The soft power bulletin

Microsoft’s app store is tipping the scales

Microsoft has long been known for anticompetitive practices, even though the company is less scrutinized these days compared to Meta and Google. But the company’s commercial marketplaces, AppSource and Azure Marketplace, are often overlooked by consumer-focused regulators.

Although these marketplaces provide opportunities for thousands of independent software vendors, or ISVs, to build and sell applications, it’s also a way for Microsoft to maintain its market dominance.

• In some instances Microsoft has pushed ISVs to highlight Microsoft’s own software, while making sure their apps don’t compete too directly with Microsoft’s own wares.
• “For example, if your app had a chat system within to talk with your support team, you have to remove this because it’s in conflict with the chat feature of Microsoft Teams,” said Matthieu Giorgini, CEO of Waldo, a desk reservation app.
• The company also provides discounts on products and services that could make Azure cheaper to use than AWS or GCP, for instance, and enlists partners to help spur the adoption of products like Microsoft Teams, Sharepoint, and Viva.
• The majority of Microsoft partners Protocol spoke with are pleased with the partnership overall, but that could change.

At any time Microsoft could shift the sands underneath its partners: by hiking prices, removing their apps from the store, developing a competing product, or making it harder to receive benefits.

• For example, Microsoft is making a series of changes to its partner program that will make it harder for smaller ISVs to gain access to lead generation and marketing support.
• Microsoft also doesn’t disclose how it manages app discovery, which makes it easy to imagine the company adjusting its algorithm to give preference to its own products and services.
• “I mean, the featured apps, it’s one of these things where we’re a little guarded as to what exactly goes kind of in that algorithm, as you might expect,” said Jake Swenson, Microsoft’s vice president and general manager of commercial marketplace.

Microsoft claims it’s not gaming the power dynamics of its marketplace.

• “I am not interested in gaming or steering the growth of the ecosystem so much as I am reducing the friction to [business-to-business] commerce happening,” said Swenson.
• But regardless of how explicitly or not Microsoft tries to control its marketplace, every action the company takes will have an impact, for better or worse.

Read the full story of our latest installment in the Inside the Enterprise App Store series here, and stay tuned for next week’s report on AWS.

A MESSAGE FROM AUTOMATION ANYWHERE

Today, we expect instant results from our every action, from calling an Uber to ordering a t-shirt. Companies can no longer afford to not adopt technologies like automation. We are now living in the Automation Economy – a new world that requires agility and a complete reimagining of how we work.

Learn more

Chip industry in turmoil

Here at Protocol Enterprise this year, we have warned several times that the good times experienced by the chip industry over the past several years are drawing to a rapid close.

Memory makers have warned of a steep decline in demand, and consumer chip sales have dropped rapidly enough to trigger plans for big layoffs at Intel and to hurt revenue at AMD and Nvidia alike.

The export controls enacted by the Biden administration aren’t helping either.

The situation doesn’t appear likely to improve any time soon, at least the way industry bellwether TSMC executives tell it. “We expect probably [in] 2023, the semiconductor industry will likely decline,” CEO C.C. Wei said in the earnings call. “But TSMC also is not immune.”

For a tight-lipped, conservative company like TSMC, this is about as strong a warning as the tech industry is likely to get. And to put a fine point on it, TSMC said Thursday that it planned to curtail its spending on new factories and tools to $36 billion, down from its prior guidance of $40 billion to $44 billion.

So far, the drop in demand and the adjustments TSMC has made are because of the quickly drying-up market for consumer chips.

The good news for chipmakers is that data center sales and the automotive markets have not begun to decline … yet. TSMC gets demand forecasts from those customers, and Wei made clear that there haven’t been significant enough changes in those plans to cause company executives to make major adjustments to their plans for 2023.

But the CEO said the company wasn’t ruling out the possibility of a correction or a drop in demand next year, hence taking a more conservative approach. “They might have some correction also, but we did not see it right now, to be frank with you,” he said.

It’s not privacy vs. security anymore

In the last few years, the roles of privacy and security executives — and the budgets they control — have grown significantly as organizations have worked to stymie the growing threat of cyberattacks and navigate the ever-changing landscape of data regulation. But good privacy and security strategies are often as much about people as they are policy, and the push and pull between the two remits can sometimes create friction within an organization.

Enterprise moves

Over the past week Intel, Oracle, and Red Hat named new execs; ClickUp made several new hires; Five9 and Zscaler faced resignations; and more.

Stuart Pann was promoted to chief business transformation officer at Intel. Pann was formerly senior vice president of the corporate planning group.

Maria Smith was named the new chief accounting officer of Oracle. Smith replaces William Corey West, who is retiring December 31 of this year.

Red Hat named Carolyn Nash senior vice president and COO, Robert Leibrock senior vice president and CFO, and Jim Palermo vice president and CIO.

ClickUp hired Gaurav Agarwal as chief growth officer, Will May as chief revenue officer, and Marshall Tyler as chief strategy officer.

Rowan Trollope resigned as CEO of Five9 to join a privately held pre-IPO company. Trollope will be replaced by former CEO Mike Burkland.

Amit Sinha resigned as president of Zscaler to join a privately held company. Sinha will remain on the board of directors.

Liz Fong-Jones was promoted to field CTO at Honeycomb.io. Fong-Jones was formerly principal developer advocate.

Richard P. Wallace was appointed to the Splunk board of directors. Wallace is currently the CEO of semiconductor manufacturer KLA Corporation.

Monica Pool Knox was named chief people officer at Domo. Knox formerly led global talent management for Microsoft.

Envoy hired Ramki Venkatachalam as CTO and Jon Fan as CPO. Venkatachalam was formerly an engineering leader at Google, and Fan was a product executive at Box.

Phil Coady was named CRO at Bionic. Coady was formerly COO of AppDynamics.

Nathan Gooden was appointed CFO at Squarespace. Gooden was formerly CFO of Amazon Alexa Worldwide.

Around the enterprise

Out of Office: Microsoft plans to rebrand its iconic suite of office productivity software to “Microsoft 365,” which, sure, fine, whatever.

A MESSAGE FROM AUTOMATION ANYWHERE

Today, we expect instant results from our every action, from calling an Uber to ordering a t-shirt. Companies can no longer afford to not adopt technologies like automation. We are now living in the Automation Economy – a new world that requires agility and a complete reimagining of how we work.

Learn more