Anthony W. Ulwick

The innovation and the impact

One of Microsoft’s most profound discoveries was that the company had already developed many solutions for internal use that would help customers achieve their desired outcomes and get jobs done, given this broader lifecycle perspective.

However, those solutions had never been packaged together in a cohesive and compelling offering. Wascha notes, “The most amazing thing is that we really did not write that many new lines of code to meet customer needs. Rather, it was

about looking at the job in its flowchart, looking at software assets that we already had, and then piecing them together as solutions to each part of the job.

For example, Microsoft discovered that customers were having trouble keeping track of the number of PC software licenses they owned—a necessary step in compliance.

Microsoft already had a licensing server that could address this need, but the company had never considered including it as a part of the Software Assurance offering. Similarly, IT professionals were having difficulty anticipating potential software conflicts when they deployed a new operating system. Again, Microsoft already had a tool that could address this need, one that the company had been using internally. Microsoft decided to include a version of that tool in its Software Assurance offering.

Customers also wanted to reduce the time and cost involved in training employees to use the upgraded software. To address this, Microsoft implemented a training voucher program that gave employees access to certified Microsoft trainers. Once again, this was a program that Microsoft had already developed but had never been made a formal component of the Software Assurance offering.

Microsoft also uncovered an unmet need related to prevention of internal security violations. As in the other examples, Microsoft already had a successful product that it was able to make part of the Software Assurance package.

The product included rule templates that enabled companies to quickly set software and PC access restrictions for different groups of employees—a key element of internal security.
And the list of enhancements to the Software Assurance offering could go on.

The benefits to Microsoft from adopting the ODI approach were dramatic and immediate. In the year Microsoft announced the changes to the Software Assurance offering, they beat their revenue goal by over 10 percent. This was even before the fully revised product was available.

Customer satisfaction increased, and complaints about Software Assurance dropped.

In subsequent years, Microsoft was able to substantially grow the Software Assurance business and dramatically increase annual renewal rates. Microsoft discovered it was sitting on a growth business once value was measured from the customer’s perspective. Wascha noted, “Salespeople loved the new product offering. They felt they had something of value to offer.”