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Will Microsoft Customer Experience Platform Compete in the CX World?

6 minute read
Dom Nicastro avatar
Microsoft debuted the Microsoft Customer Experience Platform in November. How will it compete in the larger CX market?

The $9.5 billion customer experience market saw major activity over the past few years. SAP acquired Qualtrics for $8 billion then took it public. Medallia went public. InMoment acquired MaritzCX. Zendesk acquired Momentive and its SurveyMonkey brand.

Now enter a major play from Microsoft: the Microsoft Customer Experience Platform. Enough to make CX vendors quiver? Maybe. But will the traditionally enterprise internal-facing, employee-experience business software giant be able to make a considerable dent in the customer experience management market?

“I believe the competition will come in the form of access,” said Sean M. Atkinson, CEO and founder of Majority Media. “Microsoft can help themselves by leaning into their search engine resources. That gives them a large enough audience to perform their own form of A/B testing with to get it right, whereas Qualtrics/Medallia are relying on a smaller base to pull from.”

Inside the Microsoft CX Platform

Microsoft isn’t debuting CX software. The Microsoft Customer Experience Platform will live within the company’s Dynamics business solutions.

Dynamics 365 is a set of intelligent, cloud-based applications across ERP, CRM, Customer Insights, Power Apps and Power Automate; and on-premises ERP and CRM applications. That’s part of Microsoft’s productivity and business processes applications, which hauled in $53.9 billion in revenue in the fourth quarter of 2021 behind its other two major segments: intelligent cloud ($60.1 billion) and personal computing ($54.1 billion).

The Microsoft Customer Experience Platform will sit alongside existing products and services including Microsoft Advertising, Dynamics 365 Customer Insights (a customer data platform), Dynamics 365 Marketing, Dynamics 365 Commerce, Microsoft Promote IQ, Microsoft Clarity, Microsoft Azure Synapse Analytics and Microsoft Azure Purview.

Microsoft touted the following benefits in a press release in November announcing the CX platform:

  • Full ownership of customer data
  • Out-of-the-box AI and insights to predict customer intent and deliver the right content on the right channel at the right moment.
  • AI-orchestrated journeys

Related Article: Microsoft Updates Customer Data Platform

Dynamics Play All the Way

So where does this new platform fit into its CX ecosystem since it already has a robust software suite here? Microsoft already has an existing customer data platform, for instance. We know it has Dynamics CRM, which tries to compete with Salesforce and Oracle. It’s unclear where the Microsoft Customer Experience Platform sits in relationship to that exactly; Microsoft officials weren’t currently available for comment with CMSWire.

The Microsoft CX platform will be a Dynamics platform play because many capabilities from the Dynamics platform are leveraged within the CX platform, according to Venu Gooty, VP of digital strategy at HGS Digital. Additionally, by leveraging customizable modules using Power Apps and Power BI to complement the out-of-the-box features from the CX platform, organizations can build more sophisticated solutions tailored for the business, he added.

Since CX touches many aspects of sales, marketing and customer service, Microsoft might have relevant relationships to which to expand. The key, according to Gooty, will be to paint the vision of a future for customer experience leveraging the CX platform to the C-suite/customer experience leaders in order to gain trust and business. “We think the CX platform is targeted towards sales, marketing and customer support organizations,” Gooty said. “These are the teams that most interact with customers. Businesses are starting to bring head of CX [Chief Experience Officers] within the organization. It’s targeted more at those roles.”

Will Microsoft CX Platform Meet the Digital Workplace World?

We already know about Microsoft’s strong grip on the enterprise digital workplace and employee experience market. Will the CX platform be able to successfully integrate with existing digital workplace applications like Office Commercial (Office 365 subscriptions, the Office 365 portion of Microsoft 365 Commercial subscriptions, and Office licensed on-premises) that composes Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance and Skype for Business? Is there some potential for a CX meets EX play here?

Learning Opportunities

Atkinson sees the Microsoft Customer Experience Platform fitting in nicely with their digital workplace offerings. It can serve as a “foot in the door” to conversations it may have missed out on by changing perceptions of who they are and who they serve.

“This opens the door to go from the workplace to SMB’s and beyond,” Atkinson added. “...At the end of the day it always comes back to the customer and their goals. If you can provide a solution that allows a business to streamline their process and provide a better experience, you’ve got a chance to compete in the market.”

It's the Right Time to Move into Customer Journey

Microsoft stands a shot of at least making some noise based on the overall change of perception Microsoft has been working on, according to Atkinson. Between Bing and Microsoft’s push to become known for shopping recommendations, this CX platform and the new Windows 11 push with Microsoft Edge as the default browser makes Microsoft a part of a lot of CX conversations.

“I think that on a whole that CX has and always will drive the market,” Atkinson said. “Microsoft making a push to enter into the customer journey is a wise move on their part. I see Microsoft entering the mix at the right time in that journey. Customers are more knowledgeable about what they want, and willing to switch things up to follow those that have the answers they’re looking for.”

Microsoft’s smartest approach is to not box itself in and explore all options. The last thing Microsoft wants to do is thumb this down to being an add-on. “From a marketing perspective that messaging should be secondary,” Atkinson said. “Promoting it as a standalone that plays nicely with the suite leaves room for more of an agile marketing approach. They’ll need to pivot to the competitive response. If I had to guess we’ll see an agile marketing campaign built around it that doesn’t stick with just one approach.”

Related Article: Microsoft's Innovation Happened at the Intersections at Ignite 2021

Microsoft Needs to Take Lego-Block Framework Approach

Gooty said Microsoft’s partner-friendly organization will benefit its push to roll out the CX platform. The partner ecosystem can serve as a framework of various products that needs to be assembled as Lego blocks to make it specific to a customer use case, he added. “This is where ISV partners can leverage the toolset to build custom solutions for enterprises,” Gooty added. “The CX platform will definitely help Microsoft suite customers to upgrade and add new capabilities to the business.”

Customer Experience is very different from one business to the other because enterprises will already have different products providing certain functionalities. “This is where Microsoft,” Gooty said, “needs to complement the existing tech stack, which is why the lego-block framework positioning works best for Microsoft.”