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Why Microsoft is going all-in on AI

Paul Rubens | Nov. 10, 2016
Microsoft has positioned artificial intelligence as being as important as Windows, Office and Cloud. Here's why.

Anecdotally, Sanfilippo suggests that many people find Cortana gets in the way of work and does not actually do what they want. "Eighty percent of the time it just searches the web for what I want. It bugs me that Microsoft talks about it as a success when most people probably just get annoyed by it," he says.

The danger for Microsoft is that a rival assistant such as Amazon's Alexa or Google's Assistant becomes the de-facto standard way for end users to access AI services and enterprise AI systems. If that happens, Cortana could become the digital assistant equivalent of Windows Phone: a largely irrelevant entity that few people use and even fewer developers bother integrating with.

Sanfilippo points out that many investments in AI have been written off in the past, so there's a very real risk that Microsoft could abandon Cortana in two or three years' time.

Strong in the cloud

The good news for Microsoft is that even if Cortana is relatively weak, it has a very real competitive advantage in the cloud, where it can harness the computing power of Azure to do intensive computational AI work (such as translating all 1,440 pages of War and Peace from Russian to English in 2.5 seconds.) It can also offer this power to third parties.

And with its $26 billion purchase of LinkedIn, Microsoft also has access to a social graph of over 425 million business users. This puts it in a strong position when it comes to offering services based on the combination of AI and social networks — for example by providing customers with a personal newsfeed based on the projects they are working on, or enabling Office to suggest experts to connect with via LinkedIn.

Fear of missing out

David Schubmehl, a research director at IDC, takes a more sanguine view of Microsoft's AI efforts, and says that AI – agents and all – will be central to everything that Microsoft does in a relatively short space of time. "I think as time goes on all enterprise software will have AI functionality, and we are already seeing the green shoots of that," he says.

But, like Sanfilippo, he thinks that some of what Microsoft is saying is motivated by the desire to ensure that it doesn't get left behind. "Four years ago IBM was the only one doing cognitive and AI. Then Google talked about embedding AI into everything. Then Salesforce made its Einstein announcements and Oracle talked about Adaptive Intelligence. That's why Microsoft has established this new division — but I do think it sees AI as where the computing world is moving to."


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