It’s what the people want.
Great point. I think that part of what you note about people wanting it to just work is that the questions we want to answer or ask are never 100% clear (and in some cases we are ver wide of the mark). Fuzzy logic.
Awesome... The idealist doesn't understand the power of capillarity and sales through channels.
I would say Microsoft hasn't even put the craftsmanship aside. Their is a real product culture there and they take pride in design and customer orientation. I must say it is challenging to accomplish the larger and more complex your organization becomes.
Great analysis btw.
The comment section is largely supportive of your original point. And I agree, there is a lot to like. Let me see if I can disagree though.
The examples you cite—Slack, Dropbox, etc.—are largely differentiated by *ergonomics*. This is the thing that most people in tech talk about when they talk about craftsmanship, UX, design...the "feel" of using a product. Typically this is created when form follows function in a way that required intentionality.
However, the modern data stack is—today—mostly about infrastructure. This means that the axis of competition is different. You sell to a technical buyer and that buyer often buys based on largely economic logic. What are the capabilities of this thing relative to other things like it? The cloud data platform is the most clear example of this, and at least the last time I checked, Snowflake was simply more capable (performance / cost / feature set) than Synapse. While enterprise IT buyers may not be good at valuing user experience, they are really damn good at looking at performance benchmarks and comparing feature checklists.
Now, that's not to say that that state will persist. Microsoft and Amazon and Google can invest monstrous amounts of R&D into these products and do so at a loss; eventually it is entirely possible that MSFT will catch up. EXCEPT that "multi-cloud" is actually a thing that buyers care about. This is bigger than "lock-in"--it's flexibility, availability, and risk management. This is why vendors like Confluent, Mongo, Elastic are successful even despite having hosted versions of their own open source projects sold by the hyperscalers. Yes, they're all smaller than MSFT, but they're also decades earlier in their journeys.
Anyway...I could care less about MDS values as "aesthetic principles"...I care about them because I think they actually create products with better *capabilities*. To take just one, modularity in appdev isn't done because it's beautiful (although it is), it's done because it results in a codebase with better economic characteristics. Lower cost to ship a new feature, lower cost to maintain. The same has to be true for the MDS.
Also: to be clear, there are hundreds of companies using dbt + Synapse together! :D
When it comes to data tooling, microsoft and google have exactly the same strategy - keep the customer in their closed ecosystem. But they target very different customers. Microsoft targets enterprises already hooked onto its products and google has been more successful with startups. As a developer I personally feel google has an edge as its data stack makes developers way more productive than microsoft. Enterprises probably don't even notice how much more head count they need if they are on microsoft, they probably don't even care.
No matter whether you are on google or microsoft, you are bound to integrate numerous different tools that live outside of google or microsoft's ecosystems ! So, where does the consolidation ends (or begins) ? The ground reality is if your top paying customers want to use something outside your ecosystem, (in a competitive market) you are obliged to make that integration available.
It is true that microsoft is winning with the consolidation, but it does come with technical debt for its customers. However, its customers may still be winning. Only time will tell if this technical debt will play a role in differentiating between losers and winners !
Excellent entry, you're one of only a few people willing and able to build bridges between these worlds. Incidentally I used and liked Yammer way back when, it was Slack before Slack and I was really puzzled how badly Microsoft screwed up that one (only to crush it with Teams later on!).
The whole VC-startup MDS ecosystem going out of their way to ignore Microsoft in their charts and pitches is downright hilarious, like gnats pretending the elephant is not in the room. Power BI makes more money in Guatemala than many of these startups do in the world. If your architecture is so revolutionary then SHOW ME THE MONEY, like Steve Ballmer used to yell by gleefully quoting Jerry Maguire.
I say this as a guy who worked at Microsoft in the 90s, thought they were turning into IBM-like irrelevance in the 2000s, only to make most of my consulting income in the past 5 years on top of the Microsoft stack! But I also do agnostic data architecture work and it's important to keep an eye on the valuable tech emerging outside of the borg. Whenever Microsoft feels they've killed the competition they become complacent and turn the lights off product development (destaffing Internet Explorer, LOL!).
I really enjoyed the article, and I'm looking forward to check the other ones that are linked from it. However, there's something about thr reasoning that irks me, although I can't pinpoint exactly what. Isn't it the case that "corporate buyers" are the large majority of clients, and also that most folks just use what Microsoft offers because they happen to use a laptop with Windows on it? (I know that in Silicon Valley everyone uses Mac, but the world is very big and Macs are very expensive).
I can see where you come from when you say that users don't care about a thing being open source or not (I've been advocating this point strongly to encourage open source communities to put more focus on UX, aesthetics, marketing). But not separating corporate buyers, who buy software _for others to use_, from people that buy software for themselves, is an oversight that makes the point of the article more fuzzy I think. Even though corporate buyers are 90 % of the market, or 99 % (I have no idea).
"The race is not always to the swift, nor the battle to the strong; but that is the way to bet" -Keough. Microsoft is relentless, as was IBM before them. It is human to fall in love with our tools. Much like Chef's who have favorite knives, IT people often favor specific software tools/web apps and the companies that make them. This can sometimes cause religious wars, my holy tool versus your blasphemous one. The danger is forgetting that most companies are not in the business of IT at all. Most companies are in the business of profitably selling products and services. IT exists for this reason, not the other way around. And while Microsoft's tools are a mixed bag, they are very good at the business of IT. But then, I use emacs, so what do I know.
This is a good reminder that the best products don't always win and that most people don't really enjoy using software. I wrote about this recently too: https://arpitc.substack.com/p/data-people-non-data-people
Excellent point of view and congrats on the newsletter!
Yammer may have died, but Github has thrived under the thumb of Microsoft. The data community most certainly does use Github, and it’s ecosystem - along with vscode. Those products don’t make their way into any of the logo collages, but they are as integral as any other component.
(Or DBT cloud would have infinitely more paid editors. one or the other. shout out whoever authored the vscode-dbt-power-user)
I really liked this article. I always thought Snowflake would lose out once AWS decided to put some effort into their data tools but I think AWS is happy to just take a cut from Snowflake’s cash instead of compete with them. I’ve never worked in Azure, just AWS and GCP, I guess I need to get some experience with Microsoft before it’s forced on me!
Wow! So timely -- I was just reading Ben Thompson's Stratechery interview with Parker Conrad about Rippling.
Here's a key excerpt:
"BT: I guess the question here is, this is a very interesting vision, and one of the reasons why I’m so intrigued by Rippling is I’ve been writing literally since the beginning of Stratechery and it’s hard to believe, but it’s been nine years now, about the need for tying together all these SaaS products, and I’m just searching who’s going to be the center of gravity in an organization? My contention is that the reason why Microsoft ends up winning again and again, is you have these SaaS startups that are in their silos, they’re going to make the best possible user experience, and then Microsoft comes along and their alternative isn’t as good and the start up says, “Oh, I feel good. No problem. Ours works way better.” But they’re looking just at their functionality, they’re not thinking about the company as a whole. And Microsoft’s like, “Look, it doesn’t work as good, but it works with everything else that you have because you’re already using a bunch of Microsoft stuff.” So the question for Rippling is, there’s this vision, there’s a mountain, how do you actually get to the mountain without going through the valley of, “I have to actually convince people to use my product”?
PC: We have two things that we do. One are the integrations that I described, but the other is that we build a lot of our own products. One of the things that we do that I think is somewhat different than other startups, is that there is some conventional wisdom in Silicon Valley that I think is wrong, that companies should be extremely focused and do one extremely narrow thing, but go very deep. It might have been advice that worked ten years ago when you could build a billion dollar SaaS company by just peeling off one small feature from one of these monolithic business systems, these on-prem business systems, and turning it into a standalone SaaS service. Now that that opportunity has been picked over and there are a million different point solution SaaS companies.
I think that now in order to really make a dent in a lot of these markets, you need to build something more like what you’re describing, which is a coordinated set of interrelated services that interoperates seamlessly, and that’s a lot of our philosophy of building products."
I just recently learned about Rippling, i love their thesis -- this one struck a chord for me https://luttig.substack.com/p/rippling?s=r
integration is a strategic differentiator.
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heh, I guess every acquired company thinks they’re a horny toad.