By Aaron Tilley
Microsoft Corp. Chief Executive Satya Nadella is betting the
Covid-19 crisis has spawned demand for digital tools that will
outlast the pandemic and says there is a growing appetite for
all-encompassing employee management applications that the company
is going after.
On Thursday, the company unveiled its first set of apps for a
new suite of employee management tools, called Viva. The package is
designed to offer -- in one place -- software for human resource
functions like payroll, management tools to track employee
performance and resources for staff covering benefits, career
development and other aspects of their life at work.
The pandemic has crystallized for many executives that being
able to manage their staff and keep them engaged even during
difficult times is critical, Mr. Nadella said in an interview.
"From a priority perspective, empowering your people with the
very best tools and systems so that they can work in spite of
whatever the constraints," he said. "I don't think anyone's going
to say, this is a nice to have. In fact it's essential."
The tools are also one way Microsoft is trying to extend a
yearlong earnings boom it has enjoyed during the pandemic as
customers spent heavily on cloud-computing tools, laptops and
videogames. Mr. Nadella said he expects spending on technology,
currently at about 5% of gross domestic product, will continue to
accelerate after the pandemic.
"It's going to double in the next 10 years to 10%," he said.
Human resource departments for years have relied on software to
help with tasks like payroll, vacation planning and performance
reviews, which are offered by a range of companies such as Workday
Inc. and SAP SE.
Microsoft and others are now thinking bigger, providing umbrella
systems that those vendors' tools could plug into but that also
offer new features catering to emerging business needs like helping
employees manage their mental health.
It is a market business-software provider ServiceNow Inc. is
going after as well as Salesforce.com Inc., a growing Microsoft
competitor. Salesforce last year launched an employee-management
offering called Work.com, with tools that include shift scheduling,
contact tracing and Covid-19 vaccination tracking. Salesforce has
said Work.com helped propel its business with government agencies
to record levels.
Companies today face the problem of having disparate human
resource management tools that aren't well integrated, said Josh
Bersin, an independent analyst focused on HR.
"So what companies are doing is spending enormous amounts of
money building custom portals or applications to bring it all
together," he said.
For Mr. Nadella, that is an opportunity to snare more customers
for Teams, Microsoft's workplace collaboration tool that he has
made a pillar of the company's growth strategy. Mr. Nadella is
positioning Teams to be an operating system used by clients that is
as central to daily business as Windows once was and a hub for
companies and employees to manage their interaction.
Teams comes with videoconferencing functions like those provided
by Zoom Video Communications Inc. and chat functionality like that
offered by Slack Technologies Inc. Viva will be accessible
primarily through Teams, though some features can also be accessed
on other Microsoft tools. The company is also integrating elements
of its LinkedIn business-focused social-media platform with parts
"This can be a very significant growth area for us and it's a
very natural growth area for us given everything we are doing
already," Mr. Nadella said.
Microsoft said Viva would serve as a platform through which
other software providers could also offer their services.
Salesforce, in December, said it was buying Slack in its biggest
acquisition ever and said it sees the app as a way to offer a
software portal for customers -- a vision similar to
Development of Viva began in the middle of the pandemic, said
Jared Spataro, a corporate vice president at Microsoft, after the
company saw an increase in usage of tools like Teams. But the
company also realized employees experienced burnout and 60% of
staff, according to its research across multiple companies, felt
disconnected from colleagues.
"Our tools were not totally up to the task, they weren't ready
for it yet," said Mr. Spataro.
Mr. Nadella says employee-experience tools are a growing
software segment not unlike customer relationship management was in
the 1990s -- that sector has grown into a nearly $60 billion global
industry. "If you think about this category, it's day one," he
While many of the software tools Microsoft offers to companies
focus largely on easing the job of white-collar workers, Viva is
targeted more broadly to also address the needs of staff on factory
floors or in other locations.
Rolling out employee engagement tools comes with pitfalls,
though. Microsoft, in 2019, offered a feature in its Microsoft 365
suite that allowed managers to track employee activity across a
range of areas and assigned them a points score. It created a
backlash among privacy proponents. Wolfie Christl, a researcher at
Austrian digital rights group Cracked Labs called it a
"full-fledged workplace surveillance tool." Microsoft quickly said
it would anonymize the data.
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Write to Aaron Tilley at firstname.lastname@example.org
(END) Dow Jones Newswires
February 04, 2021 09:14 ET (14:14 GMT)
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