Leveraging Acquisitions And Innovations To Accelerate Microsoft's Cloud & AI Business

Microsoft has proven to be a model of resilience and transformation. The company, once synonymous with the Windows operating system and Office Suite, has metamorphosed into one of the leaders in cloud computing. But the change didn't happen overnight, nor did it occur by accident. Microsoft has wisely levergaed both in-house innovation and select acquisitions to accelerate in specific areas. Prerak Garg, Senior Director of Cloud & AI Strategy at Microsoft, has played a key role in it.

What it Means to Shape Microsoft's Cloud & AI Business

Before joining Microsoft, Garg earned a reputation for strategic expertise at McKinsey & Company, where he shaped digital transformation strategies for several Fortune 500 companies. 

Earning the prestigious Young India Fellowship at just 22, his leadership acumen was recognized early. Upon joining Microsoft in 2020, Garg quickly climbed from Senior Manager to Senior Director. But what distinguishes him is not the speed of his ascent; it's the transformative impact he has had on the company's Cloud & AI business and the industry overall.

In a space where 80% of mergers fail, Garg employs a unique, strategy-first approach to acquisitions. “Many companies pursue deals driven by growth or cost synergies, overlooking the strategic fit and customer needs,” he says. Garg starts with strategic fit, followed by an exhaustive due diligence process that includes technical and business-related factors. This dual focus is rare in an industry where most specialize in either the technical or business aspects.

Transforming Industries, One Acquisition at a Time

Garg has been at the forefront of defining the strategy for key acquisitions Microsoft did in Cloud & AI space. Notably, he defined the healthcare strategy at Microsoft that resulted in the $19 billion Nuance acquisition, and he also led the strategy for the $500 million RiskIQ acquisition.

Through its specialized solutions and extensive reach, Nuance has enabled Microsoft to enter the healthcare sector. Currently, Nuance's solutions are utilized by more than 55% of physicians and 75% of radiologists in the U.S. and are used in 77% of U.S. hospitals.

Leveraging Nuance’s expertise and its relationships with Electronic Health Records (EHR) system providers, Microsoft is now better positioned to empower healthcare providers through ambient clinical intelligence and other Microsoft cloud services. The acquisition has doubled Microsoft's total addressable market (TAM) in the healthcare provider sector, bringing the company's TAM in healthcare to nearly $500 billion. 

“Healthcare is undergoing a dramatic digital transformation, significantly accelerated by COVID-19. Nuance helped us accelerate industry cloud strategy for healthcare. It provided us with the expertise needed to build and expand our industry position,” says Garg.

The acquisition of Nuance is more than just a business move for Microsoft; it's a strategic leap that can help redefine healthcare delivery, enhance patient experiences, and improve outcomes through faster innovation.

Another crucial area Garg has influenced significantly is cybersecurity. Cybersecurity is the nation's top priority as cybersecurity breaches increasingly affect everyday lives. Organizations are increasingly using the cloud to reimagine every facet of their business. Hybrid work has accelerated this digital transformation, and cyberattacks' increasing sophistication and frequency challenge customers. 

To address this need, Garg led the strategy for Microsoft to acquire RiskIQ, a leader in global threat intelligence and attack surface management, to help companies build a more comprehensive view of the global threats to their businesses, better understand vulnerable internet-facing assets, and build world-class threat intelligence.

“The growing trend toward multi-cloud adoption has led businesses to use various security tools, leading to increased management complexity and potential security vulnerabilities,” says Garg. “RiskIQ has enabled us to bridge this security gap effectively. Along with other Microsoft security tools, it offers our customers a comprehensive view of their entire digital ecosystem, including shadow IT and alternate cloud platforms.”

Driving the Cloud Forward

While acquisitions might help accelerate in certain areas, Microsoft’s primary focus has always been on internal innovation to keep its cloud services at the forefront of technology. Microsoft has 300+ products and services as part of its cloud portfolio. Recently, Microsoft has launched a series of generative AI-enabled copilots that have taken the tech world by storm.

"Innovation is in Microsoft's DNA," emphasizes Garg. Collaborating closely with internal product teams, he plays a crucial role in influencing the company's strategic direction. He was the driving force behind the conceptualization and development of Nuance DAX Express—an AI-powered SaaS solution for clinical documentation. This innovative tool is designed to save physicians two valuable hours each day.

Physician burnout is a significant concern in the U.S. healthcare system and has been the subject of extensive research and discussion. Studies have shown that a substantial proportion of physicians, often more than 50%, report symptoms of burnout. A major contributing factor is medical documentation, which takes up much of a physician's time. While various solutions existed for generating medical notes, they required human scribes, took several hours, and were highly expensive. To address this, Garg conceptualized a SaaS solution using large language models such as GPT-4 that instantly converts patient-physician conversations into medical notes. “A fully AI-based product makes it more affordable and scalable,” he notes.

From Growth to Future

Microsoft's strategy for its cloud business is a masterclass in balanced and synergistic planning. In an industry where trends evolve rapidly, Prerak Garg is committed to ensuring that Microsoft stays ahead of the curve and aims to be a trendsetter. “Standing still is the fastest way to move backward,” he concludes. “You don't just need to adapt to change; you also need to drive it. Strategy is where we begin.”

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