voice authentication, combined with biometric fraud detection to ensure a secure customer interaction. This helps take the burden off agents from repeatedly handling easy to solve cases. Automation and AI help agents engage in a more personalized and empathetic way with conversational intelligence that suggests next best response and sentiment analysis that helps agents understand customers' emotions and needs for more responsive solution. To help agents be more efficient and productive, intelligent case warming provides an efficient, automated way for agents to bring together a team of experts to resolve an open case. With a single click, an agent can view and select from a list of experts matched by skill sets and expertise and then share the case details with everyone on a Team's chat and discuss and gather steps for a quick resolution. The Microsoft Digital Contact Center Platform also delivers rich real-time analytics to understand trends across engagement channels, improve customer satisfaction and create special promotions and personalized offers to drive more revenue. Rest of all, these capabilities are all available in an open, extensible and adaptive platform that complements existing contact center investments. It also provides a ready canvas to personalized contact center capabilities for specific needs. Our platform integrates with a variety of contact center infrastructure and CRM systems today, enabling customers to start small or big and add capabilities when the time is right to transform customer engagement on their terms, all on one of the most secure platforms in the industry from contact center to data center. This was just a quick overview of the Microsoft Digital Contact Center Platform and what it has to offer. Now let's explore the opportunities it provides to you, the Microsoft partner community. I mentioned that the Digital Contact Center Platform is open, extensible and scalable, the perfect platform to build and deploy your solutions. Thousands of customers use components of the Digital Contact Center Platform today, each available to be independently deployed with the customer environment to solve a specific challenge. With a 10:1 service revenue to license ratio, this is a great opportunity to help drive the modernization of contact center globally. For ISVs, we invite you to build and deploy solutions on the Digital Contact Center Platform. We're partnering with leaders in contact center infrastructure, including Genesis and NICE, ensuring interoperability and compatibility with contact center systems and components organizations use now or plan to implement in the future. For system integrators, you can mix and match a multitude of service offerings to tailor to specific customer needs. Full stack development, low-code, no-code customization out-of-the-box integrations and point and click automation and much more. System integrators like Accenture, Avanade, EY, HCL, Hitachi, KPMG, PwC, TCS and TTEC are already on board, and we look forward to helping you build your practice as well. To give you a sense of what's possible, let's hear directly from some of the partners I just mentioned. [Presentation]

I just scratched the surface on opportunities for partners to modernize customers' contact centers. Please watch session hosted by Charles Lamanna for much greater detail. Okay. Let's move on to the third pattern of work that's driving opportunities, creating the digital employee experience for dispersed workforce. Colette, take it away.

The employee experience is a key part of the digital fabric that every organization needs to weave to bind people together in hybrid work. And with the distributed digital-first workforce, the traditional employee experience needs to be completely reimagined. Last year, we introduced Microsoft Viva, the first employee experience platform that brings together communication, communities, knowledge, learning, goals and insights right in the flow of work in Teams. Microsoft Viva is the digital-first employee experience for every employee, connecting people to the organization's mission and culture as well as key resources, tools and insights. And it facilitates employee engagement and retention, helping people prioritize and do more with less world. Let's see how it comes to life.

Viva Insights delivers personalized privacy-protected insights and actions to help employees, managers and leaders build better work habits and improve well-being. Viva Learning makes learning a natural part of the day, bringing a complete employee learning center in the flow of working teams and across first and third-party content providers. Viva Connections is the gateway to the employee experience, company branded and customized for every individual, bringing together relevant news, conversations and helpful resources. Viva Topics makes organizational information easier to find by automatically organizing content and expertise across your organization and Microsoft 365 apps. And Viva Goals, which is now generally available, is a goal setting and management solution that aligns teams to your organization's strategic priorities to drive results.

Today, we're excited to announce Viva Engage. Personal expression is such an important part of life outside of work, and now we're bringing it to the office with Viva Engage. Viva Engage builds on the strength of Yammer to help build communities engagement and grow your network right in the flow of work. Leaders can share news and insights, answer questions and facilitate 2-way conversations that help employees feel heard and included. With storyline and stories, employees can connect with coworkers, build their personal brand and showcase their expertise, passions and ideas. Tune in to set patent session for more on Microsoft Viva. Viva is designed to give every employee across every role and function what they need to feel connected, no matter where or when they're working. But employee experience is so much more than that. It's about helping employees excel at their job, whether it's sales, marketing, finance or IT. We're excited to introduce a new dimension of Viva tailored to meet these vertical role-specific needs, starting with sales.

That's exactly right, Colette. Last month, we introduced Viva Sales. It's a new modern wave selling that helps improve seller experience and make their day-to-day work life better. Viva Sales solves one of the barriers to selling effectively time. Sellers currently spend only 32% of their time selling. 34% of their time is spent on administrative and other tasks like entering and managing sales data in the CRM system. In fact, nearly 7 out of 10 sellers claimed they'd be more productive if they didn't have to manually enter data into the CRM. That's exactly why we're introducing Viva Sales. Viva Sales helps automate manual data entry to get sellers back to doing what they do best, engaging customers. As a smart CRM companion, Viva Sales make sellers lives easier while enriching their CRM system. Think about all the customer and deal insights that are already in Outlook, Teams and Office applications like Word, Excel and PowerPoint but never make it to the CRM system. These insights are hard to capture because the seller is tasked with entering the data manually. Viva sales automatically captures data into the CRM and use AI to help sellers connect with customers. By enriching the data set with customer engagement data from Microsoft 365 and the power of AI, Viva Sales empower sellers to be more connected with their customers, resulting in more personalized engagement and faster deal closure. This happens through a simple customer tagging feature which automates the data capture, saves the seller time and provides their organization with a more complete picture of deal and customer status. With AI embedded throughout, Viva Sales is like a sales code who helps move deals along with recommendations and reminders. With each interaction, Viva Sales delivers real-time insights helping sellers make the most out of the conversation. Essentially, Viva sales turns sellers into productive superstars who know just what their customers need and how we help them with the right information at the right time. We'll share more detailed guidance and readiness content with the partner community later this summer. Until then visit the Viva Sales web page for more information. Viva sales is the first of its kind solution, and we look forward to introducing additional Viva vertical experience soon. Across Microsoft 365, Teams, Dynamics 365 and Windows 11 and Windows 365, Microsoft is helping every organization do more with less, bringing data and AI into the flow of work so people can work better and smarter. Again, thank you for your continued partnership. We are excited about the opportunity ahead and look forward to another great year together. [Presentation]

Hi, everyone. I'm Vasu Jakkal. I oversee the Microsoft security business across security, compliance, identity management and privacy. And I'm coming to you from Silicon Valley, California inside the Security Operations Center for open systems, a Microsoft managed security services provider. The team here, like so many of you, doctor customers every day about the increasing volume, sophistication and rate and pace of cyber attacks. You've probably seen some of the numbers. There are 921 password attacks every second, almost double from a year ago. There's been a 650% year-over-year increase in supply chain attacks and the average total cost of a data breach has grown to $4.2 million per incident. Now add to that, the economic pressures of the world today and organizations need strong comprehensive, simplified solutions across their platforms and cloud so they can do more with less. That's where Microsoft's end-to-end security solutions come in, the most comprehensive security portfolio in the industry, integrating more than 50 categories into 6 product families: Microsoft Defender and Microsoft Sentinel for Threat Protection, Microsoft Entra for identity and access management, endpoint Manager for centralized management of devices and endpoints, Microsoft Purview for compliance and data governance and Microsoft Priva for privacy management. Together, these products work as 1 integrated solution being used by more than 785,000 organizations to secure the environment. As Satya said, customers can see a 60% cost savings by choosing our end-to-end solutions over a multi-window strategy, and you can help customers realize those savings. The partner opportunity in security is immense. Gartner expects the total addressable market in security and risk management to reach $247 billion by 2026. According to Forrester, the partner business opportunity around security is up 20% year-over-year. And research shows the fastest growth area in security is with managed services that partners are seeing margins in excess of 50%. Our friends here at Open Systems have certainly seen an increase in demand.

The demand for managed detection and response services has skyrocketed over the last several years. And the reason for that isn't simply a global talent shortage. A lot of this stems from the sheer complexity of operationalizing security. And it's for that reason that Open Systems designed Mission Control. Mission Control is staffed with experts in security, in data science and in Microsoft experts that know how to optimize security for the Microsoft Security Suite and Azure cloud. The partnership with Microsoft has been core to our strategy. It has enabled us to fully leverage the security technology at Microsoft, to leverage the security suite as a multi-cloud, multi-device control plane. But larger than that, it has enabled us to leverage Azure Cloud, both to scale our security operations but also to create a more secure environment for our customers' workloads.

I love that, and it can't be overstated how important the security of Azure is for our customers. Remember the story Satya shared earlier about the cloud solution that reunites families separated by war. One of the primary reasons the International Committee of the Red Cross chose to work with Microsoft and our partner, [ Alka ], is because of the security of Azure and our commitment to data sovereignty. But today's geopolitical and economic climate, data sovereignty has become increasingly important for customers, especially in the public sector. Government organizations made solutions and capabilities to protect sensitive data and workloads in the most confidential way possible. So they keep control over their data and meet their legal requirements. And they need trusted partners to help them do it. So today, we're announcing the Microsoft Cloud for Sovereignty, a solution that will allow public sector customers to have the full power of cloud capabilities, resiliency, security and scale while respecting the public sector sovereignty. Customers can specify the country or region or the service, secure and control their regulated data and operate with their desired control and policies in place. And we're making it easier for partners to work with governments, with new tools and support, including new Azure confidential computing capabilities that allow customers to encrypt their data while it's in use. And with confidential virtual machines and Azure confidential ledger, your public sector customers can have more confidence that data is protected. For more details about the Microsoft Cloud for Sovereignty, be sure to click the link in the chat window. Okay. I talked a little bit about what we mean when we say Microsoft delivers comprehensive security. We are proud to say Microsoft has been recognized as a leader in 19 reports across Gartner, Forrester and IDC for individual security solutions. But again, it's the integration between those solutions that makes our approach unique in the market. With Microsoft Security Solutions, customers can have both best of breed and best of suite end-to-end security across all major cloud and platforms backed by unmatched threat intelligence. Our products process more than 24 trillion signals every day that help our customers catch threats and understand the latest cyber criminal strategies. So to walk you through some of the most common and costly scenarios your customers are facing today, here's Phil Montgomery, Microsoft's Securities go-to-market leader. Phil?

Thanks, Vasu. I'm here at Microsoft Silicon Valley campus with Chantal Barnes, the Director of Security Business Strategy for Microsoft Partners. Hi, Chantal.

Hi, Phil. Let's start with one of the biggest concerns for organizations these days, ransomware attacks, which continues to increase worldwide.

As you know, ransomware attacks start with an initial intrusion that could occur in any part of a customer environment. And when organizations have dozens of siloed security solutions from different companies, they're at risk.

Exactly. And so one day, a customer's Chief Security Officer gets a frantic alert, reporting a malicious attack. A cybercriminal has gotten into the network through an e-mail phishing scheme. The team investigates and finds the cyber criminal has already encrypted the company's data, and there's no choice but to pay the ransom or rebuild the entire network. And they discovered it. It was the patchwork of security solutions that left them vulnerable. So the Chief Security Officer decides they need a different strategy.

Instead of continuing with dozens of security tools, they consult with their Microsoft partner, you, and decide to consolidate their solutions, starting with Threat Protection using Microsoft Defender, Microsoft Sentinel and Microsoft Endpoint Manager. Microsoft Defender is our extended detection and response solution, what the industry calls XDR. It prevents and detects attacks across a customer's entire environment, identities, endpoints, apps, e-mail, data and even cloud apps. Customers can quickly investigate, respond and hunt for threats from a single dashboard.

And then Microsoft Sentinel is our security incident and event management solution. Also, with Sentinel, the customer gets a bird's eye view across the organization, making threat detection smarter and faster with AI. It collects data across all users, devices, applications and infrastructure to detect uncovered risks and attacks.

Bringing in XDR with Microsoft Defender and Microsoft Sentinel together, it's incredibly valuable for the customer, providing unmatched visibility and detection against modern threats. And when you add Microsoft Endpoint Manager to the mix, customers can ensure all their devices are up to date and configured properly.

And it's a great way for partners to deepen their relationship with our customers, whether it's with enterprise organizations of small and medium-sized businesses. In fact, Microsoft defendable business was specifically developed to give SMBs the same kind of security available to large organizations. So it's a great way to bring protection to your smaller customers.

100%, Chantal. The reality is customers need help. This is sophisticated work. So as partners, you come in as their trusted adviser. Back in May, we launched a new offering called Microsoft Security Experts, a line of managed services, which will fully integrate into your own offerings. We've also announced a new set of special co-marketing and co-selling benefits, specifically to help you sell your own managed services side by side with Microsoft.

Okay. So with Defender and Sentinel, the customer has a solid threat protection solution in place, but they're growing. They have more people sharing data with external suppliers and vendors. They have more endpoints and more operational software and devices that need access. That means their attack surface is expanding and their existing identity and access management solution just isn't enough to get the job done.

This is a huge pain point, Chantal. Identity is the foundation of how people and organizations experience the digital world today. Millions and millions of digital interactions are happening every second. So Microsoft has an identity and access management approach that you can take to your customers to secure their digital estate now and into the future.

Right. You're talking about Microsoft Entra, which is our new product family that helps provide secure access to everything for everyone. Azure Active Directory is now part of the Microsoft Entra product family and is still our hero access management product. But we're also introducing 2 new product categories under Microsoft Entra, Permissions Management and Verified ID.

Azure Active Directory has more than 0.5 billion monthly users today, which is incredible. And we have solutions that build upon that foundation and bring added depth and value, including an option for your enterprise customers with Verified ID. Now with Microsoft Entra Verified ID, people and organizations can quickly verify their identity in the most private and secure way. And if necessary, they can pull back their personal data. Users are in complete control.

And then with today's multi-cloud and hybrid cloud strategies, there has been an explosion in the number of cloud permissions an organization has to manage. With Microsoft Entra Permissions Management, formerly known as CloudKnox Security, your customers can gain visibility, continuous monitoring and rightsizing of permissions across the 3 major clouds: Microsoft Azure, Amazon Web Services and Google Cloud.

Absolutely right. And that's a perfect segue into our next customer pain point, security across multi-cloud environments. The customer we're following as a multi-cloud strategy. They've been working across Azure and AWS. But the latest company they have acquired has workloads using Google Cloud as well. So Chantal, can we help them?

Yes, absolutely, we can. The customer's Chief Security Officer has talked through this exact scenario with their Microsoft partner who let them know Microsoft Defender for Cloud added support for GCP earlier this year and now covers all 3 major clouds.

Defender for Cloud is our cloud security posture management and cloud workload protection solution. It finds weak spots across your customers' cloud configuration and protects their cloud and on-prem workloads against advanced threats.

And there is a huge partner opportunity here. According to recent reports, 91% of organizations are currently using at least 2 public clouds, and they need your help to make sure they can do it securely. So another good conversation starter with your customers.

Let's keep pushing on the business complexity challenge for the customer. We just covered multi-cloud. Now let's talk about the enormous amount of data they need to protect and manage these days.

There is so much data being generated, and the risk officer is getting worried. She needs a solution that can do 4 things. They need to understand what data they have. Where is it stored, who has access to it and what those people are doing with the data.

Microsoft Purview can help them do just that, our family of data protection, governance, risk and compliance solutions. Customers need to do all they can to prevent intentional and unintentional sharing of sensitive data. And with the great reshuffle, people changing companies is creating a significant risk of data leakage, loss or theft. With Microsoft Purview, customers can classify information and enforce policies that protect and govern their sensitive information. And with intelligence and automation, customers can spend up to 85% less time identifying, classifying and labeling sensitive data.

But organizations need to do more than just manage and protect sensitive data. They also need to safeguard personal information and reduce privacy risks and that is where Microsoft Priva comes in. Microsoft Priva discovers personal data automatically and identifies risk by providing context around the data. As the personal information sitting idle for a long time, how is it being shared and transferred? Together Microsoft Purview and Microsoft Priva can protect and govern sensitive data while mitigating privacy and compliance risks.

These are huge challenges to solve as organizations put more and more emphasis on data governance and privacy. A great opportunity for partner, Chantal. All right. This is what we mean when we say Microsoft Security solutions deliver comprehensive security for customers, solutions that stretch end-to-end across security, compliance, identity management and privacy all working together.

When you think about it, it's really one comprehensive solution across clouds and platforms: threat protection with Microsoft Defender, Microsoft Sentinel and Microsoft Endpoint Manager; identity and access management with Microsoft Entra; compliance with Microsoft Purview; and privacy management with Microsoft Priva. This is the simplicity that your customers need and you can deliver it to them with Microsoft Security.

As Vasu said, the opportunity for partners is massive. So whether you already have a security practice or you're thinking about setting one up, here are 3 things to think about. Firstly, consider building a managed security services practice partners are seeing great returns.

Next, lean into compliance. The need for data protection and privacy is skyrocketing right now, and we need more partners such as yourselves to help our customers in this space.

And thirdly, think about building a security practice around small and medium-sized businesses. We even have a Microsoft Defender for business partner kit with customer-ready resources for marketing and selling to SMBs.

And that is just one of the many resources we have to help you grow your business with Microsoft Security. During Inspire, we hope you'll check out the breakout sessions and the resource links we've put in the chat window. So you can learn more about how we are investing to grow your business together. Vasu, back to you.

Thank you, Phil and Chantal. Great information about our security products and the whole partners play in securing their customers. We are so grateful for all the work our partners do each and every day. And I'd like to take a moment to congratulate 2 organizations that showed great commitment to customer security this past year. EY is this year's Microsoft Security Partner of the Year for a zero trust framework, which leverages Microsoft Azure Active Directory and Microsoft Azure keyword for maximum customer protection. And Agile is a 2022 Compliance Partner of the Year for their work helping enterprise organizations measure the maturity of their unstructured data governance. A massive thank you and congratulations to both organizations. I'd also like to congratulate the partners who are recognized with Microsoft Security Excellence Awards at the RSA Conference last month, including Open Systems. Congratulations, and thank you so much. To all of our partners, Microsoft is deeply committed to helping you secure your customers and grow your business with our comprehensive security solutions. And we are increasing our investment in co-marketing and co-selling opportunities by 50% this year. We'll have more security immersion events and workshops to help you connect with customers and build your pipeline. They're adding resources for deployment and engagement work to help ensure the success of your customers, and we're helping you scale up your teams with resources like the security advanced specialization. We know these investments will help strengthen your relationships with new and existing customers. The time is now to go deeper with security. The challenges organizations are facing are huge and so is the opportunity by working together and activating the power of the Microsoft partner ecosystem, I'm confident we can build a safer world for all. Thank you so much for joining us at Microsoft Inspire, and thank you for your partnership.

I hope you found those last 2 sessions valuable. As we heard, today's resilient organizations must find a balance between employee demands and their business needs. That's where you come in working with customers to develop differentiated solutions. Whether that's powered by data and AI improves their security posture or addresses the challenges of hybrid work, we hope you agree the level of opportunity has never been greater than it is today for technology to help address the digital imperatives Satya talked about. Your solutions across every solution area address customer needs and drives business growth. We want to help unlock this opportunity for you with our technology innovation and go-to-market scale. So let's hear from Nicole to share more on how we're investing in new to seize this opportunity together.

Today, I will share why Microsoft is the best partner for growth and why betting on the Microsoft Cloud positions you to win in the market. I'm Nicole Dezen, and I'm honored to be the Chief Partner Officer for Microsoft. Let me tell you why. The creation of the role of Chief Partner Officer reflects the unique breadth, scope and scale of Microsoft's partner ecosystem. We are deeply invested in your success, and I'm committed to ensuring that we deliver on that promise. The investments Microsoft is making in partners create new possibilities for you and more value for customers. Today, I'm going to talk about how the key differentiators of the Microsoft Cloud translate to business opportunity for you and the investments we're making to help you unlock growth. First, I want to offer a heartfelt thank you to our entire partner ecosystem for what we accomplished together in the past year. As announced in our Q3 earnings, we continue to see strong cloud results with $23.4 billion in Microsoft Cloud revenue and 29% growth in server products and cloud services. And the performance across our solution areas was fantastic from 35% revenue growth in Dynamics 365 to the incredible results in Windows products and cloud services revenue growth. This demonstrates the customer engagement with Microsoft Cloud services and how we can work together to provide solutions that meet their needs. We're also seeing continued strong growth in co-sell with $33.8 billion in annual contracted value and 35% revenue growth since we launched the co-sell program in FY '18. We could not have accomplished all of this without you. Thank you. Our ability to co-sell together is what makes our partners plus Microsoft the most powerful asset in the industry. I believe in empowering people and driving growth. What that means for you is that we want to empower each one of you with the capabilities, resources and industry depth to best serve customers. And we will invest in your profitability and growth. This is what partnership means to me. When I think about our unique value, it comes down to 3 things. First, we deliver cloud innovation. Through the Microsoft Cloud, we provide the most comprehensive end-to-end tech stack creating value for partners and customers. Second, our go-to-market engine enables you to scale your solutions to more customers around the globe. What's unique is the access you get to our more than 35,000 global sellers and our commercial marketplace. The tools, resources and support we provide to deliver digital transformation for our shared customers as well as our ability to innovate and drive world impact is unmatched in the market. Third, the Microsoft platform enables you to differentiate through our unique technical extensibility, world-class tools, foundational security built into every product and platform we deliver and a partner-centric approach. There's never been a better time to be a Microsoft partner. With increasing customer demand, our R&D investments and go-to-market capabilities, we will help you unlock new opportunities for growth. So let's take a look at the role that cloud plays in our daily lives. [Presentation]

What an awesome way to illustrate the reality of the cloud. In Satya's keynote today, he shared the importance of delivering on the digital imperatives for every organization and the role technology plays. Rapidly evolving customer needs create even more demand for you to deliver value and we're here to help. Earlier, we heard Nick talk about the rooms of the house to look at how we sell across solution areas and to whom we sell. So let's look at how we unlock this business together in one of the rooms, modern work. This room includes capabilities like collaboration, converged communications and cloud-enabled devices. As businesses embrace the demand for hybrid work, it created greater need for technology solutions. Hybrid work continues to dominate every customer conversation as organizations plan their strategies to adapt, thrive and innovate their work culture. As we've learned over the past couple of years, making hybrid work actually work is challenging, and you, as partners, have made this happen for our customers. Our programs, investments and incentives help you seize this opportunity. First, the Microsoft Cloud Partner Program is anchored in our solution areas, allowing you to achieve a solutions designation and modern work. This shows customers that you have the technical capabilities and proven customer success in providing these solutions and services. Additionally, you can differentiate your company with a specialization, the highest technical accomplishment for a solution area. This creates incremental value to customers as they search for the right partners to meet their transformation needs. Our #1 investment in modern work is workshops. In FY '22, we had over 15,000 customer engagements. And in FY '23, we will continue to scale this to help you drive growth in hybrid work, converged communications, employee experience and cloud PC. In addition to incentives, we are happy to announce that Project Orland is scheduled to enter public preview in October to all CSP partners. Project Orland provides proactive and data-driven customer life cycle management capability to help you manage customer opportunities, better support retention and grow your business with Microsoft 365. The work of Orange Business Services, the business communications arm of Orange Group with Mondelez International, the fourth largest snack company globally, is a great example of unlocking the potential in modern work. Orange Group used Microsoft Teams to enable Mondelez to reduce business complexity while moving global operations to an all-digital workspace. Mondelez needed a partner who could take over their existing environment, transform it to enable worldwide operations to increase collaboration, enable business functions to improve customer experience and help them stay ahead of supply chain challenges. The transformation enabled Mondelez to reap significant benefits, including cost optimization from moving all operations to a unified global platform.

The entire physical footprint and home-based employees of Mondelez worldwide operations are fully connected via a new virtual workspace, which allows Mondelez to easily share digital resources, communicate, inspire creativity and collaborate. The Microsoft Cloud flexibility enables their platform to scale and expand into new markets, and it delivers powerful analytics and monitoring tools to identify disruption points and deploy proactive maintenance. It also allows for digital innovation, including unique voice capabilities in China, India and the Middle East. Next, let's take a look at another room of the house, security, which is top of mind for every organization, particularly those undergoing digital transformation. Satya shared some of these statistics earlier. Cybercrime is now expected to cost the world $10.5 trillion annually by 2025. This is more than triple the $3 trillion cost a decade ago. For many organizations, it is no longer if, but when they are a victim of cybercrime. The comprehensive security, compliance and identity solutions from Microsoft empower you as our partners to solve security challenges for customers of all sizes across all industries on any cloud and any platform. That's where Microsoft's end-to-end security solutions come in, the most comprehensive security portfolio in the industry. Microsoft is the only cloud provider with native multi-cloud protection for the industry's top 3 cloud platforms. Like with modern work, partner workshops for security has been a very successful investment to help partners drive new business growth. We have 5,000 customer engagements during FY '22. And in FY '23, we will expand the security workshop motion to enable all of you to reach hundreds of millions of our Microsoft 365 customers to help them protect their environments. In addition, our customers have been asking for help and upskilling their security technical staff and managing their security environment. So in FY '23, we will continue to invest in security partner readiness and manage security partner go-to-market. A great example of unlocking new possibilities in the security is the work that Microsoft and Partners Deloitte and Proximus have done with the Belgian Justice System and the Belgian Federal Government. Belgium had a new Minister of Justice, who committed to roll out an end-to-end digital transformation, and they needed to increase the security of their first-line and knowledge workers to help reduce the number of incidents and protect themselves against upcoming cyber attacks. At the end of 2021, Deloitte delivered a security assessment for the Belgian federal government, which determined that while Justice was good on traditional perimeter defense, they were missing maturity on all other levels. Among the biggest challenges was to convince every layer of the organization or every room of the house from top decision makers, including the cabinet, administration President, ICT Director and CSO, all the way down to the IT department that they needed a more mature security solution and that the Microsoft security platform was the best fit. Together with Microsoft, Deloitte and Proximus implemented a security solution that provides Belgian justice with better protection against threats, improved correlation between seemingly isolated alerts and allows faster response to incidents. top decision makers, including the cabinet, administration President, ICT Director and CSO, all the way down to the IT department that they needed a more mature security solution and that the Microsoft security platform was the best fit. Together with Microsoft, Deloitte and Proximus implemented a security solution that provides Belgian justice with better protection against threats, improved correlation between seemingly isolated alerts and allows faster response to incidents. This strengthens security and reduces risk of malicious cyber incidents. This solution modernizes cybersecurity across e-mail, endpoints, identity and cloud applications while reducing the strain on security operations teams. The partners also delivered the skilling to ensure the customer could manage the system effectively, interpret the alerts and act upon them. This is such a great example of applying collaborative efforts to balance speed and value with cost and control. Also, by adopting an open but integrated platform, Belgian Justice hopes to offer flexibility that allows for a replicable model throughout Western Europe. What a great example of teamwork that solves real business problems, was scalable for the customer. Next, I'd like to talk about how we're investing in you in FY '23. You will hear more details about these programs throughout Inspire, but I'd like to offer my perspective. In FY '23, we're positioning you for growth by prioritizing investments that enable new business, incentivizing partners to deliver strong results for customers and making it easier to work with us. We will focus on helping you meet customers' evolving needs while driving business growth and profitability. To help partners develop winning solutions, drive profitable business and stay ahead of customer expectations, we support you in providing innovative customer-centric trusted solutions. We do this with several core investments in incentives, tech skilling, our partner programs, ISV success and the commercial marketplace. When it comes to partner incentives and investments, we are evolving the portfolio to provide a predictable experience that helps you deliver exceptional value to our customers. We're focusing on 3 design principles. Incentives and investments are aligned with our commitment to the cloud and partner opportunity across our 6 solution areas. Partners have tremendous potential when leading with value-added services and simplicity is essential. We are listening and incorporating partner feedback into our strategy and plans to improve our partner incentives in investments. We're working to better delineate our breadth and enterprise motions with customer choice at the heart of everything we do, and we'll share more on this in the coming year as we continue to evolve this to reward growth. Next, our customers are increasingly technical and to stay relevant, we need to match that level of tech intensity. This is why we're on a multiyear journey of continued increased investments in tech skilling to deepen your technical capability. This includes in-depth technical training through things like cloud weeks, virtual hands-on labs and digital technical skilling content on demand, all designed to help you build capability by solution area and industry. Microsoft sees the value of investing in our ISV partners, and we're embedding the ISV Success Program as core to the Microsoft Cloud Partner program to provide a clear, simplified pathway. It offers tailored support as partners develop, extend and sell Microsoft cloud solutions. Finally, to accelerate the go-to-market motion for partners, we're investing in comprehensive resources, including a Microsoft commercial marketplace, where you can reach Microsoft customers around the world, including over 95% of the Fortune 500. You will be able to simplify sales, reduce deal cycle times and customer acquisition costs and unlock growth by reaching new geographies and new sources of budget. We're prioritizing investments to help you address customer cloud migration needs, create growth for you and drive your profitability. Of course, you're going to hear optimism from me about the opportunity we have together. But what I'm really excited about is what analysts are saying. A recent IDC study on the Microsoft ecosystem value highlighted that partners that co-sell with Microsoft grow faster. For example, in 2021, Microsoft co-selling partners achieved nearly double the revenue growth of partners that don't co-sell, and partners who bet on Microsoft grow faster and generate higher margin. We have awesome news at Inspire, and I'm really happy to introduce a few of my colleagues to share more. Earlier this year, we announced the evolution of the Microsoft partner network to become the Microsoft cloud partner program. Among other things, this helps us better serve our ISV partners and to share more, I'm happy to have Casey McGee, Vice President of ISV sales join me. Casey, welcome.

I'd like to share what we're doing to invest in success for our ISV partners. During the last couple of years, we've seen that technology powered by the cloud can address some of our most pressing challenges. We have all seen the forecast over these last few months, indicating that both public and private companies will face a new set of challenges, specifically slowing revenue growth and increasing costs. We now must empower the ecosystem of ISVs and digital natives to adapt, innovate and embrace digital perseverance. Our investments, programs and benefits for ISVs will evolve to support our partners with what they need. We want you to be profitable, bringing value to your customers and accelerate your business growth. Despite uncertainties and new pressures, one thing is certain. -- rapid digital transformation will continue to present tremendous opportunities for ISVs to partner with Microsoft to bring new innovation to market, built on the Microsoft Cloud and design to address new opportunities with our joint customers. In fact, IDC found that building your own software and services is the most profitable and high-growth partner business model and that partners who invest most in their unique IP do best. PROS, a leading CPQ and intelligent pricing partner is a fantastic example of one of our top ISVs who weathered the global macroeconomic downturn with their customers. President and CEO of PROS, Andres Reiner and I discussed how PROS is bringing clarity to its customers in uncertain times. PROS leveraged the breadth of the Microsoft Cloud to ensure their SaaS offerings are highly scalable, globally available and always secure. Microsoft has been a partner-focused platform company since its start. We are continuing to drive innovation for ISVs to build modern, cloud-based and often industry-specific applications at a speed and scale that is bringing value to customers like never before. And as we announced earlier today at Inspire, the ISV Success Program is one of the new pathways we have created to help all software providers build well-architected solutions across the Microsoft Cloud. Early results tell us that over 50% of partners are building on one or more of the Microsoft Cloud services. These companies harness the power of the Microsoft Cloud and provide new value to customers. We are also improving the engagement for all cloud native or digital native companies, even if a partnership with Microsoft is not yet established. These companies who are born in the cloud and lead with digital and data have unique needs and require agility and innovative approaches to bring products to market. This fiscal year, we've invested in new programs and teams of specialists who will engage directly with these customers. Many of these companies will become partners, and we know all will require a development platform and cloud platform that fuels their growth. I know from many of my conversations with you that partners who bet on the Microsoft Cloud grow faster and are more profitable. Whether you're born in the cloud, digital native, new to the cloud or have been transforming your business and products in the cloud, every ISV partner can find success with Microsoft, our differentiated platform, industry-leading partner programs and ISV benefits can help you unlock new opportunities for growth, innovation and speed at scale.

Thanks, Casey. It's clear that ISV partners are delivering tremendous results of Microsoft. Our commercial marketplace helps you scale your solutions to millions of customers and to talk about our marketplace news, I'm thrilled to be joined by Charlotte Yarkoni, President of Commerce and Ecosystems. Charlotte, welcome.

Our work is anchored in two simple [ truths ]. First, you, our partners, need to win new customers, unlock new budgets and expand into new markets. And you need to do it in a way that's simple, fast and cost-effective. And second, the way customers buy technology has changed. Digital convenience and flexibility are the norm. The Microsoft commercial marketplace is the answer to these challenges. It allows you to go to market in the cloud and unlock access to Microsoft customers for your own growth. With the marketplace, you can engage with millions of Microsoft customers directly in our digital storefronts, Microsoft app stores and the Azure marketplace. You can meet customers where they are and surface your solutions directly in our products like Microsoft Teams or Azure. You can also scale through our vast network of 90,000 partners in the cloud solution provider program. Customers can benefit by having a convenient way to find, try, buy and deploy new solutions with digital convenience and for eligible solutions, pay for them with pre-committed cloud spend on one cloud build. And for eligible solutions, earn 100% credit towards their cloud consumption commitment. We led the market by dropping agency fees from 20% to 3%, taking away the barrier to entry for partners. This was a step forward in our commitment to you to be partner-focused, and we're continuing the investments to support your success. Today, we are very excited to announce a new strategic partnership with Tackle, which is a market leader in helping ISVs adopt marketplace and execute their cloud go-to-market strategy. With this partnership, Microsoft and Tackle will support every IFC in embracing a cloud-first go-to-market. We're also thrilled to announce our new ISV Success Program. Now in private preview, this program connects ISVs with cloud credits, developer tools, resources and expertise to accelerate your ability to build and sell in the Microsoft Cloud. It's the pathway for ISVs within the Microsoft Cloud Partner program. Beyond the programs and resources, we have also done hard at work improving the marketplace to support your success. We know enterprise deals can be complex but our aspiration is to make it easy. So we dramatically simplified the process to transact private offers and have seen partners win 7- and 8-figure deals as a result. Our strength is in the enterprise and over 95% of the Fortune 500 companies use the Microsoft Cloud. Our mission is to make them your customers too. Finally, we are making it easier and simpler to connect with customers across our network of 90,000 cloud solution providers. With margin sharing, partners can extend margin to channel partners and win small and medium businesses at an unprecedented scale. We will keep investing in the marketplace and in our partners' ability to go to market in the cloud. Your success is our success. You can learn more about the new marketplace capabilities and some exciting partner success stories in the breakout sessions. I hope you enjoy Inspire, and thanks so much for being our partners. Back to you, Nicole.

Thanks, Charlotte. The scale and benefits of the Microsoft commercial marketplace are awesome. Today, we're announcing how we are better aligning our co-sell motion to our partner program. Co-sell is a big lever we have in our collective toolkit. To tell us more, I'm pleased to be joined by Dan Rippey, Director of Microsoft Partner Program. Welcome, Dan.

In our few minutes together, I'll leave you with a couple of things. Direction on where we're heading in the coming year, shared understanding of Microsoft's partner strategy and a call to action for what you and your team can do right now to connect and maximize your value as a partner. One of the areas we are obsessed over is customer trust and confidence in our channel. When we create relationships with hundreds of thousands of organizations, one of our biggest challenges is creating programs relevant to all types of partners across all parts of the planet. We balance that by focusing on the needs of our customers so that when they choose to work with a Microsoft partner, they can be assured of your demonstrated ability to deliver successful outcomes. We represent this through accredited designations, and that is the connection we're going to make between the Microsoft Cloud partner program and the products and services that you bring to your addressable market. That market demands fast wins with solutions and custom offerings to meet your unique business challenges. What we're doing now is creating that connection for our customers by building a bridge between their technology needs and your unique capabilities. We're also making it easier for you to go to market and sell with us because our programs now represent the way we go to market and sell as a business. These two motions are now identical with no need for a translation dictionary between your business and ours. This required a rewrite across some of our most tenured partner programs evolving our 18 silver and 18 gold competencies into 6 solution partner designations. These connect you programmatically with the way we sell. We know that differentiation opens opportunity for customers and for Microsoft's own sales team to make meaningful connections with you, and we do this together based on those core strengths of your business. With our new designations, we'll recognize and align your strengths with our commercial solution areas. Microsoft is making multimillion-dollar investments in the channel, increasing benefits across almost every program. It's critical to note that we're also enabling every single silver and gold partner to retain the legacy benefits that you've come to rely on today. The Microsoft Cloud partner program is your gateway to product and solution development and into our commercial marketplace. That marketplace empowers your direct-to-customer sales, your activation on our demand engines and serves as your entry point to be eligible to cooperatively sell with us. Co-sell comes together at the intersection of the unique solutions you've created with those capabilities that are core to your business. We look to align your areas of deep technical focus with the offers that you've deployed to our marketplace, and we're binding this alignment into our co-sell requirements to position the strengths of your business internally across our global network of thousands of sellers as well as publicly across our storefronts. So let's talk about industry for a moment. We'd like to think that technology gets simpler as it gets more pervasive, but often the opposite is true. Take the automotive industry, for instance, the buyers of Ford's first Model T automobile had needs, and those needs haven't changed radically in the last 115 years. But the products and the buying cycle has become significantly more complex. Now you're essentially purchasing an Internet connected device with wheels and a high output motor, some of which can travel at 1/5 of speed of sound. I don't know if any of you have purchased a car recently, but when you go to buy one, the burden of choice can be completely overwhelming, add 3 or 4 more decision makers into the mix with your significant other, your pet, maybe a couple of kids. And all I can say is best of luck when you head to a dealership and expect to come home that day with a new car. This is what Gartner has recently termed "the new chasm." And the advice we hear is twofold. First, don't assume customers are confident about buying technology or that one business unit shares the confidence of another. Second, emphasize adding value through a deep understanding of your customers' business and their industry. These two tactics help cross this new chasm and best position your growth through expansion opportunities. This is why we talk about selling into all rooms of the house. about active listening and about solution-based co-selling as some of the mechanisms that can accelerate your win rate. Gartner Research shows us that one of the primary facets of high-quality decisions is industry alignment. Our customers want to know that when they buy from you that you have a track record of performance and technical maturity that maps to their sector, especially in heavily regulated industries like health care and financial services. This year, we're developing industry designations as core to the Microsoft Cloud Partner program. These co-design sessions are happening now, and we'll give you an opportunity to get involved later this week. Our motivation revolves around embracing the solutions that you've built to sell through Microsoft and for many of our partners to sell proactively with Microsoft. We know that customer discovery and expansion of top line revenue is core to your expectations, and we intend to deliver on that commitment this year with you. So welcome to the new Microsoft cloud partner program. Nicole, it has been an absolute pleasure, and thank you all for your partnership. Here's to a great week together and a very productive year ahead.

Thanks, Dan. I hope our partners take the time to attend your breakout session. This is great stuff. I'm so proud of Microsoft's commitment to enabling inclusive economic opportunity and a more sustainable future. We all have a role to play, and there are so many ways to get involved. Through the Microsoft #BuildFor2030 initiatives, we're enabling partners to build and bring solutions to market in support of gender equality, accessibility, sustainability, nonprofits and communities, helping to advance the United Nations' sustainable development goals. I look forward to seeing you at the next global partner Hackathon this September and seeing our innovations that will make a difference. To support increasing demand for social value procurement and supplier diversity, we're making it easier for customers and Microsoft sellers to discover diverse and social impact tech suppliers in our ecosystem through marketplace and referrals. We've rolled out the ability for partners to provide social impact and diversity business attestations across 16 countries, and you can now share that information through partner center. We're committed to improving representation in our partner ecosystem. Two years into the Black partner growth initiative, we've grown this community to more than 1,000 partners, issued more than $10 million in working capital loans and provided executive training and mentorship to partners. When we do this together, we can drive change at massive scale and have lasting impact. I welcome you to join us in our journey. I'm going to close where I started. Microsoft is the best partner for growth. Betting on the Microsoft Cloud positions you to win in the market. We are the platform for growth and the open cloud platform of choice. We have the most valuable ecosystem and tech for partners to differentiate and advance your own values, and we're committed to helping you thrive and grow. The last few years have taught me a lot about the power of technology and what it can do when backed by determination, empathy and grit. I'm so encouraged by our potential to deliver big impact for the world through technology. Thank you so much for joining me today. As I mentioned earlier, I believe in empowering people and driving growth. As you leave today, think about how you'll carry that forward, how will you empower your teams with the capabilities and industry depth to best serve customers. Enjoy the rest of Inspire 2022. Here's to a fantastic year ahead and the big opportunity we have in the market together. [Presentation]

And we're back to the Microsoft Inspire studios, and we've been busy today connecting, learning and collaborating with the global Microsoft partner community. You're probably joining us after checking out a breakout session. Remember, all sessions will be available on demand in case you'd like to revisit them later. We're working our way through day 1 here at Microsoft Inspire, and this time, we're all about the celebration. And if you've been waiting to hear more about Microsoft Partner of the Year awards, stay tuned because in just a few minutes, we're recognizing some incredible partners. Then later, I'll be sitting down with key Microsoft executives in a session titled Microsoft Into Focus: Sustainability. Speaking of partners, there are some great sessions our featured partners have created and curated specifically with you in mind. You can use this directory to explore solutions, your inspiring customer stories and check out new partner programs and resources. You can search the full list of featured partners by solution area or industry or simply explore below. When you find a partner of interest, simply click to their showcase page. To the right of their welcome video, you'll see sales resources and even some offers curated just for Microsoft Inspire, then scroll down to find their demos, customer innovations and sessions available on demand, like learning how to simplify connecting Microsoft Teams to voice with audio codes and be sure to check out what our featured partners have in store for you. Now it's time to find out what's going on with another group of our partners. I want to welcome Luisa in Mexico, welcome.

Hi. It's great to connect with you. A big hello from Mexico. We are here with our partners connected here in person in our Microsoft offices and with many more partners connected to the online sessions, we are just in the end of the day during the award session, our favorite session. And here, we have all the nominees and they're here. I love it.

Can you see the energy here in Mexico? I can.

Yes. Absolutely.

We can feel the energy. Congratulations. I see their awards. I feel the energy. So great to see you all.

Well, [Foreign Language], Luisa. And now let's throw it over to Lorabelle in Bellevue. Hello, Lorabelle. How's Microsoft Inspire going on over there?

Doing great. I'm so excited to be here for day 1 of Microsoft Inspire. I'm broadcasting live from our beautiful Bellevue office in the Pacific Northwest. Yes, this is a short drive from our Redmond headquarters. We have had many great keynotes this morning, especially the one on driving growth and profitability with a partner-focused business platform, and I'm really looking forward to the Microsoft Inspire in focus session on sustainability. Hope to see you all there. Thank you.

I love seeing all the smiling faces. Look at it from all over the world. Thank you, Bellevue. And now over to Michelle, celebrating in Silicon Valley. Hi, Michelle.

Hi. Good afternoon. Good morning and good evening, everyone, from working around the world. I'm Michelle Peterson. I'm the Director of the Global Partner Solutions in industry team. I'm calling in from the beautiful Silicon Valley, where we feature state-of-the-art facility, sustainability. And most important, we have more than 3 acres of living rooftop that I can roam around and inspire innovation. It's all about innovation and creativity share. So like many one of you who is watching in the comfort of your home or in your office, we have a watch party that's still in there listening to our leaders this morning, we're inspired by Satya, Nick Parker and Nicole. And they're still in there, getting inspired and I can't wait to host every one of you with your customers in this beautiful campus. So back to you. This is amazing. Get inspired.

Thank you.

You have a beautiful bright light on. When she goes back in, and I'm sure she's going to get a cheer.

Yes. Yes, exactly. And once again, thank you for joining us, Mexico, Silicon Valley and Bellevue. We've all interacted with customer service platforms. So my next interview is about something we can all relate to. Excited to welcome Jesse Loscalzo from KPMG to tell us more about the Microsoft solutions they're using to evolve that customer journey. Jesse, welcome, my friend. How are you?

Jennifer, I'm great. Thanks for having me. So excited to be here today. It's been great thus far.

Excellent, and great to have you. To jump in right in as a company focused on transforming the customer experience, Jesse, why don't you tell us what you're hearing from customers on the need to transform the contact center?

Yes. It's been a lot of change over the last couple of years. And I think from virtualization to really starting to figure out how to meet the customer where they want to be met, and that's really been the focus and the trend that we see today is how are we addressing the needs of our customers. We spend a lot of time in years past focused on the agent experience. And with all the changes that have taken place, we now have a great ability to start focusing on our clients and helping them meet their needs of the customers.

And I really do love that right, customer being at the center of everything that we do here. So can you talk about this trend on the future of contact center from what it was 4 to 5 years ago, let's say, to now and even going forward?

Yes. And as I just mentioned, we saw a lot of focus and emphasis on creating a better agent experience and also helping our clients reduce call handle time, call deflection strategies. How do you address different ways to kind of reduce the need and dependency on a live agent? As a result of sort of the success we've had in that space, the big trend now is leveraging all those different dimensions to really focus on creating great experience for the customers, talking to them over the phone, responding to them with virtual chat options, right? There's a lot of different ways in which people want to interact with the clients, with the agencies that they're buying products from or getting services from. And so helping them figure out the best way to meet the customer is one of the big things that we're focused on and helping our clients have success in.

And that's great to hear. And of course, what we're so excited about here with the new Microsoft digital contact center platform, would love to hear your perspective on how this platform will help KPMG solve customer challenges within the contact center.

Yes. And thrilled first and foremost, I just want to call out the acquisition of Nuance, which was such a game changer in the space. And some of the early conversations we're having with our clients are really about how now they have a single platform in Microsoft that allows them to engage through virtual agent, right, through chat functionality, through live conversations. And now with the IVR and that piece with telephony that ties into Teams, right? I'm sure I'm missing about 6 or 7 other things that Charles was talking about earlier today, but there's so much there. And in the past, you'd have to go to 6 or 7 different partners to get all those needs met. So we're thrilled to be able to work with our clients with a single platform to address all those needs that they're thinking about in a contact center environment.

I love that. Really a one-stop shop, right?

Yes. That's exactly what it is. And it's such a game changer.

And to build on that, right, competitive advantage, if you will. What can you tell us a little bit more in leveraging Microsoft technology and your partnership overall, as you mentioned, right, meeting your customers where they're at and wherever they are?

Yes. And obviously, the big focus is on all those pieces that are now tied into that future of contact center that contact center reimagined solution. But what we haven't talked about yet is the analytics capabilities, right? And all the additional components that come along with the power of the Microsoft platform. So as you think about -- and we've talked about this and joke about this, right, we now have 5 different generations of folks that are engaging with businesses, right? And each generation has a different way in which they want to engage. I'll talk about my father, for example. He only wants to pick up the phone, right? That's all he wants to do is talk on the phone. I, on the other hand, I kind of want to do everything myself through self-service solutions, portals, et cetera. But every now and then, there are certain things like changing a flight, I want to call somebody and make sure that they got it right. And so what we now have in these platforms and with the analytics is the ability to kind of proactively engage, understand where the customer wants to be met and then seamlessly transition between those different components. So then you don't even recognize that you went from chatting with a virtual agent to actually chatting with a live agent until they pick up the phone and give you a call and say, "hey, it seems like we're stuck here. Let me help you out." And our ability to do that with the Microsoft platform is really helping us transform how our clients are engaging with their customers, and that's a big competitive advantage for us.

And I absolutely love that. I do have to say, Jesse, I may be siding with your dad on this one.

I didn't tell you where I fell in the generational hierarchy. So I'll leave that part alone.

All right, Jesse, thank you. And if you'd like to learn more, head over to aka.ms/kpmgd365. Thank you so much for your time today, Jesse. And now over to you, Angela.

Thanks, Jennifer. Throughout the show, we will be honoring the winners of the Microsoft Partner of the Year Award. These partners have shown excellence, leveraging Microsoft technologies all over the world in categories like security, Azure, modern work and more. To be selected as a partner of the year is no easy task. All our winners have undergone extensive nomination and judging process and have demonstrated their innovations and successes empowered by Microsoft products. And now we'd like to kick off our awards today, starting with the category Business Applications. Let's celebrate our partners. [Presentation].

Winners of the Microsoft Partner of the Year Awards have demonstrated excellence in innovation, customer commitment and making real impact through their exemplary use of Microsoft technologies. The winners in the Business Applications category are Bamboo Cloud for Dynamics 365 Business Central; Vision Net systems for Dynamics 365 Commerce; Accenture Avanade for Dynamics 365 customer insights and marketing; Accenture Avanade for Dynamics 365 customer service and field service; KPMG International for Dynamics 365 Finance; EY for Dynamics 365 sales; Hitachi Solutions America for Dynamics 365 supply chain management and intelligent order management by OM; Sogeti, part of Capgemini for power apps; EY Brazil for power automate; Wipro Technologies for power BI. Congratulations to the winners of the 2022 Microsoft Business Applications Partner of the Year Awards.

Now let's keep the Microsoft Partner of the Year Awards celebration going. This time, we're recognizing partners who have outstanding successes in the fields of security. Let's check it out.

Winners of the Microsoft Partner of the Year awards are selected based on their commitment to customers, the impact of their solutions and their exemplary use of Microsoft technologies. The winners in the security category are: Agile for compliance; Infosys for modern endpoint management; EY for Security. These are the winners of the 2022 Microsoft Security Partner of the Year Award. Congratulations to all. [Presentation].

Now we're going to turn our spotlight over to our friends at NVIDIA, a global leader in GPU Tech and Sinequa, a leading ISV and search and natural language processing technology. NVIDIA has partnered with Microsoft and Sinequa to develop the next generation of AI and deep learning capabilities for large and midsized enterprise. It's called neural search. And we've got Sinequa's Senior VP of Corporate Development, Xavier Pornain here with us to learn more. Hi, Xavier.

Hi, Angela. How are you?

Wonderful. Yes, so great to see you. Tell us more about what Sinequa does?

We are a SaaS company, SaaS cloud company. We help employees find information in [indiscernible] and structured data such as text, e-mail, images, videos. We connect more than 200 enterprise applications, including, of course, all the Microsoft application, but also many others like Box, Salesforce, Snowflake, PTC, OpenText and so on. We provide 2 types of solutions for our customers, one for a very large organization that's run on the [indiscernible] of each customer and where our system integrators are developing applications. And then we have also a SaaS solution that we call Workplace Search that will be launched later this year, and that is dedicated for SMB customers.

That's exciting. And you're really launching some innovative things. So what challenge are you trying to solve in partnering with NVIDIA and Azure?

We've been in the enterprise space for many years and we build on search engine and natural language processing engine, but bringing search results to the next level require new models. And also what we see in the market is that most large organizations don't have like the IT department of Google to make search great for all their employees. And that's why we started to develop 3 years ago neural search. It's a combination of 4 deep learning models that are based on neural networks. We analyze the full text of documents at indexing time and then we also analyze the queries and the question of the people, and we compute in real-time inference model to match the best answers. This type of calculation were not possible 5, 6 years ago because there was not the power of the GPUs that NVIDIA is proposing. And now we can propose that to our customers. It provides a huge boost in relevancy for all our customers and it's completely automatic.

That's great. So helpful for them. And how are NVIDIA and Azure helping you?

So NVIDIA was presented to us by Microsoft, and we got connected to the AI and machine learning team. And as you can imagine, when we run those algorithms at scale, we are talking about tens of millions of documents and sometimes hundreds of thousands of users connected to our system. It requires lots of processing power, and it could be very expensive for our customers. And that's where we worked with NVIDIA to optimize our neural search capabilities for NVIDIA GPUs, leveraging TensorRT, and we also optimize our platform for Azure with Microsoft to leverage their elasticity. And thanks to this, we are able to propose to our customers all the neural search capability at a cost that is reasonable for them and that can basically grow with their needs.

Yes. Neural search really is the next frontier. Thank you so much, Xavier. Appreciate your time today. Remember, you can learn more about neural search by attending NVIDIA session on accessing breakthrough AI and HPC supercomputing performance in the cloud by visiting NVIDIA in our featured partner showcase. You should add this to your digital backpack. Back to you, Jennifer.

Thank you, Angela. And before we move on, we'd like to check in with Poly. Microsoft and Poly have been transforming the meeting experience for a long time with Microsoft Teams. And that work has been more important over these past few years. Now that companies are reintegrating in-person work with working from home, these partnerships are even more important than ever before. Karuana Gatimu met with one of Poly's partners, Grant Thornton Australia and talked with their Technology Officer, Carlo De-Fazio, to learn how their workforce is navigating the hybrid workplace.

Hello, everyone. Welcome to Microsoft Inspire. I'm Karuana Gatimu. And Carlo and I are going to tell you something about modernizing the meeting experience. Carlo, thank you for being here with us today. We appreciate you.

Thank you.

Excellent. Well, I know our viewers have heard a little bit about what you do at Grant Thornton Australia. But first off tell us, how many employees do you have?

We have 1,500 people across Australia across 6 states.

That's a lot of people, goodness. Well, I know that you went through quite a journey in modernizing your meeting experience during the pandemic. But what I find really interesting is what you had to do when people started to come back to the office. What was that like for you?

So prior to the pandemic, we [indiscernible] for business environment. Moving into the pandemic, we pivoted across to Teams, which gave us a lot of that scalability and flexibility. But the challenge we had is when we move back to the office, our meeting rooms really weren't capable of that Team's interaction. So we had to engage Poly and started down that journey of replacing our all the Poly equipment with the new Teams enabled environments.

That sounds like because you had Poly before you were able to move forward. Was that an easy process?

Look, the challenge that we were facing was a lot of these rooms are quite complicated, but Poly made it actually quite simple to replace some of the older equipment with the newer Android technology, which was great.

Have you had good adoption and employee satisfaction with the new meeting experience?

Look, a lot of our focus is to try to make that experience as easy as possible. And one of the -- some of the feedback we've got from a lot of our partners and then a lot of our people is that it's a lot easier walk again, pressing a button, and it just works. So that was definitely pretty easy.

I love it. It just works. We're going to quote you on that. I'm quite sure. That's great. If there is one thing that you wanted to tell folks about your relationship with Poly and about having them really help you in this journey, what would it be?

Look, keeping things simple may seems really, really easy and using the Poly kit made it quite simple for us to transition from the older Polycom and Plantronics equipment over to the newer Teams-based systems, and we did most of that internally with a little external support, so we're really helped.

I'm so glad. Thank you so much for sharing these insights with us today. We really appreciate your time, Carlo. Take care.

Thank you. Bye.

For more from Poly, be sure to visit them in our featured partner showcase. And as always, you can enjoy this now or added to your digital backpack for later. Next up, let's take a look at what we have -- what you've been saying on Twitter. Let's get over to the wall here. Oh, I love this fun little side chat and previewing our tweets earlier in the day. And here we have together, we achieved 723 million in our sales in Canada with a 6.6 year over growth. Really do love that number. Why don't we make our way over to this side here? We have Poly. Smart camera technology is the brain behind our cameras, making sure everyone is seen clearly and has a seat at the virtual table, #meetingquality and #hybridworking. Make sure also to keep using that #MSInspire. We love that. And why don't we head over here to Gabriela. We want to make things that just work. We need to drive it as a business imperative, loving hearing from Estelle Jackson from Poly and driving accessibility and disability and inclusion at Microsoft. All right, what do we check out here? Cory, this is a game changing for the market as a true one-stop shop as an enterprise solution. Yes, referring back to contact center, #MicrosoftTCCP and let's check -- all right. And here we go, wow, we've got more tweets coming in. Okay. So we got -- this is the biggest news out of MS Inspire, the ability to link Microsoft Dynamics 365 and Microsoft Teams is perfect for many organizations. Thank you for the shoutout. And we got some fun pictures here, too. Let's see, we got Lydia over here. Hello, waving. Folks at [indiscernible] Technology up here, too, receiving awards. We really do love honoring and commemorating our partners for all the amazing work that they do. Why don't we head over to here. Hybrid work is now just work, and we must balance employee demand against business needs. What's the biggest challenge you are seeing in this new reality? Hey, that's a really great question. And we're going to wrap up here. Let's head over to wrapping up on some announcements so far at MS Inspire, Microsoft [indiscernible] for the government sector, success programs to help ISPs innovate rapidly. We love our ISPs and digital contact center platform for users seeking help and, of course, Azure space partner community to deliver innovative offerings. So remember, keep up with everything going on with Microsoft Inspire using the #MSInspire. We've got another question to throw at you, by the way, in our chat, check it out now. Here we have it. How many times have you attended Microsoft Inspire? And don't forget, it used to be called WPC or World Partner Conference, and that counts too. How about it? Let's see, A, it's my first time; B, 2 to 4 times; C, 5 to 8 times; and D, too many to count. I really do love that last one, right? If you've been to many of these when they were in person, now virtual. I know myself, one of my first ones that I attended at Inspire was virtual. And while what really great to see folks coming back together and seeing this hybrid approach to our live events and how about it, curious to see what you guys are thinking. 5 to 8 times, let's see. Yes. All right. Well, definitely head over to the poles, put in your -- what your thoughts are. And that will do it for us from the studio for the moment. Up next is Microsoft Inspire Into Focus. I wonder how Microsoft approaches something as important as sustainability. What we're about to find out as my cohost, Angela Chee sits down with Microsoft leaders to learn more about Microsoft's commitment to sustainability and what you can do in your own business. You'll definitely want to stick around for that one. And remember, you can also save that Microsoft Inspire Into Focus to your digital backpack by looking it up in the session scheduler and clicking Add to Backpack. While you're there, be sure to check out the rest of Microsoft Inspire digital venue, the connection zone, the learning zone, the feature partner showcase and so much more to do and enjoy. All right. Now is the time for Microsoft Inspire Into Focus: Sustainability.

It's more important than ever to invest in sustainability. So what's Microsoft's commitment, what business opportunities come from adopting a comprehensive sustainability strategy and having your organization aligned with Microsoft to meet your goals? Over the next 30 minutes, we will have the answers to all these questions, even take a few from our live audience, as you can see. There is so much more ahead. It's time to get digital.

Hello, and a special hello to our virtual audience. Look at those lovely faces. They join us live together via Microsoft Teams. Welcome to our show. Into Focus is where we dive deep into a topic crucial to the Microsoft ecosystem. Sustainability is top of mind for all of us, from cultivating a strategy to leveraging the power of the Microsoft Cloud to meet your goals to addressing the most urgent issues businesses face. So let's get things started. Here with us now is Chris Capossela. Chris, great to have you into focus.

Angela, thanks so much for having me, and hello, everybody. My name is Chris Capossela, and I'm glad to join you for today's show. Welcome to our virtual audience as well as all of you watching us around the world. We know that sustainability is, of course, a topic that's top of mind for so many of our customers and, of course, our partners as well. I'm hearing about it with all the CEOs I talk to. I'm discussing it with so many customers across different industries, and I'm sure that many of you are experiencing the same conversations. It's just an incredibly important topic. So I wanted to have Brad Smith joining me today to have a deeper discussion on Microsoft's approach to driving sustainability, how we're progressing on that approach and how we're leveraging technology to support our efforts. So Brad Smith, thank you so much for joining me. It's great to have you on the show.

Good to be here, Chris.

So we've been on the sustainability journey as a company. We're making some progress. We've been at it for some time. But maybe we can start with you explaining why now is such a critical time for all of our partners and customers to engage.

Well, I think the simple answer is now is a critical time for literally everybody on Planet Earth. If you're watching from London today, what you are experiencing is unprecedented heat, but it's not about the temperature on a single day. If you look at the trends, if you look at all the data, we're seeing the increase in carbon dioxide emissions raise the temperature of the planet, and that is literally putting the human habitability of the planet at risk. This is, I think, perhaps the most existential crisis of our time for the rest of this century, and it's not just for the future, it is for here and now and for every business, every partner, every customer, every employee. It matters that people start to take action.

It's incredibly critical right now for everyone to get involved, and as an employee, I've been very proud of the work that we've done. You've been a big advocate of transparency, sharing the data, sharing the progress. We publish a sustainability report every year. That sustainability report shares many of our successes, but it's also very honest in sharing setbacks that we've had along the way. What are you hearing back from customers about our sustainability report in this notion of transparency?

We put out our second sustainability report in the annual report this past April. And I do think transparency is just an imperative, really for 2 reasons. It's how we all hold ourselves accountable and it's how we share what we're learning. And so for this year, ours was frankly a mixture of good and bad news. The good news was even though we had grown the company by 20%, we had reduced our Scope 1 and 2 emissions by 17%. That's the carbon we emit ourselves, it's the carbon that's emitted from the electricity that we use. There was bad news, though. Our Scope 3 emissions had gone up by 23%, fundamentally driven by 2 things. We're building data centers, buying servers, concrete, steel, all of that emits carbon. And we had a great year for our gaming business. But when people play games, they use electricity and that electricity emits carbon, given the way most of it is generated. What it really shows is that it is hard to grow your business and shrink your emissions, especially your Scope 3 emissions at the same time. So we've applied that learning. We're doubling down. We have more goals and targets and actually accountability margins for our different businesses. We've increased our internal carbon fee. But I think what it shows more than anything is, look, we're all on a journey together. The more we measure ourselves and share what we're learning, the more we're going to be able to make progress together.

It makes a ton of sense, and I think it's so great to have leaders who are willing to sort of stand up and say, here's the good news. Here's the bad news. Here's what we need to do about the bad news, and let's celebrate the things we've learned on the positive side. Two, you emphasize data, measurability, transparency, the actual ability to track what the company emits is actually quite hard across Scope 1, 2, 3, et cetera. Can you talk a little bit about why that's hard and what customers should be thinking about?

Well, I think the first thing everybody should just think about is why it matters so much. Right now, humanity emits 52 gigatons of greenhouse gases every year, and we've got to get that down to what we call net zero by the middle of the century. Really what it means is you got to get 52 down to probably 10 or 12 and then remove from the environment every year, 10 or 12 gigatons of carbon as well. How do you do that? Well, it starts with measuring it. If you don't measure it, everybody will feel good. Well say, "I'm working so hard, I must be doing good work," and it may not add up to anything more than sort of a false delusion. So what we need to do is get everybody on the same page about what we call carbon math and carbon accounting in the same way that we have standardized uniform rules for accounting for money, we need to have standardized uniform rules for the accounting of carbon emissions. And then just as with financial results, the only way to measure something at scale is to automate it. We have to build an ecosystem that literally is as big as the planet that is directly connected to the sources of emissions so that we can all automate that. And that's what we're doing as a company. That's what we're doing with the cloud for sustainability. That is where so many partners and customers have such an important role to play.

It's really exciting. I mean, I do think there's a wonderful partner opportunity here to help our customers do exactly the types of things we're trying to do to learn from us to use our technology. And it dovetails nicely with the last question I wanted to ask you about, which is we're starting to use technology in some pretty impressive ways. We're trying to create that into technology that our customers and partners can talk about. How are we approaching using tech as a way to measure as a way to be transparent, as a way to make progress. Could you talk a little bit about that?

Sure. Well, what we've done is really put measurement systems in place across Microsoft. So that -- and we've turned to the finance team because at Microsoft, probably in most companies, the finance organization is the absolute pinnacle of excellence when it comes to measurement. They measure money for everything. They can measure carbon as well when we give them the data tools as we've done. We're using the cloud for sustainability inside Microsoft as well as providing it to our partners and customers. We've then created targets for every part of the company. You have a target. I have a target, you and I are now measured or compensated even on how we do in hitting our target. We're rolling out this know-how to everybody in our supply chain because you have to take your suppliers with you especially if you're going to make progress in Scope 3. One of the things that I find just fascinating, Chris, is how this changes how we think about almost everything. As you know, we have this enormous expansion of our campus here in Redmond, 17 buildings under construction. Once complete, it will be a 0 carbon campus, at least that part. In part, that means that all the electricity will basically come from geothermal wells, more than 800 of which have been dug in the ground. But the most interesting thing of all, I just find this fascinating, we'll serve more than 10,000 meals a day in that part of the campus. Unlike our cafeterias or cafes or kitchens today, none of it will be cooked using gas. Gas emits carbon. It will all be from electricity that comes from renewable energy. So what are we doing? We have to ensure that everyone who has learned how to be a great cook or chef gets trained on how to cook with electricity rather than gas. And I think what that shows us is just how this is going to touch every part of the economy and it's going to just shape -- reshape how people work, but it will all be based on a foundation of digital technology and data so that we know whether we're meeting the carbon emissions goals that are indispensable.

I love that. And there are so many stories about the work we've done on the campus that are just a base. You just shared some of them. But taking it even 1 step further, we actually worked with a wok manufacturer to design a new type of wok that would actually work on with pure electricity as opposed to with gas. And now that we've done that investment, that wok can obviously be sold to any company that's going to be using electricity instead of gas, and it goes to that role of a leader. And not just, hey, we're going to do these small things. We're actually going to do things that benefit everybody in the industry as they go on this journey. And I just love the work we've done on the campus itself. I'm going to ask you 1 more thing, if I can. And that is when we first started talking about this, it was amazing for me to understand how deep people like yourself and Lucas have gotten in this space. How do you think about the culture change that Microsoft is in the middle of going on as it comes to embracing sustainability? We've done a lot of things sort of from the top. We're compensating people on making progress. We're measuring it. These are things that the leadership team can sort of say, we will now go do this. But if you don't get everybody thinking about how to build their product in a different way, how to go to market in a different way, how to talk about sustainability with their customers and see if it's important to their customers, I don't think you get there. So perhaps you could talk a little bit about the things you've learned about shifting the culture of Microsoft to make this a top priority.

There's 2 things that I found. One is, it has not been difficult to get people excited. In fact, to the contrary, when I travel and I go to different countries and cities and we do employee meetings or meetings with partners and others, especially, I'll say, anybody who's under the age of 30, this issue is of such importance. We have employee resource groups in almost every subsidiary that bring together our employees who care about this. And I seldom find there's a day when I have to encourage people to do more. I encounter many days when people are asking me, "Hey, why aren't we moving faster? Why aren't you doing this or that?" That's fantastic. And so what that really points to, in my view, is sort of this extraordinary opportunity to create a culture of learning, which is why I think transparency, again, is so important. It's constantly comparing notes, what's working, what's not, where do we go faster. But the second thing that I think is so interesting, and I think this really speaks to all of our partners, this touches every part of the economy. There's 2 things to think about. Think about COVID. What impacted our role in the tech industry more? COVID itself or what the world needed to do to respond to COVID? Well, people had a lockdown. Because they locked down, they needed to use technology, and it spurred a whole host of new conversations. Well, what does that mean for broadband access for kids and homes? That was all about the response to COVID. Now think about carbon. We have this critical problem. The world has too much carbon. What's really going to lead to change is the response to that as it sweeps through every part of the economy. And then the second thing to think about is the extraordinary opportunity and need for unprecedented breakthroughs, first, in science and technology. And we don't work in the industry that produces wind or solar or fusion or green hydrogen or sustainable aviation fuel or long-duration battery storage, but just take that list of 6. Those are going to be of fundamental importance to help the world achieve its goals. But then think about all 6, they will only achieve what they need to achieve if they have the world's best cloud, AI services, machine learning capabilities, breakthroughs in data analytics, you name it. Every single thing that they need to do will benefit if we can do a great job in supporting them. And in many ways, I think more so than perhaps any other thing we all might work on, this is the great unifier of our time. It doesn't matter what part of the world you're in, doesn't matter what disagreement is characterizing its capital city during a day, we all are going to need to come together. And I think that's the fundamental cultural opportunity to come together, really act with an extraordinarily high degree of ambition. We call this a moonshot, and I love that because if you go back to the first moonshot, to put humanity on the moon, you look back at the early 1960s. John F. Kennedy was the President of the United States. He set the goal before the country knew how to get there.

Exactly.

It took a little bit of faith and then a lot of determination. It was a relatively small group of people in that day. It will take everybody in the decade and decades ahead. Fantastic. Brad, thank you so much for joining. This is an unbelievably important and fascinating topic. Really appreciate you being here. I know our partners benefit from this knowledge, especially when it comes to our continued investment in the space. I think I speak for everyone in saying thank you for your leadership and the work you've done. I know we're just beginning. With that, Angela, thanks so much. Let me turn things back over to you.

Thank you so much. So many great insights, Chris and Brad. Thank you again. All of us working together to drive change that can really make a difference and the time is now. So let's bring in another important voice, Corporate Vice President of Sustainability, Elisabeth Brinton. Elisabeth, thank you so much for joining us today. So much passion. I can hear in your voice and I know so much passion in your heart for this topic. So what have you been seeing? They touched upon it briefly. You've been talking to partners, talking to customers, what are people experiencing right now?

Well, thank you so much, Angela, for having me. And indeed, building on what Brad said, this is the existential topic of our time. And what we're hearing from our customers and partners is their deep desire to make a difference, to drive impact but to do so in a commercially relevant way. Because if you think about just like Microsoft, we're a publicly listed company. We have to drive growth, and we have to be profitable. So the how to of sustainability, that's the challenge. And that's where technology comes into play. How do we actually protect margin? How do we improve efficiency? How do we drive profitability at the same time? So the way I love to think about sustainability, it's making it real. It's a multiple bottom line, and it's both ends.

And I think it's possible, and that's really what you're working to do in terms of sustainability isn't just an ambitious goal. I really feel like it's part of the Microsoft culture, and it's really a culture that you're trying to share with your partners. Why is sustainability so important? And what are the components of that?

Well, it's great for business. And so that's the thing that I think is key. It is not a zero sum. It's not either or, are we going to grow or are we going to do the right thing for people and planet. It's both. And so some of the components and breaking that down, first of all, when you think about ESG, it's the environmental aspects, which include carbon and water, everything that touches our planet, but it's also the S, the social aspect. It's getting how we, as people, include diversity and inclusion, how we also think about fairness and fair trade, ethical action, these types of things. And then the governance, the integrity and transparency about this because sustainability is really about trust. And so that's what makes me so proud to be part of Microsoft is we're taking that trust, and we're making it very practical. So when you think about technology, and it's how do we apply everything that we have, the great starting with Azure, and then building that forward so that customers and our partners can actually deliver the house.

And why should the customers be really excited, right? They already are excited, but really making the sustainability work. There are so many reasons. But what are some of the things that using Microsoft Cloud sustainability that they should be focused on?

Well, so first of all, we're building a big, broad ecosystem because if you think about every single industry, you're going to approach sustainability in a different way that's appropriate for your business, how you make money today, how you're growing and how you're serving your customers. And then frankly, the impact that you have on the environment. And so if you think about food supply, for example, we have a great customer that Grupo Bimbo from Mexico. And they realized that part of their role was to nurture and feed the world. And so they're looking at their particular environmental impact. They're using the cloud for sustainability to first measure and get a very clear understanding what their business levers are, how do they actually deliver the impact while also feeding the world. And so it's an incredible opportunity because you can again hit that double bottom line, you can do well by doing good.

I love that. And I know that you're really passionate about that topic. And they touched upon that about first see what the impact is, right? And then having the tools and the skill sets to figure out how can we make this expanded and then getting everyone on board in terms of the culture, right? I think now we're going to go to some customer questions or some audience questions. Is that what we're going to do? We're standing by. They are -- have some burning questions, so let's check in with them while they're waiting. Starting off, we have Colette Tevada. What is your question?

Elisabeth, how are customers making the business case to their leaders and Boards to invest in sustainability?

It's a great question. And first and foremost, it goes back to business model and value creation. And so if you think about the business case, again, it's going to be different depending upon the industry. But if you start with efficiency, for example, in manufacturing, margin is really, really important. So you can actually use IoT and you can use advanced analytics to actually help you determine where those levers are, how you can drive efficiency in your manufacturing process which is going to, at the same time, mitigate emissions. And so it's, again, a double bottom line that the value case comes through because, again, part of making sustainability real is capital choices and being really good stewards of that capital for that double bottom line benefit.

Thank you. I'll go to our next question. Thank you, Colette. Our next question is from Nick Segal. Nick, how are you? What's your question.

Thank you so much. Elisabeth, how do your partners align to and enable the Microsoft Cloud for sustainability?

Thank you for your question. Well, so first of all, when you think about the cloud for sustainability, we are really building a platform for systems change. And so as partners, we're looking for you to find the best place that makes sense for your business to grow. And so that way, we can grow together to support our customers. So if your expertise, I'll mention a great partner, for example, with water. We're moving forward with our sustainability manager with a water partnership this fall. And so Ecolab, they bring all of those decades of experience in water, deep, deep expertise. And so then together, we can help them grow their business and then we're doing the right thing for our customers. And so each of our partners, there's room for whether you're an ISV, whether you're an advisory partner, you can come at it from tax. You can come out from reporting at the Board level. There's so many different angles, and that's what's a beautiful thing about sustainability. It really is an ecosystem that can help grow, and we're really thrilled about that partnership opportunity.

I love that. It's bringing everyone together to come up with solutions that our world desperately needs, and I know that you are at the forefront of that. Now sustainability is growing and changing. What do you think the next 12 to 18 months will look like?

Wow, it is speeding up.

With your magic ball.

With a magic ball. Well, first of all, it's really about making sustainable bringing it to life in a very practical way. Because if you think about the reduction actions that we need to do to make the planetary impact, that requires bringing together a physical technology with digital technology. So over the next 10 years, we're going to see dramatic price reductions and core technologies around, for example, battery technologies, new ability to do, for example, floating winds in deeper water, to do more renewables closer to load centers, to drive more renewable electricity. You're going to see advances in regenerative agriculture. All these pieces, then you can bring the technology to do that to actually be able to live and solve the Scope 3 challenge, which has eluded us today. And so a key theme I would say that, to me, is the biggest opportunity in the next decade is true providence, being able to actually say this is what we say it is and have that full credibility to know providence all the way through you're in sort of the supply chain, I'd like to refer to it as a value chain. It's that system. And that is applicable to everything, whether you think about recycling and circularity whether you think about it in terms of food systems, thinking about it from a systems effect and having that true providence, and that also goes back to the S, the social part of ESG, knowing who is making your product, that it's not child labor. It's not something dodgy, that we can then have the confidence and integrity to know that our systems are actually operating with integrity just as much as they are green.

That is our next level, right, looking at things from a system view. Like everything you do has an impact, everything that everyone else does, small or big. And so we can start at the business level, small business, large business, but personally as well, we really need to take responsibility. And I love that you're at the forefront of that, what are you personally excited about?

Well, I'm personally excited about the fact that we could all make a difference. It builds on exactly what you're saying. And so it's an incredible sense of possibility. We can all make a difference. And as we have more information and have the transparency with data, we can make better choices and also we can make choices in real time as opposed to have a delayed effect, and that's going to be transformational for business as well. And that's where we're applying where we're going with our cloud for sustainability to be predictive and then have the ability to model and say, okay, if we do this lever, if we invest our capital in this direction, we can have a confidence, we're going to lower our carbon impact by X gigatons and so forth. And thinking about the power of that, that power of real credible decision-making is awesome. It unleashes the art of the possible.

That's why I can see so much passion in you and I know that it is spreading to all the partners and all the customers listening. If you were to have 1 thing -- we've covered a lot today, and there's so much like you said, you could take it in every industry, every however big or small, people want to get involved. What do you want the 1 thing that someone to take action that they're hearing today? What would you like them to do?

The 1 thing I want to take away is say yes. Yes, we can because together, if we have that attitude, anything is possible.

Okay. Thank you so much. Yes, that's from our internal for ourselves as well as for the whole company cultures and it spreads to everyone just like your wonderful energy that's spreading today. Thank you so much for joining us.

Thank you so much, Angela. And it's so important because we hear so many scary bad things in the news that having that article possible is so important.

I know. All right. Together, the time is now. Thank you so much, Elisabeth, for joining us today.

Thank you so much.

You heard it, the time is now, and that does it for our show. This past half hour has been so insightful. We covered everything from the most pressing topics for Microsoft partners to how organizations can align with Microsoft to implement solutions and the future of models that support both business and the environment. I don't know about you, but after hearing from everyone, I'm inspired, energized and activated for everything the next year has to offer and the sustainability solutions to come. Thank you to Brad, Chris and Elisabeth for being here. And of course, to our virtual audience who joined us via Microsoft Teams. Now back to more of Microsoft Inspire.