Innovating with the next generation of IT

May 3, 2017   |  

We’re in an era of tremendous change and an innovation renaissance.  Numerous trends are coalescing, resulting in bigger opportunities and smaller barriers.  I lead an innovation group at Microsoft focused on incubating new technology trends and bringing them to life in the enterprise—giving us a view from the driver’s seat.  In the past, we shared insights on strategies to deliver modern apps, building an IT incubation engine, some of our successful incubations including Campus Experience, Lobby Experience, and our current efforts in enabling the Internet of Things (IoT) in the enterprise, among others showcases.

There’s been plenty of interest in how we innovate.  While we have shared a bit on our work and high-level strategies, we have not shared as much on our model and team.  This piece touches on that to provide a few reference points for your own IT innovation journey.

Let’s start with a question: “Why a team focused on innovation?”  Presumably, innovation is just something teams should do, and many teams at Microsoft innovate.  While that is indeed the case, part of the rationale behind establishing an innovation team had to do with flexibility.  The idea was to create a model to innovate in a more unbridled way, augmenting traditional IT functions.  The aim is to focus on seeing around corners and learn primarily through experimentation versus requirements—maximizing “go anywhere” flexibility to chase the next generation of IT services and experiences.

Functional focus Innovation focus
Charter Single business function or shared platform focus Best innovation opportunity across business, R&D teams
Scope Business requirements driven, opportunity to innovate on top Experimentation, creativity driven; opportunistic business value measures
Funding Business sponsorship generally required Potential for mix of centralized IT funding and business/R&D sponsorship for flexibility
Value Understood, time tested To be proven each time, iterative based on learning
Innovation happens everywhere, whether a traditional functionally aligned team or one oriented towards innovation.  There are trade-offs to either approach.  Yet an innovation focus has perhaps even more meaning given the current era of digital transformation.  The biggest opportunities may create whole new business models or experiences that transcend or alter functions in a meaningful way.  The technology opportunity may cross into multiple verticals or business segments.  Therefore, a flexible model can be key to self-define the most sensible boundaries and focus areas to truly capitalize on a given opportunity space.

Another key part of the thinking behind our model had to do quite literally with the next generation of IT, our early-in-career talent.  We initially started the team entirely with new college hires—and have since evolved to a blend of senior and junior talent.  With our CIO’s sponsorship, we wanted to get new folks excited about IT—and unleash the creativity that comes naturally as a digital native.  A team like this further demonstrates that commitment to early talent and puts it into action.  And it’s ultimately about the organization, not a single team.  To that end, as part of our overall early-in-career model, we rotate people in and out on a regular basis to spread what they learn and new ways of working across the company.  While regular turnover presents obvious challenges for us, it serves greater organizational, cultural, and developmental purpose which we embrace—while also ensuring fresh perspectives always enter our work.

So how do we measure success?  It isn’t simply about app uptime or performance nor business requirements met.  It is about what we learned, capabilities we created, and the value we deliver.  We do look at metrics like number of active users, usage, and satisfaction of our services—but value can and should take several forms.  For example, with IoT we’re measuring value three ways.  First, by creating capabilities that enable Enterprise IoT readiness for our organization.  We’ve built cloud services, are establishing enterprise-grade IoT hardware standards engaging with vendors/partners, and are helping address security and manageability considerations.  Second, we are building experiences targeted to employees (productivity benefit) and the business (facilities space optimization) aimed at saving both time and money.  Finally, we are working with our product organizations sharing our work to create opportunities for our products and customers—true digital transformation that isn’t just internally-focused, but can also impact our business and the world at large.

Key takeaways


  • An innovation team can help maximize flexibility to chase broad opportunitiesSuccess can be about what you learn, the capabilities created, and value delivered
  • It can serve as a great launch pad for rotational early-in-career talent
  • Innovation should happen everywhere, and be in support of the broader organization


  • Success can be about what you learn, the capabilities created, and value delivered
  • In the shorter-run, learning and iteration is key; longer-term, clear value measures matter
  • Judgement from experience is key to balance short-term innovation with long-term results


  • Like many things, executive sponsorship is vitally important for innovation
  • Support for thoughtful risk taking and an appreciation for how value is measured is key
  • Allowing space for teams to behave like agile lean start-ups in the enterprise is fundamental
I hope this provided some useful context on a differentiated approach to innovation.  To learn the latest about our current work, see this overview on Smart Buildings.  You will continue to see more on the Microsoft all-up innovation and digital transformation journey in the weeks and months ahead–including more on our enterprise IoT journey.  Onward!

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