This content is part of the Conference Coverage: Microsoft Ignite 2023 conference coverage

Microsoft Ignite updates pave the way for GenAI innovation

Microsoft's latest products and updates to existing platforms center on using artificial intelligence to improve productivity.

Microsoft delivered a slew of big announcements during its Ignite conference this week that will impact the broad Microsoft ecosystem and the company's partners.

As expected, it was all AI all the time during Ignite, with a push to enable customers to get started quickly and confidently. Here are my takes on the new platforms, products and updates Microsoft rolled out during the event.

Two new AI-optimized chips

The Microsoft Azure Maia AI Accelerator is optimized for AI tasks and generative AI, whereas the Microsoft Azure Cobalt CPU is an Arm-based processor tailored to run general purpose compute workloads on the Microsoft Cloud. These chips will be available starting next year in Microsoft’s data centers and will initially power key generative AI services, including Microsoft Copilot and the Azure OpenAI Service.

While this enables Microsoft to offer a completely integrated stack of both hardware and software, it’s a perfect opportunity to capitalize on the high-performance compute accessibility challenges we’re seeing in the market.

The elephant in the room is their partnerships with NVIDIA, Intel, and AMD (amongst others). To be clear, those existing strategic hardware partnerships are not going away and not being deprioritized, but it’s hard keeping up with the AI demand being driven by customers. These new chips are more about accessibility, control and customer flexibility.

There are two dimensions to flexibility. Of course, offering freedom of choice when it comes to hardware vendors is essential, but with these offerings, Microsoft gains control of the hardware and can offer unique optimization flexibility based on power, performance, sustainability, and cost.

Extending Microsoft Copilot

Microsoft added Copilot to a number of its products:

  • Microsoft Copilot for Microsoft 365 is now generally available.
  • Microsoft Copilot Studio, a low-code tool to help organizations customize Copilot for Microsoft 365 based on their unique business data, workflows, and uses.
  • Microsoft Copilot for Service helps service agents in their existing workflows utilize trusted data to offer relevant and timely guidance.
  • Copilot in Microsoft Dynamics 365 Guides will help frontline workers complete complex tasks and resolve issues faster without disrupting workflow.
  • Microsoft Copilot for Azure is an AI companion purpose built for IT to help with day-to-day IT administration.

Productivity, productivity, productivity. It’s the name of GenAI game right now. Every one of these products focuses on making life easier for all stakeholders. And I believe it’s the biggest GenAI opportunity for Microsoft. Microsoft continues having a stranglehold on enterprise productivity and collaboration. Copilot is a natural extension of that. It’s hard to not get lost in the possibilities as you watch demos knowing so many businesses are still heavily engrained within Microsoft applications. And it’s such an easy sell for Microsoft. It’s transparently priced and frankly, I think it’s underpriced based on the value I believe it will provide organizations.

Microsoft Fabric now available

Microsoft Fabric was introduced earlier in 2023 with a goal of empowering stakeholders to work together with data. Fabric combines Microsoft data services including Microsoft Power BI, Azure Synapse Analytics and Azure Data Factory to create a unified platform powered by AI. It helps simplify data and analytics integration, reduce costs, streamline billing, and enhance governance and security. And with several strategic integrations from enterprise partners such as SAS, Teradata and Informatica, organizations can embrace the platform as open and extensible.

I would argue Fabric is one of Microsoft’s biggest launches in years and it’s all about enabling customers to utilize a data foundation that can set them on a path to consume AI services and scale the use of AI throughout the business.

For me, the name of the game is customer traction. Are customers using it and to what extent? According to Microsoft, 25,000 organizations -- including 67% of the Fortune 500 -- have adopted Microsoft Fabric, with 84% of organizations using three or more workloads. That’s incredible traction for something introduced less than a year ago. Additionally, there are so many avenues of opportunity here for Microsoft, whether on AI service integrations, data connectors, or further expanding the integrated partner ecosystem.

Azure AI Studio

The Azure AI Studio platform is designed to simplify the development of generative AI applications. Developers can leverage OpenAI models such as GPT4 or a wide array of other models and services to confidently move from idea to production faster than ever. The types of applications include everything from creating custom copilots and enhancing search to delivering call center solutions and developing bots and bespoke applications.

Empowering developers to innovate with generative AI continues to be a focus area for all vendors. It’s about simplicity, self-service, and enabling a level of confidence to rapidly build custom applications. I love that developers will be given guardrails to do things like integrate pre-built services and models, or responsible AI tools to help with responsible AI areas like privacy, security and compliance.

Responsible AI takes center stage

There were a number of announcements related to responsible AI, including the expansion of the Customer Copyright Commitment to customers using Azure OpenAI Service, Azure AI Content Safety general availability, and several new AI safety and responsible AI features within Azure OpenAI Services. And while responsible AI continues to make headlines, it’s important to note that we’re just getting started -- 2024 will be the year of responsible AI.

We consistently hear from organizations that they recognize the critical importance of responsible AI, but one of the biggest challenges organizations face in ensuring the fair and ethical use of models is balancing it with competing goals of accuracy, performance and time-to-market. Organizations want to move quickly and will likely cut corners to maintain a competitive edge. With recent federal government announcements in the area of responsible AI, expect more to come from Microsoft on this topic moving forward.

Enterprise Strategy Group continues to conduct research across all pillars of enterprise technologies being fueled by AI. Check out our recently published research on Generative AI.

Principal Analyst Mike Leone leads coverage of data platforms, analytics and AI at TechTarget's Enterprise Strategy Group, a division of TechTarget.

Enterprise Strategy Group is a division of TechTarget. Its analysts have business relationships with technology vendors.

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