Post #74: Learning in London; not meandering in Munich - Heptagon Capital – Production

Had it not been for the COVID-19 pandemic, your author would have been in Munich this week attending two fascinating trade fairs, Solar World and Automatica.

Post #74: Learning in London; not meandering in Munich

Had it not been for the COVID-19 pandemic, your author would have been in Munich this week attending two fascinating trade fairs, Solar World and Automatica. On the positive side, Automatica – a leading event for those interested in automation – has been rescheduled to December (Solar World will have now to wait until next June). Even more encouragingly, the time that would have been spent in Germany was filled usefully, attending two virtual conferences in London. There was the opportunity to listen to the likes of Microsoft and NVIDIA speak at the NASDAQ conference, while it was a particular privilege to hear Werner Vogels, the CTO of Amazon since 2005, give the keynote speech at the AWS Summit.

Amazon’s perspectives on the future are always worth listening to given not only its track record in innovation but also the leading position the business occupies within the digital ecosystem. Dr Vogels highlighted how many of the activities that we have all begun almost to take for granted in lockdown – from content (Disney) to gaming (Fortnite) and from video conferencing (Zoom) to e-learning (Blackboard) – all run on AWS. Put another way, “the cloud is powering the future” per Dr Vogels. Amazon attributed its success in cloud to having built strong foundations that are now easily scalable. It was also interesting to note that Amazon sounded notably more positive on the potential of machine learning (“no longer an emerging technology;” rather, one that “promises to be a game-changer.”).

The world, of course, does not stand still. While Amazon is the clear market leader within the cloud environment, Microsoft’s Azure business appears to be winning market share at present (a view we have heard recently from multiple sources). When asked about this, Microsoft attributed its success in the space to its “customer-first” which emphasised working with partners to create hybrid (i.e. public and private) cloud environments. Nonetheless, it was interesting to note that when asked about competitive threats, Microsoft called out Alibaba’s cloud business as the one to watch.

Much of the conversation with Microsoft centred on the current explosion in use of its Teams product (your author is a fan). Growth in Teams was described as “nothing short of phenomenal” with adoption of both the free and paid-for versions having “massively increased.” While Microsoft has obviously been pleased with its results – and the corresponding uplift that should occur in terms of customer retention rates – the most encouraging takeaway for us was that Microsoft continues to innovate. Per the company, Teams has “pushed us in a healthy way to develop product more than ever before.”

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