Steve has yet another Chat with Charles

I have had my head down working on some big things since RapidStart CRM growth exploded, and it has been a while since you heard from me. Well, I'm getting back to it with a follow-up chat with Charles Lamanna who recently took over for James Phillips as head of Business Applications for Microsoft. This was my fourth chat with Charles, and it was interesting to back listen to them in order. It really gives you a sense of where Microsoft has come. I managed to catch him in his office having just wrapped up their year-end. Enjoy!

 

Transcript Below:

 

Charles:
Hey, this is Charles Lamanna.

Steve:
Charles. Steve Mordue. How are you doing?

Charles:
Good. Great to hear from you, Steve. It's been a long time.

Steve:
It has been a while. Have you got some time for a chat?

Charles:
For you, anytime.

Steve:
I appreciate it. Well, I guess the big news for you obviously is putting on the big boy hat, huh?

Charles:
Yes. I moved up an extra floor in the Advanta building in the Microsoft Campus.

Steve:
Oh did you?

Charles:
No, I'm just kidding. But metaphorically speaking at least. Because for folks that don't know, James Phillips leaving in March of this year, I kinda stepped in across all aspects of business applications of Microsoft. And, over the last four years, I've gotten to know the place, know the people, know the business and I'm super excited about the opportunity. And I think the future has never been brighter for business at Microsoft.

Steve:
Well, I never got the feeling that James held you back, or any of the folks on your team back, but he certainly, we have to give him a lot of credit for really taking this thing to a whole nother level. You weren't here before, I don't think, at least with the business apps, but it was really run by morons before he took over. And he completely turned that thing around and turned it in a whole nother business. And now with you taking over, I'm expecting that to continue. I don't know if there's been some things that have been in your bag that you've wanted to do that James was keeping you from, that you're going to pull out, or if you're just going to continue the path, or what's your thinking now that you've got that gavel?

Charles:
So definitely not held back. I would say I was super fortunate I worked for James for, I think seven, eight years in total. So I was able to learn a bunch and he was without a doubt, the most supportive manager I've ever had in my career, in terms of both enabling and clearing paths for what we wanted to do from a vision and dreaming perspective. And if it weren't for his support, things like Power Apps would have never gotten off the ground. So, definitely. And I think as we go to the future, we have this amazing foundation. I mean, BizApps is a major and key component and pillar of the Microsoft Cloud.

Charles:
10 years ago, you probably would've thought that impossible. Right. To have Dynamics and Power Platform alongside Azure and Office. Now that we're here, let's go take it to the next level. And that's the push, and it's continuing a lot of the great innovation we've already done from a data-first, AI-first approach. Kind of sprinkling in some more collaboration with teams, and really revisiting the end-user experience, the platform, to go increasingly modernize and scale it and make sure that all our components from CRM, to ERP, to Power Platform work great together.

Steve:
I don't think it could have achieved that status with Dynamics 365 alone. It really took the Power Platform coming into being, I think, to give it the breadth that it needed to be able to get there. With Dynamics 365, we didn't have apps for users to do small things, there was no way it was going to permeate an organization the way the Power Apps do.

Charles:
Yeah. Yeah, that's right. I say two things are interesting. The first is, Power Platform has allowed us to help more users and more customers with business process transformation, which is what BizApps are all about. Right?

Steve:
Yeah.

Charles:
How do you make your sales processes better, your financial processes better, and Power Platform really turbocharged that. And that earned us credibility in a lot of those departments and with a lot of those users, and we have some great data about every user who adopts Power Platform is significantly more likely to adopt Dynamics within the next year or two. So we see that symbiosis working in a way which is incredibly customer-friendly, and it helps our business. Second thing is Power Platform has even helped us reimagine parts of the Dynamics apps themselves. And I think probably two of the best examples are the connectors, which are key to the Power Platform.

Charles:
You see the connectors starting to show up inside all these Dynamics apps, like Customer Insights uses Power Query for data ingestion, or Viva Sales even connects to Salesforce. So there's this amazing interoperability that we have, and also enabling the end-user. Our team built Viva Sales, even though it's not in the Dynamics or Power Platform brand. But it's this idea of having an integrated experience in Office for sellers, built on connectors and built on the Office integration. So it's changed the way you think about some products, and it's also helped us go expand our user base.

Steve:
Yeah. I saw I was on a PGI call with that yesterday. Very, very cool stuff. At the last PAC meeting, I was supposed to be on the Viva Sales round table, but I'm like, "Yeah, that sounds boring. I think I'm going to go to this one." And I really, I went to the wrong one, I missed a good one. But you know where I am, right? I'm on the platform.

Charles:
Yep.

Steve:
And we're exploding. Our app is continuing to grow on the platform as a low-cost simpler alternative to Dynamics 365 for companies that aren't ready for that. And I'm always bugging you about, "Hey, that cool new feature you guys got in the first-party. When are we going to get that at the platform level? So ISVs, and people that are just building their own stuff from scratch, could take advantage of some of the syncs." We got the Outlook app a while ago, we've been getting some things. And when I saw Viva Sales, that was probably my only disappointment was that, at least as I understand it, it's hardwired to Dynamics or hardwired to Salesforce. And I get that trying to play those two against each other, but it's leaving guys like me out in the cold.

Charles:
Well, I'd say for Viva Sales, the intent is to support any CRM, and I really do mean that generally. And even customers, because there are customers out there that we talked to today who have homegrown CRMs, they coded 15 years ago. They have a whole dev team still working on it. The idea is to support interoperability with your account records, your lead records, your opportunity records, standard pipeline data. And to do that in a way which works through the connector. So today it'll earn V1, it'll only be Dynamics in Salesforce, but the intent is to make that be a general purpose adapter. And you could have a RapidStart CRM connector, which shows up and supports the contacts the way we want, and it would be connectable. That's not going to happen in the next three months, but that's the ambition.

Steve:
I can call you in four.

Charles:
I go down and said... What was that, in four Months?

Steve:
I can call you in four months.

Charles:
Yeah. Yes. Yeah. I might not pick up the phone then in four months, no I'm just kidding. Because even talking about, if people are even on Seibal. We should be able to support them with their sales. Because the idea is, you shouldn't have to transform the seller experience at the same pace that you transform your core CRM, your core system of record, and that's just the way the world's moving.

Steve:
Well, I love the idea that one of the challenges that CRM has always had, of course, is user adoption. It's one more place they need to go to do something. Outlook app helped with that, getting data into CRM without them having to actually go to it. It seems like yet another way for people to engage with their CRM without actually realizing they're engaging with their CRM.

Charles:
Exactly. Yeah. It's almost like ambient... Yeah for sure. Sorry. Yeah. I say it's almost like ambient CRM basically. How do you make it so that, instead of the user goes to your CRM, the CRM goes to the user where they are. And the outlook app was the beginnings of that. Some of the Team's integrations we've done are the beginnings of that. And that Viva Sales and that whole Viva idea is how do you elevate it? So anywhere you go, your CRM data is accessible without you having to go to a different user interface.

Steve:
Very cool. Very cool. So I ask you every time we get on a call about exciting features that are coming up. And in particular, maybe even some features that have launched, that didn't take off the way you thought they would and people are just missing something. We have this problem with our app sometimes, people don't understand and so they don't move forward, and it would be perfect for them. And I'm sure there's lots of features and capabilities that you guys broke a sweat building, and know in your heart, this would be awesome, but people don't seem to be getting that. What's a good example of one of those?

Charles:
I'd say a product which we've had a capability, where we've had a lot of customer usage from a small number of customers, but very deeply and with huge impact, and we wish were with more customers, is probably Conversation Intelligence. I'm not sure if you've seen that around the Sales app, and where that actually will sit in inside of say a phone call or a meeting and help you generate action items, and summaries, and coaching, and help you understand sentiment, and listening and talk ratio. We've used that internally at Microsoft with great success. So our digital sales reps and the folks who work our phones, they are diehard fans. We have this amazing video we released a couple months ago where we actually went out and interviewed these digital sales reps and their managers, and they just were going on and on about how great it is.

Charles:
And that's rare where you hear that about a piece of technology for a seller. And we have a few other external customers that have gone through that same journey, where they have a thousand digital reps, 2000 digital reps using this and just in love with it. But it's not as pervasive as we thought it would be at this point. And it's one of those things where, it's a product discovery, and easing people into the capability, because then you got to go out of your way to enable it and configure it. So we're doing work now to simplify it, and make it more accessible to more users. And we're doing that partly through Viva Sales, like conversation intelligence, the major capability of Viva Sales.

Charles:
And the second thing is also, there's even some culture aspects to it. Because if you use it, it's generating transcripts and recordings of a call, and not everyone's necessarily super comfortable with that. So we're even working about how do you enable more features without having to record the call, and how do you enable capabilities without having to get a transcript? Or how do you make it more natural to say, "Hey, I have a sales co-pilot thing. Are you okay if I enable it?" So there's a lot of interesting things, it's never just a technology problem. It's also a discovery and a, I'd say, change culture management problem.

Steve:
Yeah. I think that's been the challenge with anything AI really. A lot of people, it seem to think it might be a little too futuristic. They look at the benefit and think that's really cool, but they have no idea how to get it. And AI just in general, doesn't feel that approachable to people, even though in certain cases, it's extremely approachable. You don't have to do anything, it's approaching you. So it's a learning curve, you got to wait until my generation dies off and then you guys will see.

Charles:
I don't have as myopic of you, as you Steve. But I would say that, the big thing that we have to do is, there's been this evolution of AI where the AI is going to be something that automates away what humans do. And what we've realized is, AI is not even remotely close to being able to do that. But what AI can do, is it can turbocharge the people that use it. And so what we're trying to do is, how do we go expose these AI capabilities in a way where you or anyone else who uses them feels so much more productive. And just like when you first got the ability to use PC or a spreadsheet, you're like, "How did I exist before?" We're hoping we'll get to the point where, once you start using some of these AI assistive capabilities, like we've done in Conversation Intelligence, you'll be like, "How did I ever do a customer call before? And I had to take notes on paper while listening as opposed to having the AI take notes for me?" Yeah, exactly.

Steve:
I'm terrible about that. I'll be chicken scratching over here while I'm talking to people, and then we get off the phone I look at and I can't understand a word I wrote.

Charles:
Yeah. I like post-it notes next to my desk where I'm always writing stuff down.

Steve:
Yeah. So what else cool's coming on the horizon that we should be... That sounds like the Conversational Intelligence has been around. Sounds like Viva Sales is going to really bring that to the masses, so that one's on a path. What are some other new things that we should pay attention to that you're able to talk about?

Charles:
Yeah. Another one of my favorite things, which we've started to reveal some capabilities going back to last Ignite, so November of 2021. And we have some big announcements planned for the second half of 2022, is the new Contact Center related capabilities inside of Dynamics Customer Service. We have Omnichannel, we announced integrated voice, the Nuance acquisition closed, and the Nuance contact center AI team joined my group to align with customer service and contact center. So there's a lot of really exciting innovation happening there. And I'm really excited about the potential to make it super easy to get a comprehensive customer engagement story, without having to wire up eight different pieces of technology and do a ton of different complex integrations. So that's a place where there's a lot of innovation, there's new capabilities, Omnichannel, Power Virtual Agent, even the same type of conversation intelligence applied to support cases, Nuance for their Gatekeeper, which is identity and authentication verification based on voice and biometrics.

Charles:
There's a lot of cool stuff in that space. And that's one of the places where so many of the customers we work with are trying to improve the customer experience, and to go reduce costs. So I say that's a place where we've had a lot of exciting announcements over the last six to nine months, and we have a whole bunch more planned for the next six to nine months. So I say, stay tuned. And I won't say more than that to avoid getting in trouble by leaking information. But I just say, that's a place to really pay close attention.

Steve:
Who knew call centers could be cool?

Charles:
Yeah, exactly. Who would have thought that I'd be talking about contact centers, and how it's the next generation or next frontier of AI applications in 2022.

Steve:
Oh, well. Well I do have to thank you guys for the low-code advances you've continued to make in that platform. It actually allowed us to launch a, I think we're the first ones to try this, a new Service as a Subscription. Which includes awesome includes deployment, customization, training, everything except development code, which as you know today in so many of these projects, there's so little, if any of that.

Charles:
Yeah.

Steve:
Just a few years ago, if you tried to offer something like this, it really would be little more than a support agreement. But now, we're deploying, we're building, we're customizing, we're building entire things for customers all on a monthly subscription. It's an interesting concept, and hopefully I don't go broke, but...

Charles:
But you know what, it's fascinating. I literally was talking about this with the Power Platform team this morning. About a future where we'll have more partners who are able to sell a comprehensive service agreement, which includes the cloud hosting licenses, but also some incremental custom development and also ongoing maintenance and support. And it'll be almost this whole new industry, which will push a lot of innovation to the edges of the ecosystem, right?

Steve:
Yep.

Charles:
Not built by Microsoft, built by partners who really understand particular regions, particular industries, or particular segments. Like y'all are targeting a space where we're not trying to go take Dynamics, CRM, and go bring it down there. You can go build a world-class experience on top of our platform and provide a very much all-in-one, which exactly serves the needs of that audience and that market. And we can stay focused on building the super horizontal platform, which has great performance, great usability, incredible power, those types of things.

Steve:
Yeah, it sounds great. I'm glad that we had the same idea you guys did. I'll let you know, in a few months, if it was a smart one. Time will tell.

Charles:
Yes. Yeah.

Steve:
So, how are the rest of the team doing? It seems like some folks have moved around a little bit in the org, who's moved where?

Charles:
Yeah. So one of the big things we've been really focused on the engineering side, for the engineering organization, is bringing together strength from a product perspective that target the same type of user. And for example, we have a new customer experience platform team underneath Lori Lamkin, who leads all of our Dynamic Sales apps. So the Core Sales and Viva Sales, as well as commerce, as well as marketing, as well as customer insights. And it's very much focused on revenue generation, customer journeys, customer experiences. And what's great is by bringing those assets together, we have a great answer for B2B customers, as well as B2C. Like if you want to have self service, no touch eCommerce experience with lightweight telesales, you can do that all with those sets of applications. If you want to do a high relationship, high touch B2B sales process, you can do all of that. You're not going to use commerce, but you're probably going to use customer insights and sales, and maybe a little bit of account-based marketing.

So we brought together these things, which are solving similar problems under a single leader. And that way the engineering teams can go back and forth between these different places to finish out full end-to-end customer journeys. And so that's a big area that we've spent a lot of time on, and that's a place where it's really the biggest and fastest growing category for us in the Dynamics 365 application portfolio. So that's one interesting example. Jeff Comstock, folks may know him. He's been around Dynamics 365 for a while. He continues customer service, he leads omnichannel, he's done some of this great expansion around the contact center for us. Ray Smith leads our supply chain team. So that includes things like more supply chain.

Steve:
So Ray moved?

Charles:
Yeah, yeah, yeah. He by way of acquisition to SAP then moved. He worked in Dynamic Sales for a bit, where people may have known him. And now the supply chain, and really helping us be this new data driven, AI powered, supply chain story for core supply chain execution. Then we also had some exciting announcements around process advisor and the minor acquisition to help turbocharge that. Or Georg Glantschnig who leads our finance room of the house. And basically we call the room of the house, is the collection of products which focus on serving the CFO and the finance department. And that includes the Suplari acquisition, which we had done a couple years ago, as well as the Core Dynamics, 365 finance, HR, and project operations products.

Charles:
So you can see how we started to build these critical paths around particular departments and particular lines of businesses with our products. And in addition to that, we also of course have Power Platform to support all of it. So it's amazing to see these things come together and converge. And we've been on this incredible run of innovation around Dynamics. I was counting it earlier this year, 29 different products in Dynamics, and really coalesced around these specific areas where we have a lot of energy, and also very well understood. I'd say synergies between the products that we have. So I'd say exciting times. Very exciting times.

Steve:
Customers are starting to understand it better also. Business Applications was the same thing for a long time. Then it spent the last five years reinventing itself every month, and new things exploding out of Advanta. And I think a lot of customers were having trouble just keeping up with... It's like little whackamole for them. And it takes a little time for customers to absorb what's happening, and what it's for, or what it does, and then to adopt it. And we're seeing that now. We used to have to go out and promote Power Apps to people who didn't understand what this was, or why it was. And now it's the opposite. They always come to us, looking for Power Apps, looking at those sorts of things. So that understanding seems to have finally permeated down to the customer level. But boy, it took a while.

Charles:
Yeah. It warms my heart. And I would say one of my favorite books is by Jim Collins, 'Good to great.' I always recommend it to folks on my team to read it. And he talks about this idea of the flywheel. It takes time to get a flywheel spinning, for the first period of time it looks like it's barely moving, but then eventually it's going super fast and it's just a blur. And you need to be consistent, and convicted, and believe in the strategy and the approach. And what's amazing about BizApps is for the last four years, we've been on the same mission, the same vision, the same ambition. And we just spend all the folks in advance at turning that flywheel, turning that flywheel. And it's started to reach that blur phase where it's spinning so fast, you can't even see it.

Charles:
And this, this all started years and years ago with a ton of work, but we're really at that magical moment where customers know what Power Platform is. Customers know that Microsoft gets customer experience and customer engagement. They know that Microsoft can help them optimize their supply chain. And what the good news is once that thing is going, it really builds upon itself, and I think it'll only continue that momentum further. And my favorite story is, I used to always do these executive briefings at Microsoft where we have executives come in from our customers to Redmond and we have a briefing center. It's very nice. And I would always say, let me talk about Power Apps and low-code.

Charles:
And everybody gives me a blank stare like, "What the heck is Power Apps? What the heck is low-code?" I go in those meetings now, and people know what Power Apps is, and they know the low-code strategy. And the only question is, "how?". Not, "should I?" Or "if?" "How do I do it with you, Microsoft?" And so different from three years ago. So anyway, so you're exactly right. A long winded answer, but I'd say it's exciting to see all of these things come together, and the benefits of just consistently repeating a message that resonates with customers.

Steve:
I would say at least three quarters of my customer calls today, they're bringing up right out of the gate, "We don't want any development. We want to do everything low-code, no code." So this is coming from the customer side where we used to have to explain to them what low-code, no code meant. Now they're coming demanding, "I only want low-code, no code." I think that they've come to this realization that, while low-code, no code might not be easy enough for your mom to do, it doesn't require a developer, and code does require developer. And once you've got this little blob of code in your environment, it's a black box for you. And so they don't want any of these black boxes. They want everything to be accessible.

Steve:
Use your knowledge to build us something complex out of low-code, but then I can still go back in there later and manipulate it, adjust it myself, or our team. So they have absolutely bought into that. And I know we originally, a lot of us partners were concerned early on that this was going to reduce the workload for partners, while our workload is more than it has ever been. Although the developers on the bench don't stay as busy as they used to. We've completely pivoted the team from developer heavy to now, we haven't even got a good title for them. A citizen developer doesn't sound right. We tell customers that, but citizen developers is what we've got so...

Charles:
This guy we found on the street, or gal found on the street, we just asked them to start building out. But no, it makes sense. There is almost this new role which is, it's not just pure coding expertise, it's technical development concept expertise. But even more importantly is business process and solution expertise. And that fusion of those two skill sets, that's the magic. That's what makes it special, because you understand it.

Steve:
Yeah. The challenge that we have with this brand new model that we just launched, because, first of all, being the first one out there is not always good because people have no idea what you're talking about. They're trying to compare it to other things. But we've got this little caveat that it's all you can eat, everything, except development code. And trying to define what that is hasn't been easy, and you get these customers coming in, "Oh, we're going to need a lot of customization. So this isn't going to work for us." And so you may need a lot of customizations, but you don't need any "development code".

Charles:
Yeah.

Steve:
And getting them to grasp that development code and customization are not synonymous, not even close.

Charles:
Exactly.

Steve:
Development code is a very small component today of customization. And once I think that they understand that, then we'll probably see more partners coming into a model like this. Because it makes a lot of sense for customers, makes a lot of sense for partners.

Charles:
Yeah. And if you go look at building solutions that last a decade, this is to your point, code is this little black box opaque thing, which is hard to maintain over time. If it's no code, low-code, it's easy to open it up and reconfigure as business requirements change. And it's how you build solutions that last. And I think we're getting to the phase with business software where customers are expecting to make long term technology bets. You're not going to replace your CRM every five years from now on. It's like building manufacturing plants and warehouses. These are big investments that you need to be able to amortize over a long time, to justify. And so I think to your point, no code doesn't mean no flexibility, no customization, also doesn't mean no agility. It just means you're doing it in a different way. Couldn't say it better myself.

Steve:
All right. Cool. Hey, listen, I'm going to let you go. I really appreciate you taking the time out of your day here when I caught you, to chat with me about this stuff, always fun talking to you Charles. I'm going to call you in four months and ask you about Viva Sales for the platform.

Charles:
Sounds good. Sounds good.

Steve:
I've got you on record there.

Charles:
So really appreciate you taking the time, giving me a ring, Steve. Hope you have a great rest of the summer.

Steve:
All right, man. Have a good one.

Charles:
Yep. You too.