Project Description

RESULTS

Microsoft Turns Around A Flailing Business, Doubling Y2Y Revenue

The Challenge

The Microsoft team came to Strategyn with evidence that Microsoft’s Software Assurance offering was not providing the right mix of benefits to their customers. Traditionally, Microsoft had viewed Software Assurance mostly as a vehicle for the purchase of software upgrades. But at a time when IT budgets were facing increased scrutiny, renewals were declining—putting a significant amount of potential revenue at risk.

As one tech reporter observed, “There appears to be some disconnect between how Microsoft wants to sell its software and how businesses want to buy.”

Microsoft was under pressure to build additional value into their Software Assurance offering—and they needed innovative ideas to give customers more reasons to buy.


“We were a business facing a potential crisis. Using ODI, we were able to discover many new growth opportunities, pull together a valuable offering and reframe our marketing message around a PC lifecycle management offering. In a market under immense price pressure, Strategyn helped us grow a struggling business.”

Dave Wascha, Director

The Solution

Microsoft turned to Strategyn and the Outcome-Driven Innovation (ODI) process to figure out Microsoft’s best opportunities to add value for Software Assurance customers. ODI provided a step-by-step framework to uncover exactly what these customers were trying to accomplish, what they needed in a product, and how they would measure their success.
The Outcome-Driven Innovation process was execute in five steps:

01

Define the market

Microsoft focused their value creation efforts on two particular decision-makers—procurement managers and IT professionals—who were trying to complete the jobs of purchasing and managing a software license.

02

Uncover customers’ needs

The team interviewed 28 procurement managers, uncovering 76 customer needs, called desired outcomes, related to purchasing a license. They also interviewed 30 IT professionals, uncovering 58 desired outcomes related to purchasing, 81 outcomes related to managing a software license, and 34 other jobs related to managing software licenses. For example, customers were having trouble keeping track of the number of PC software licenses they owned. IT professionals were also having difficulty anticipating potential software conflicts when they deployed a new operating system.

03

Quantify the needs

Using ODI-based quantitative research techniques, Microsoft had 100 procurement managers and 298 IT professionals complete surveys to prioritize these desired outcomes.

04

Identify opportunities

The survey results revealed broad dissatisfaction with current licensing practices—many of the desired outcomes were underserved by existing offerings in the market. Microsoft discovered multiple opportunities to add value beyond just purchasing, ranging from improvements in software acquisition and deployment, to maintenance and training, to disposal of old PCs.

05

Differentiate offerings

With ODI results in hand, Microsoft knew exactly where and how to add value to his Software Assurance offering across all the various job steps. In fact, many pain points could be addressed by existing Microsoft offerings. For example, Microsoft already had solutions to keep track of licenses owned and to anticipate software conflicts.


“…we realized that we were only really engaging with the customer in one tiny piece of their job—the purchase of the software. But this was just part of a much bigger challenge that they faced. We were not engaging with them in many of these other areas that were very important to them and where they were very dissatisfied.”

Dave Wascha, Director

The Solution

This industrial heavyweight set up a 12-week project group to evaluate Outcome-Driven Innovation and pilot the framework for use on a wider scale, following the steps of the framework.

01

Define the market

Microsoft focused their value creation efforts on two particular decision-makers—procurement managers and IT professionals—who were trying to complete the jobs of purchasing and managing a software license.

02

Uncover customers’ needs

The team interviewed 28 procurement managers, uncovering 76 customer needs, called desired outcomes, related to purchasing a license. They also interviewed 30 IT professionals, uncovering 58 desired outcomes related to purchasing, 81 outcomes related to managing a software license, and 34 other jobs related to managing software licenses. For example, customers were having trouble keeping track of the number of PC software licenses they owned. IT professionals were also having difficulty anticipating potential software conflicts when they deployed a new operating system.

03

Quantify the needs

Using ODI-based quantitative research techniques, Microsoft had 100 procurement managers and 298 IT professionals complete surveys to prioritize these desired outcomes.

04

Identify opportunities

The survey results revealed broad dissatisfaction with current licensing practices—many of the desired outcomes were underserved by existing offerings in the market. Microsoft discovered multiple opportunities to add value beyond just purchasing, ranging from improvements in software acquisition and deployment, to maintenance and training, to disposal of old PCs.

05

Differentiate products

With ODI results in hand, Microsoft knew exactly where and how to add value to his Software Assurance offering across all the various job steps. In fact, many pain points could be addressed by existing Microsoft offerings. For example, Microsoft already had solutions to keep track of licenses owned and to anticipate software conflicts.

“It is highly unlikely that we would have focused on these outcomes, defined this feature set, or made the right trade-off decisions without having the benefit of Outcome-Driven analysis.”
RANDALL COE, Director of Product Development

The Result

With a more complete understanding of the jobs their customers were trying to accomplish, Microsoft adopted a lifecycle management view of the business. The company already had many solutions that would help customers achieve their desired outcomes across their lifecycle—they just needed to package them together in a cohesive and compelling offering.

Microsoft’s results were dramatic and immediate.

In the year Microsoft announced the changes to the Software Assurance offering, they doubled year-to-year revenue.

Between 2004 and 2008, Microsoft substantially grew the Software Assurance business and dramatically increased annual renewal rates. Customer satisfaction also increased, and complaints about Software Assurance dropped.

Microsoft discovered it was sitting on a growth business once value was measured from the customer’s perspective.

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“Strategyn’s Outcome-Driven Innovation process enabled us to view a very complicated job through the eyes of the customer. These insights allowed us to increase the value we were delivering.”

Dave Wascha, Director

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