Microsoft: Focusing on the Healthcare Vertical
(5 pages of text)
Case (Pub Mat)
By January 2020, Microsoft Corporation’s (Microsoft’s) Microsoft for Health healthcare vertical had become the company’s most important vertical. Microsoft’s chief executive officer, Satya Nadella, wanted the company to be viewed as a strategic partner of the healthcare industry and its clients. However, several challenges remained regarding the success of this vertical: both doctors and patients were unwilling to rely on artificial intelligence (AI) for diagnostics and prescriptions, while machine learning was even less accepted. Additionally, not many companies were willing to transfer more than 10 per cent of their data to the Microsoft Azure cloud platform, which raised concerns about whether or not the decision to focus on vertical versus horizontal clients represented an appropriate strategic decision. As enterprises were not shifting the majority of their data to the cloud, should Nadella reconsider his decision to focus on verticals? How could he overcome the challenges associated with the use of cloud computing and AI in healthcare? If Nadella wanted to address his clients as partners, what approach should he follow to develop such collaborative relationships?
This case is intended for use in undergraduate- and graduate-level courses on strategic management or healthcare management. The case elaborates on the strategic framework that a firm needs to adopt if it intends to become a strategic partner of its clients. The case also discusses the horizontal versus vertical client approach and how best to define the vertical approach using the Standard Industrial Classification (SIC) code or an industry ecosystem approach. The case further discusses how companies should deal with users’ resistance to new technologies. After working through the case and assignment questions, students will be able to
- evaluate the benefits of a vertical versus a horizontal cloud computing approach;
- evaluate methods for overcoming the challenges associated with a healthcare vertical;
- critically analyze large corporations’ investment strategies regarding start-ups; and
- explore possible ways of becoming a strategic partner of clients rather than remaining a service provider.
Information, Media & Telecommunications
United States, Large, 2020
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