Microsoft: How we deliver industry-specific cloud computing at scale

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Microsoft is building clouds for nine priority industries by connecting and customising public cloud services for specific workloads and partner integrations.

Image: Microsoft

Having spent several years creating its partitioned and specialised government cloud, Microsoft has used that experience to build other customised clouds for specific industry sectors, starting with healthcare and retail. Those are getting more features, and Microsoft is also announcing three more new industry clouds: Microsoft Cloud for Financial Services, Microsoft Cloud for Manufacturing, and Microsoft Cloud for Nonprofit.  

In fact, there are nine industries that Microsoft sees as a priority, Erik Arnold, CTO of the Tech for Social Impact group at Microsoft, told TechRepublic, which suggests there will be more vertical clouds to come. 

Common but custom

With these three new industry clouds, it’s becoming clearer what makes an industry cloud different from just using Microsoft’s various cloud services. There are problems all industries face, especially unifying disparate data sources, but there are also very different requirements. 

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The different workloads in Microsoft Cloud for Nonprofit.

Image: Microsoft

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Microsoft’s Erik Arnold on nonprofits: “They all operate as businesses and have to steward donor funds, and they all have to measure impact and increase the efficacy of that programme work.” 

Image: Microsoft

Nonprofit is an excellent example because it’s a broad sector where organisations often have minimal resources and small budgets, but also need features that are subtly different from almost any other kind of business and require a lot of customisation. A specialised cloud is the ideal way to handle that. 

“If you think about nonprofit as an industry, which not many people do, it’s very wide; it’s basically a tax code,” Arnold points out. “They all do very different things from a mission perspective, yet all nonprofits fundraise. They all deliver services to beneficiaries, whether that beneficiary is a person, a puppy or a beach. They all operate as businesses and have to steward donor funds, and they all have to measure impact and increase the efficacy of that programme work.” 

From his experience working in the nonprofit sector, Arnold highlights a frustrating paradox. “Nothing any of these organisations implement with digital technology is new, but it’s not in any of the commercial solutions that are out there.” Most business software lacks the workflows a nonprofit needs, he adds. “Even something as simple as a basic CRM system that deals with sales and customers — sales and customers don’t exist in nonprofits!” Slapping a new label on a sales workflow doesn’t make it handle fundraising instead. 

“Working with constituents, working with donors, working with beneficiaries delivering those services: there’s a lot of uniqueness around nonprofit,” Arnold says. What nonprofits don’t have is the budget to have a partner create and maintain something unique for them. “Sales cycles are typically long, the margins are tight; this is a risky market and traditionally underserved by technology partners.”  

Having a vertical industry cloud reduces the costs for nonprofits, but also for the Microsoft partners who can now afford to work with them. Instead of building a custom solution from scratch, partners use the building blocks in each industry cloud (which combine the breadth of the commercial cloud services with solutions designed for the particular needs of regulated industries), and then customise those. 

“Microsoft can help reinforce best practices by incorporating them into tools. It’s less friction and less cost to implement them and you have the confidence that you’re not creating something crazy within your own organisation,” says Arnold. “You’re leveraging broader best practices and that helps make the data interchangeable, which helps organisations that are working on similar missions come together to amplify the impact.”  

Vertical goes across clouds

Vertical software is far from a new idea, and bringing this kind of specialisation to the cloud is actually a sign of the maturity of SaaS. It’s now powerful enough that services can be customised and interconnected to deliver not just the generic workflows that every business uses, but the very specific requirements of different industries. 

Like healthcare, financial services has its own standards and regulations that more general customers don’t need. Manufacturing has standards and communities like the Open Manufacturing Platform, the OPC Foundation and the Digital Twin Consortium. Instead of factories, nonprofits have fundraising functions. 

The difference with vertical clouds is that organisations aren’t just adopting the same vertical technology as their competitors; they’re building their own, on top of a stack of cloud services — Microsoft 365 and Teams, Azure, Microsoft Power Platform, Dynamics 365, and Microsoft cloud security, as well as LinkedIn.  

An industry cloud has a common data model, cross-cloud connectors and APIs, plus workflows, components, standards and certifications for that industry that are used to create different modules that customers can choose. 

“These experiences are composable,” VP for Tech for Social Impact at Microsoft Justin Spelhaug told TechRepublic. “I can start one place, maybe it’s fundraising, because I don’t have time right now to upgrade my volunteer management system, or maybe I start with volunteer management and I’ll get to fundraising later. You can put the components together and build a composable platform that supports your operation at the speed that’s right for you.” 

“It unifies three different views in a single experience: the business process workflow of fundraising, the human workflow using Microsoft 365, and the data and AI workflow using Azure AI and ML, all into one experience called Fundraising, using all of our technologies,” Spelhaug added. 

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The Fundraising and Engagement view of a donor is very specific to the nonprofit sector.

Image: Microsoft

The common data model for each industry leverages Dataverse, and is built with partners and customers from that industry. For Microsoft Cloud for Nonprofit, the company worked with small and large nonprofits, including Oxfam and the Gates Foundation, Arnold says. “We wanted to contextualise the unique capabilities and scenarios in nonprofits that differentiate it from generic industry, and from that we created essentially a data schema that describes best practices for programme delivery, service delivery, fundraising — all of it.”  

Those schema objects, scenarios and relationships are used to create the various modules: for example, the Fundraising and Engagement module is an add-on on top of Dynamics 365 Sales Enterprise that handles the complex relationships organisations have with the people they deal with. “An individual could be a donor in one context, but they could also be a volunteer in another context — in the context of a natural disaster they might even be a beneficiary,” says Arnold. “We have a way of dealing with a single individual and all the different roles that individual plays with the nonprofit organisation. They may engage with the nonprofit as part of their company, or as an individual or as a household. It’s important they’re not getting six mailings a week in all those different contexts — they’re getting one mailing that’s really personalised to the way they engage with the organisation.” 

Fundraising and Engagement also connects to LinkedIn Sales Navigator, so someone raising funds can understand a donor’s connections and experience. 

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The Volunteer Engagement module for managing groups of volunteers is built on Power Apps. “Nonprofits work with very complicated staffing arrangements: how do you onboard volunteers, how do you make sure they have the skills you need, you have to do the background checks, you have to exit them appropriately,” Arnold explains. 

Nonprofits also have to provide volunteers with tools they can use easily, that have the right information security and comply with regulations where they collect donations and where they operate (there’s a lot of PII that’s especially sensitive in this sector). 

“If you have a volunteer that’s helping fundraise and is doing payment processing or donation management, all the workflow is built into the cloud,” Spelhaug adds. “That helps them keep within the guardrails.” 

Scaling expertise

Dealing with a patchwork of data sources is common across all industries. Nonprofits need to aggregate their data, supplement it with open data sources and get insights from it as much as any other organisation. But a nonprofit that grows over time, perhaps from several smaller organisations who had different systems, like Right To Play, has what you can politely call a challenging data environment. 

“It would take them over a day with multiple analysts compiling data across multiple systems to get a donor propensity report. It would take a day to build that to figure out where to target their donor work,” says Arnold. “Now they can do it with the push of a button, because they’re able to unify what was a spaghetti patchwork of systems against the common data model, common data taxonomy, into one infrastructure that automates so much of what they were doing, doing manually before.” 

“Often these organisations don’t have the capabilities in-house to do that by themselves,” Arnold points out. “How you aggregate some of those public sources of data, how you look across your programmes and break down the silos you have in your own organisation.” 

Microsoft already offers a Data Warehouse Quickstart for nonprofits that includes data from the WHO. “It helps organisations do data validation for different data sources, transform that data loaded into an Azure SQL data warehouse and have some Power BI templates on top of that,” Arnold explains. “Once you aggregate the data you start seeing your peaks and valleys, and asking different questions; you start to get a little bit more sophisticated on how you think about working with your own data.” 

Microsoft Philanthropies was already working with Right To Play, Team Rubicon and a range of nonprofits. Microsoft is “very quietly one of the largest corporate philanthropies on the planet,” Arnold points out, donating over $2 billion in software, services and cash to over 245,000 nonprofits globally. It also has several AI for Good programmes, including AI for Humanitarian Action.  

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Tools built as part of those programs will be showing up in Microsoft Cloud for Nonprofit. 

“One of the challenges nonprofit organisations have is the final-mile delivery of humanitarian aid. It has a lot of similarities with a lot of logistics and supply chain workflows, but also some uniqueness. You’re typically getting gifts in kind, on a pallet; all kinds of things thrown onto that pallet. You have to break it apart, put it on skids, get it to a depot somewhere in the global south and from that depot to a village to deliver the actual aid,” Arnold explains. 

“There’s a lot of sharing of data across different agencies: UN agencies, local nonprofits, international nonprofits. We worked with a group of tech sector partners, and nonprofit organisations through NetHope to create a data model around frontline humanitarian logistics. That data model now is an open-source standard available for any technology organisation to use and we incorporate it into the solutions that we deliver.” 

As part of the same AI for Humanitarian Action, Spelhaug worked with Team Rubicon, a disaster response organisation in the US, during flooding in the midwest.  

“One of the key challenges was how to better understand volunteer credentials. You need people with chainsaw certifications, medical certifications, hazmat certifications, you name it.”  

Instead of the usual army of people looking up volunteer resumes by hand, Microsoft used OCR from Cognitive Services to look at resumes and look those certifications up online; once they’re in the volunteer management system, it’s easier to see who’s qualified and where you can use them.

That’s something Microsoft is planning to add to the volunteer management tools in Cloud for Nonprofit — and it’s easy to imagine it connecting LinkedIn so that volunteers can add their certifications that way, as Microsoft adds more cross-cloud connections to make the industry clouds a more unified experience for organisations. 

Scaling out the work Microsoft has done with nonprofits is one of the big advantages of the industry clouds. But getting the most from cloud really does take expertise, and Microsoft has also worked with individual retailers, banks, manufacturers and healthcare organisations. 

Putting the component pieces into the various industry clouds so that partners can take them and customise solutions for far more customers allows Microsoft to offer bespoke services at cloud scale. 

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