Microsoft categorizes partnerships into 'horizons' based on how ambitious they are - from 'bread and butter' to 'change the game'

• Microsoft's future rests on forging strong ties with corporate customers, and it relies on a special framework called "horizons" to guide its partnerships.
• Microsoft executive Peter Lee tells Business Insider how partnerships are categorized in "horizons," based on how ambitious projects are and how much customization they require.
• The framework fits in to a new focus Microsoft under Satya Nadella to dig deeper into what specific industries need from its products, versus developing something that works for everyone.
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Microsoft is all about corporate customers and, under CEO Satya Nadella, the company has made its mission to go deep into the needs of specific industries instead of trying to make one-size-fits-all technology that works for everyone.

Crucial to that new focus is forging stronger ties with other companies, and Microsoft uses a category system to get customers and partners to think not just about what the company's technology can do now, but how they might work together to create new uses for the partners' or customers' needs.

When Microsoft is deciding how to work with a potential partner, it categorizes projects into what it calls "horizons" based on how ambitious the partnerships are, Microsoft executive Peter Lee told Business Insider this week. These horizons span everything from using the company's "bread and butter" tools like Office to the most aspirational projects that are intended to "change the game."

Lee said Microsoft uses the categories when it inks a "big partnership" with another company, but a Microsoft spokesperson said horizons are used generally to "help customers think about their technology deployment and goals."

Lee is a veteran of Microsoft Research who has transitioned to running the company's health care business at the behest of Nadella. Lee is responsible for finding new uses for technologies like artificial intelligence and cloud computing for Microsoft's health care customers and partners.

What can we work on together that will change the game?

Horizon One is the "bread and butter" of Microsoft, Lee said. Think of Microsoft's exiting tools, such as Office 365, Dynamics customer relationship management, and the Azure cloud. They require little customization.

Then there's Horizon Two, which involves custom engineering. This describes Microsoft's relationship with Walmart, Lee said, intended to take the company's "retail systems to the next level."

Microsoft and Walmart announced a partnership in 2018, which the companies describe as "a broad set of cloud innovation projects that leverage machine learning, artificial intelligence, and data platform solutions for a wide range of external customer-facing services and internal business applications," though they've been quiet about specifics.

Horizon Three is used to describe the most ambitious projects. Lee describes horizon three projects as a question Microsoft asks to potential partners, "What can we work on together uniquely in partnerships that would change the game and lead to real transformation?"

Microsoft's partnership with Swiss multinational pharmaceutical company Novartis is an example. The two companies are building an artificial intelligence laboratory intended to, among other things, improve research and gets drugs on the market more quickly.

It all ties into Satya Nadella's vision of 'tech intensity'

Horizons fit in with Nadella's vision of "tech intensity," which is basically the potential for its customers to grow by adopting technology and then building their own on top of it.

Through the tech intensity pitch, Microsoft is encouraging companies in all industries to adopt Microsoft's latest technology platforms and tools and then train their workforce to be able to create their own uses for advanced technologies like artificial intelligence.

Meanwhile, analysts expect Microsoft will ink more large partnerships this year, particularly as the company tries to grow its cloud business.

Salesforce in November chose Microsoft Azure as the public cloud to power its cloud software for marketing professionals. The deal followed Microsoft's other recent cloud tie-ups with companies including SAP and Oracle.

The deals help Microsoft get Azure in front of more customers and help it gain market share faster than if Microsoft did it on its own.