10 Insights From Microsoft’s Latest IoT Signals Report

  • One in three enterprises is increasing their investments in IoT as a result of Covid-19.
  • 79% of enterprises adopting IoT see AI as either a core or a secondary component of their strategy.
  • 97% have security concerns when adopting IoT, with network-level security being most important (43%), followed by device track & management and endpoint security (both 38%).
  • Businesses adopting IoT believe they’ll see a 30% ROI on their IoT projects.

These and many other insights are from Microsoft’s IoT Signals Report, Edition 2, published on October 2nd. IoT Signals is published annually to provide Microsoft partners, customers and business leaders the insights and market intelligence they need to develop and launch IoT strategies.

This year, Microsoft commissioned the Hypothesis Group, an insights, design  and strategy agency to execute the IoT Signals Edition 2 research. More than 3,000 IoT decision-makers in enterprise organizations across the US, UK, Germany, France, China and Japan currently involved in IoT were interviewed. Please see page 4 for additional details on the methodology.

The top 10 key insights from Microsoft’s IoT Signals Report, Edition 2 include the following:

  • Enterprises’ IoT adoption surged in the last year from 85% to 91%. The survey found that 83% of adopters have at least one project that has achieved the use stage, which is 9% better than last year. Hypothesis Group and Microsoft found that IoT projects fall into four stages: learn, trial/POC, purchase and use. The study points out that more projects are in the purchase and use stages this year, with

Morgan Stanley Analysts Reiterate $245 Price Target, See Promising Future in Microsoft’s Gaming Business

On Thursday, Morgan Stanley analysts reiterated their Overweight rating on Microsoft (MSFT) with a $245 price target. The analysts see great upside for Microsoft ahead of new Xbox console launches and following the $7.5B acquisition of game developer and publisher Bethesda Softworks.

The long-awaited release of the Xbox Series X/S console is approaching quickly. As expected, Microsoft should experience an uptick in hardware sales driven by the increase of “work/stay/play at home” activities from consumers. “The increase in gaming hardware revenue in FY21 vs.FY20 of $779 million in our model is already pressuring our existing FY21 gross margin estimates by ~35bps”, stated by Morgan Stanley analysts.

The analysts further noted: “Microsoft’s revenue base has grown meaningfully since (MSe $156 billion revenue in FY21 vs $110 billion in FY18), thus making the margin dilutive effect less meaningful now, in our view. Despite this modest gross margin headwind, we look for FY21 gross margins to expand YoY to 69%, ahead of consensus at 68.3%.”

Gross margin fears shouldn’t be as bad as feared with the analysts commenting that “broader gross margin expansion in FY21 remains underappreciated”. FY21 Gross Margins will benefit from accounting changes and continued Azure improvements.

The accounting changes include a ~$2.7 billion benefit to COGS from lower depreciation expenses in FY21. This will tackle Commercial Cloud gross margin, a big concern that investors had come into the fiscal year. This will benefit Azure margins in the coming years, estimated to go from 56.2% in 2020 to 65.0% in 2021. Beyond FY21, analysts expect to see a more measurable pace of expansion supported by growth in Dynamics and Gaming Softwares/Services.

In addition, the argument can be made that the $7.5B Bethesda Softworks acquisition is a justifiable price tag. With the growing Xbox Live community and Game Pass ecosystem, Microsoft’s strategy

Microsoft’s 150,000 employees can work from home permanently: report

Even when stay-at-home measures for the coronavirus pandemic are lifted, Microsoft employees won’t be required to come back to the office.

According to an internal Microsoft memo obtained by The Verge, Microsoft employees will be allowed to work from home for less than half of their work week. Pending manager approval, some employees will be allowed to work from home full time.

Given the nature of Microsoft’s business as a software and hardware creator, some employees with roles that require a physical presence won’t be able to take advantage of the new “hybrid workplace” policy, according to the report. Employees involved in hardware research and development, for instance, or employees involved with in-person training, won’t be able to do that work remotely.

For others, whose work can be done entirely remote, there are options to relocate — even internationally — if approved. The Verge reported that “most” of Microsoft’s 150,000 employees would be able to take advantage of one of these remote-work offerings.

At least one major Microsoft product was delayed out of 2020 due to remote work slowing down production: next-gen Xbox launch game “Halo Infinite.” The game is now expected to launch in 2021, months after the November 10 arrival of the Xbox Series S and Series X. 

“The decision to shift our release is the result of multiple factors that have contributed to development challenges, including the ongoing COVID-related impacts affecting us all this year,” studio head Chris Lee wrote in mid-August. “It is not sustainable for the well-being of our team or the overall success of the game to ship it this holiday.”

As the coronavirus pandemic sent millions of Americans indoors in March, and working remotely became the norm for many companies, some tech giants have decided to make working remotely a permanent part of

Microsoft’s new ‘hybrid workplace’ policy will make working from home a permanent part of the mix

Microsoft’s headquarters in Redmond, Wash. (GeekWire Photo / Monica Nickelsburg)

Microsoft has released new “hybrid workplace” guidance that lays out how employees can have a more flexible remote work schedule and even relocate elsewhere in the country as the tech giant continues to adjust to changing needs during the ongoing pandemic.

The Verge first reported on the internal messaging Friday, saying that Redmond, Wash.-based Microsoft will allow employees to work from home freely for less than 50 percent of their working week, and managers will be able to approve permanent remote work.

RELATED: Death of the HQ? Pandemic hits commercial real estate, but long-term trends still open to debate

Kathleen Hogan, Microsoft’s chief people officer, said in a note to employees that the COVID-19 pandemic has challenged everyone to “think, live, and work in new ways.”

“We will offer as much flexibility as possible to support individual work styles, while balancing business needs, and ensuring we live our culture,” Hogan wrote, as reported by The Verge.

A Microsoft spokesperson also confirmed the guidelines to GeekWire, saying in a statement that the “goal is to evolve the way we work over time with intention.”

Other highlights in The Verge report include:

  • Employees who opt to WFH permanently will give up their assigned office space, but can still use “touchdown space” at Microsoft offices.
  • Employees can move across country for remote work, but compensation and benefits will change and vary depending on the company’s own geopay scale. Those who move will need to cover their own relocation expenses.
  • Microsoft will cover home office expenses for permanent remote workers.
  • Flexible working hours will be available without manager approval.

The company stressed that some roles still require access to Microsoft offices, hardware, data centers and in-person training.

Microsoft was one of the first companies

What Happened To Microsoft’s Surface Neo?

Where is Microsoft’s Surface Neo? Those tracking the development of Microsoft’s other dual-screened folding device have seen the Android-powered dual screened Surface Duo reach the market, but the larger Windows 10X powered hardware has quietly slipped out of sight.

The Surface Neo was introduced alongside the Surface Duo twelve months ago. The two devices provided a joint vision of foldable computing, with the Duo acting as the pocketable device, and the Neo acting as the laptop/tablet sequence device. Both were given a launch date of ‘the holidays 2020.’

The Surface Duo comfortably made that deadline, with pre-orders commencing in August 2020 ahead of the retail availability in early September. The Surface Neo? Reports started to circulate in April that Microsoft was not expecting any Windows 10X powered devices to launch during 2020. Mary Jo Foley for ZDnet wrote at the time:

“My contacts say that Chief Product Officer Panos Panay informed some of his team internally today, April 8, that Microsoft wouldn’t be delivering its own Surface Neo dual-screen 10X devices this calendar year. In addition, Microsoft also won’t be enabling third-party dual-screen Windows devices to ship with 10X in calendar 2020, I hear.”

Windows 10X is now expected in Q2 2021. Mayank Parmar lays out a presumptive schedule for Windows 10X and the resulting hardware as part of the regular Windows 10 release:

“In Q2 of 2021, Microsoft will deliver the first preview of Windows 10X, the company’s