As Microsoft takes on Amazon Web Services, analysts say a lesser-known product called Power Platform will become significant
- Microsoft is seeing increasing success as it takes on dominant Amazon Web Services in the cloud computing market.
- Analysts at market researcher Evercore ISI say that a lesser-known product called Microsoft's Power Platform may wind up be more significant in the fight than most would expect.
- Power Platform helps businesses write applications and perform data analytics with little to no code required. It's part of a larger push at Microsoft to provide products to less-technical customers.
- Evercore expects Power Platform will be such a key focus area for Microsoft that it could be a focus of acquisitions and offer a unique way to compete for cloud customers.
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As Microsoft seeks to upend market-leading Amazon Web Services in the cloud computing market, analysts at market researcher Evercore ISI say the company's Power Platform tool for business applications may become more significant than most would expect.
Microsoft's Power Platform is a tool to help businesses develop applications and perform data analytics with little to no code required and the company recently beefed it up by giving it some automation capabilities. Evercore expects the Power Platform to be an "important part" of Microsoft's cloud strategy and could become a focus for some of the company's acquisitions.
"The line between business users and developers is becoming increasingly blurred, and Microsoft's Power Platform is positioned to play a critical role in aligning application development efforts with line of business objectives," Evercore's Kirk Materne wrote in a research note on Monday.
He sees Power Platform as a billion-dollar product for Microsoft, predicting it could contribute as much as $650 million revenue by 2020 and hit around $1 billion by 2022. That amount of revenue may be just a rounding error for Microsoft, which did $33 billion in revenue for its last quarter alone, but that's not the whole story, Evercore says.
"While not a 'needle mover' in terms of the revenue impact, we believe Power Platform's strategic value in terms of aligning Microsoft with key digital transformation initiatives is an important part of the broader cloud strategy," Evercore wrote.
Microsoft is in the midst of rolling out multiple products geared toward less-technical customers.
"This is part of a much bigger initiative we're leading at Microsoft of making it so you can bring digital experiences to all parts of the business," Charles Lamanna, corporate vice president of the Low Code Application Platform at Microsoft, recently told Business Insider.
Evercore estimates 86% of Fortune 500 companies are using some form of Microsoft's Power Apps already. Offering products that require little or no coding - part of the so-called low-code/no-code movement in the developer tech market - increases Microsoft's potential customer base.
The company is also building a new team capable of training users at any technical level about its Azure cloud-computing business, casting a wider net for potential customers.
Prioritizing the cloud
In the end, it's all about the cloud. Microsoft has made a lot of moves to prioritize its Azure cloud computing business, including dropping products and inking big partnerships with former rivals.
The best example of this is perhaps a deal to make Microsoft's Azure the public cloud underpinning for Marketing Cloud, Salesforce's cloud software for marketing professionals. That partnership is a big deal because the two companies have been long-time rivals in this area. Nucleus Research Director of Research Seth Lippincott went so far as to say the partnership "undermines" Microsoft's own business applications business in order to get Azure in front of more customers.
"They are having to triage where they are putting their energy," he told Business Insider. "This is an additional sign of where we think Microsoft is going - and it's pretty clear business applications is not where they want to be for the long haul."
Business applications such as Power Platform, however, help prop up Microsoft's cloud business and, to that end, analysts expect Microsoft will continue investing in them.
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