Dive Brief:

• An internet of things-inspired software used for performance tracking and an artificial intelligence-infused software for predictions are newest additions to the business software arena, Microsoft CEO Satya Nadella said at an editors meeting with journalists on Monday, reports Business Insider.
• Tracking, from suppliers to sales, is part of regular business practice and the next frontier is "smart" products with sensors. The new software types will be used to track the "digital trail" taken by business customers. For example, when a tool has symptoms of failure, the smart product can order a replacement from the supplier before it actually breaks, according to the report.
• The two software types fall under Nadella's "systems of record," which he uses to describe enterprise resource planning software (ERP) and "system of engagement" for customer relationship management (CRM), according to the report. The "system of observation," or the IoT software, and the "system of intelligence," or AI-based software, both fall under Nadella's latest unique software classifications.

Insight:

Microsoft has become one of the most convenient companies to work with.

With the addition of Microsoft 365 to its robust software offering package, the company can declare itself a one-stop-shop for business customers.

Microsoft's reorganization last year highlighted the company's focus on cloud, AI and business intelligence, shying from the days of the Windows OS.

Now Nadella is setting up a way for businesses to know who bought a product, how it's being used and predict what comes next. The triangulation of the opportunities is an introduction to an intelligent system, according to Nadella.

The success of Microsoft's push for an intelligent business product portfolio is evident. Microsoft's business intelligence software for the cloud, Power BI, already has seen a $500 million annualized revenue rate in 2018 and has "made Microsoft the leader in business analytics in the cloud," according to Nadella's 2018 letter to shareholders.

The company has its eyes set on moving forward in highly regulated markets for companies with limited cloud adoption. It also has made initiatives to refresh some of its sales technology solutions, which included the addition of more than 3,000 developers for writing code and working with business customers.