Understanding Microsoft Ecosystem Changes and Their Impacts

Microsoft is officially sunsetting their DSP, Microsoft Invest, by February 28, 2026. Rather than replace it, Microsoft is focusing their buy-side attention entirely on the Microsoft Advertising Platform, prioritizing "privacy, personalization, and AI-native experiences". There’s a lot to unpack, but the core themes from Microsoft seem to be: 💡 Conversational and agentic advertising is the future Microsoft sees a world where ads live within natural conversations (like Copilot), rather than interrupting them. This could change how we think about intent signals and creative strategy (i.e. the ads we produce and campaigns we run). 💡 Leaving behind the traditional DSP model Citing privacy concerns and strategic misalignment, Microsoft is stepping away from the open programmatic model. That’s a big move—and not one many platforms would take. I think it will mean more transparent pricing and enable more net new advertiser onboarding. 💡 Reinforcing integrated media mix with friendly UI Between LinkedIn, Outlook, Bing, Xbox, and now Copilot, Microsoft is building a deeply integrated audience network—backed by clean room tech and first-party data. The most important through line is Microsoft is leaning into the UI that has done the best with its customers - so we should expect to see more focused growth there. 💡 AI in everything From reporting to creative, expect Copilot to be front and center. Whether marketers love or get annoyed by the AI applications is going to come down to rollout and how tools are explained. 💡 Publisher tools aren’t going anywhere Microsoft Monetize and Curate continue to grow, giving publishers control over yield, data packaging, and marketplace creation. This move isn’t a pullback from media—just a realignment. Will these changes increase your investment in the Microsoft ad ecosystem—or push you toward third-party DSPs still supporting open programmatic? Will you be more open to testing Microsoft's full inventory knowing it grants access to different ad experiences?

While agents, Copilots, and AI dominated the #MSBuild keynote, a quiet revolution is underway: a massively improved Microsoft #Fabric is about to steal the show! If you blinked during the Build keynote, you might have missed the pivotal data announcements amidst all the agents and Copilots. But fear not, I've compiled my key takeaways on these incredibly innovative updates in this post. Many of these build on the groundwork laid at #MSIgnite last year, now fleshed out and substantially improved. Let's dive in! 1️⃣ Streaming ingestion becomes a first-class citizen. The era of stale batch reports is fading, replaced by interactive queries on real-time data. The backend for streaming is a collection of various tools that ingest an astonishing 350PB of data every day! 2️⃣ While most vendors talk about serverless, many of its #Azure PaaS offerings are actively being 'SaaSified,' signaling a strategic shift towards fully managed, consumption-based services. 3️⃣ While #DeltaLake remains the primary table format, Fabric now supports writing data in #Apache #Iceberg format as well. What's clever is that no matter which format you choose, Fabric automatically creates a virtual metadata stub in the other format. This stub contains no actual data until it's queried, significantly reducing overhead. 4️⃣ Microsoft Fabric is driving a rapid convergence of OLTP and OLAP, making real-time analytics more accessible than ever. The integration of #CosmosDB directly into Fabric is a key enabler, and with its vector embedding capability, organizations can now handle unstructured data. 5️⃣ Microsoft's catalog strategy is evolving. #MSPurview is expanding its reach across the broader Microsoft ecosystem, while OneLake Catalog is emerging as the unified catalog for the lakehouse. Both are developing connectors to integrate with Databricks Unity Catalog and Iceberg REST catalogs. 6️⃣ A true standout is Fabric's AI Transformations capability. Imagine this: you load an MP3 into Fabric's blob storage. You then instruct AI Transformation to automatically generate a CSV transcript. Following that, you can ask it a series of questions, like summarizing the content or analyzing its sentiment, with the output delivered in JSON. Finally, this can be transformed into Delta Lake format for use in your queries. The most impressive aspect? Any new MP3 loaded will automatically trigger the creation of its corresponding CSV, JSON, and Delta versions, ensuring real-time insights. This was another intense conference week, with analysts tackling MS Build, #Google I/O, Dell Technologies Tech World, and Glean Go. My sincere thanks to the phenomenal Analyst Relations team for a truly action-packed three days in Seattle – 'Sleepless in Seattle' indeed! Patrick O. Laura Dodd Mardi Brekke-Hutchings Tonya Swyers Tom Harlin And how cool is it that some of my absolute favorite people, including Roy Hasson and Tino Tereshko 🇺🇦, are now part of the Fabric team?

At Microsoft Ignite, AI and Co-pilots stole the spotlight, but Microsoft's surge in partner investments and 📈 marketplace growth is just as transformative. Let’s break them down. Recent data highlights why Microsoft is a magnet for partners, showcasing the economic power of its ecosystem: ✔️ Services Partners: Earn $8.45 for every $1 of Microsoft revenue ✔️ Software Partners: Earn $10.93 for every $1 of Microsoft revenue These numbers underscore Microsoft's role as a revenue multiplier. The momentum is amplified by AI: 81% of partners report Microsoft AI is already “enabling their revenue #growth”. Nicole Dezen, Microsoft's Chief Partner Officer, frames it succinctly: “Partners are the trusted advisors for customers to harness all of this AI innovation.” This dual benefit—economic multipliers and #AI accelerant— turn Microsoft’s partners into a catalysts for AI transformation. 🤝 Marketplace: Microsoft’s Co-Sell Engine Microsoft’s marketplace has become a linchpin of its co-sell strategy. Nicole Dezen explained: “One of the very best ways for you to Co-sell with Microsoft is through our marketplace. This is 24 by 7 digital commerce… We provide you access to millions of Microsoft customers.” AI is fueling the marketplace's growth at breakneck speed: ✔️ 387% increase in customers purchasing AI offers in the marketplace  ✔️ 163% increase in AI offers listed AI is now "the most purchased category by net new customers,"  according to Nicole Dezen. The massive surge in AI-related transactions suggests Microsoft's marketplace is gradually evolving from a procurement tool into a strategic platform for AI solution discovery and deployment. 💰 Microsoft’s Record-Breaking Partner Investment Judson Althoff, EVP and Chief Commercial Officer, delivered a bold statement: “We’re investing more in our partner #ecosystem than we have ever invested… it is growing at a faster pace than any other single investment that we make in the entire company right now.” This is no small claim, especially from a company pouring billions into AI Here three areas where this investment is realigning Microsoft partner ecosystem. 1️⃣ Channel Evolution: $1.5B+ Shift to Corporate and SMB Althoff emphasized the importance of strengthening channel execution: “We still need a tremendous amount of help in terms of channel execution in our corporate accounts and SMB businesses.” Over the past two years, Microsoft has reallocated over $1.5 billion in channel incentives toward the SMC (Small, Medium, and Corporate) segment. This strategic pivot signals a belief in the untapped potential of smaller organizations—particularly as AI adoption extends beyond large enterprises. 2️⃣ Systems Integrators: Billions in Customer Investment Funds Microsoft is doubling down on partnerships with systems integrators (SIs), recognizing their critical role in turning products into solutions: 💡 Read the full breakdown in my newsletter: https://lnkd.in/eA5teCZ4 Partner Insight