Banks learn the lesson and work their brand and reputation to overcome Covid-19 according to Brand Finance

  • The brand value of 7 banks places Spain in the top 10 worldwide according to Brand Finance. Spain contributes 2% to the total brand value of the ranking.
  • Spanish banks lose 6.3 billion euros due to Covid-19.
  • Ibercaja joins the list of the most valuable Spanish banks in the world.
  • Bankia is the bank that best resists COVID-19, the only one that rises in brand value and position in the ranking.
  • BBVA is the strongest bank in Spain (BSI 85.2 out of 100) and the fifteenth in the world. In a year in which all Spanish brands increase their brand strength, Bankinter is the Spanish bank that does so the most (+6.1 points to 71.5 out of 100).
  • While the 500 bank brands in the 2021 ranking increase their Brand Strength by an average of 1%, the 7 Spanish banks lose -0.7 points on average in 2021. With 92 points out of 100, the Russian Sber Bank is the strongest bank in the world. world.

Access the Brand Finance Banking 500 2021 report here

In Madrid on February 1, 2021.- The strength of the most valuable banks in the world increases 2.2 points on average while brand value falls for the second consecutive year. In this context, seriously impacted by the pandemic, reputation is presented as the integral variable of the strength of the brand that could make them take flight according to the market study carried out for the new report that assesses the most valuable brands in the banking sector in the world. world, Brand Finance Banking 500 2021, the leading independent intangibles valuation consultancy whose rankings comply with ISO 10668 and ISO 20671 for brand valuation and evaluation respectively and which contributes with its brand value database to create one of the indicators of the Global Innovation Index (GII) of the UN.

The photo of the 9 Spanish banks that represent us in the ranking is not much more encouraging. They lose 6.3 billion among all compared to 2020 and the average brand strength also drops -0.7 points. Teresa de Lemus, Managing Director of Brand Finance Spain: “Banking brands have managed to get the positive out of Covid-19 and have wisely used it to improve their reputation, a decision that is undoubtedly correct for the future”

Abanca , which last year climbed 79 in the ranking, this year rises one position to 331 since its brand value drops -0.7%. However, its solidity is demonstrated by the 3.5 point rise in strength, which now stands at 66 points out of 100, the second largest rise behind Bankinter among Spanish companies.

Banks learn the lesson and work their brand and reputation to overcome Covid-19 ac

Bankinter has been the one that has given the starting gun presenting results on January 21. The entity led by María Dolores Dancausa has reduced its profit by 42.4% until September, to 317 million euros, after a provision of 242.5 million euros due to the pandemic. We will have to be attentive to the ‘roadmap’ for the landing on the market of its insurer, Línea Directa , which was postponed and is now scheduled for mid-2021.

It seems that CaixaBank also followed a procurement strategy. According to the results presented last Friday, it closed 2020 with a net profit of 1,381 million euros, a figure that represents a decrease of 19% compared to the previous year, due to the extraordinary provision amounting to 1,252 million that the entity has made for cope with the impact of Covid-19. Bankia, a brand that will disappear when the merger process scheduled for this first quarter of 2021 is completed, reduced its own by 57% in its last presentation of results, on January 27, the entity closed the year with 230 million euros, a 57.6% less. These will be the last results of both separately before the integration of the two banking giants. An announcement that was already taken into account in the analysis for this study and therefore is included in the brand value of this ranking.

Banco Sabadell expects that it will also show declining numbers in its next presentation of results. Chaired by Josep Oliu, it falls 18 places (position 175) in the ranking, experiencing the largest drop among Spanish banks. This is the result of the loss of brand value, -28% lower than in 2020, the biggest drop of the group of 9 national banks in the ranking.

Santander and BBV are our most international representation. Included among the 500 most valuable brands in the world in the Brand Finance Global 500 2021 ranking presented on January 26. The two largest in the sector share a loss of -23% of their brand values. However, in terms of brand strength, BBVA’s scenario is superior. Santander lost -0.5 points (74.6) and BBVA increased in strength 0.6 points to 85.2. It is the strongest Spanish bank.

We have a new member this year, Ibercaja , who with a brand strength of 57.7 is placed 424 in the ranking. The greatest decrease in this indicator is recorded by KutxaBank, which loses 3 points in strength and falls 14 places to 288.

The banking sector as a whole faces a difficult short-medium-term future.

In addition to starting from a difficult situation due to the low levels of profitability in the sector, banks are seeing increased pressure as governments and central banks around the world continue to try to stimulate economic growth: through large aid packages , the reduction of interest rates and the relaxation of regulation in the banking sector. And add to this the increasing probability of multiple credit defaults, companies and consumers struggling to get out of the pandemic.

Teresa de Lemus, Managing Director of Brand Finance Spain: “Unlike their roles as instigators in the past, banking brands could now become the saviors of the global economy helping to overcome the impact of the pandemic.”

This role change has led to a change in the perception of banking. Favorable opinions among consumers are on the rise, and industry brand reputation indicators rise significantly for the first time since the financial crisis

according to the Global Brand Equity Monitor study by Brand Finance.

This improvement in the perception of the banking sector is reflected in the Brand Strength indicator (BSI), which increases 2.2 points on average among the 67 Global 500 brands and 1 point in the current sector ranking (of the 66.5 out of 100 in 2020 to 66.4 out of 100 in 2021) among the 500 in this report despite the drop in brand value.

Banking and telecommunications brands have the lowest results in

reputation and trust in many markets, especially the latter. Although its demand increased, like other sectors during the pandemic, when connectivity became vital, mistrust has eroded considerably.

Effect of the pandemic on the banking sector

As governments struggle to stimulate economic growth in the face of the current global health crisis, profits and interest rates in the banking sector suffer. C Banks learn the lesson and work their brand and reputation to overcome Covid-19 almost two-thirds of the 500 most valuable banking brands in the world have registered losses in value d Banks learn the lesson and work their brand and reputation to overcome Covid- 19e mark, according to our latest report.

The industry has seen a dramatic recession in the last two years compared to the performance of previous years. The total value of the brands in the annual Brand Finance Banking 500 ranking increased by 10% in 2018 to 0.9 billion euros to 1 trillion euros and 15% in 2019 (1.12 billion euros), in 2020 It lost value falling to 0.8 trillion euros.

The economic impact of the COVID-19 pandemic is noticeable, and the forecast for global GDP is for a reduction of more than 4%, which would show the largest global recession since World War II.

According to our analysts, of the 100 brands that lost the most brand value during each recession, 74 were banks. On the other hand, there were also banks 30 of the 100 brands that have overcome a recession with the most success.

In addition to calculating brand equity, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics that assess marketing investment, stakeholder equity, and business performance. Along with revenue forecasts, brand strength is a crucial driver of brand equity. Banks with a Brand Strength Index (BSI) below 60 points out of 100 experienced an average decrease in brand value of 20%, while banks with a BSI score above 70, the average drop in brand value was only 8%, which shows how important it is for banking brands to have stronger brands than their competitors during an economic downturn.

Teresa de Lemus, Managing Director of Brand Finance Spain : “Financial institutions were the main culprits in the latest financial collapse; This time they present themselves as agents capable of helping people overcome the repercussions of COVID-19. “

43 of the 67 Global 500 banking brands lose value

Of the 67 most valuable banking brands in the world included in the Brand Finance Global 500, 43 have declined in brand value year over year. The sum of the brand value of all of them decreased -68,000 million euros, from 818.4 billion in 2020 to 750.4 billion in 2021. This decrease in the brand value of the banking sector reflects the situation in the that many banks are found as a direct consequence of the COVID-19 pandemic.

In particular, Sber has increased its strength and is positioned as the strongest banking brand in the world, increasing its score in the Brand Strength Index (BSI) to 92.0 out of 100. However, Sber has recently announced a change in the form in which it is positioning its brand, seeking to use the trust and reputation that it has accumulated over so many years among Russian consumers, to move into lucrative new spaces such as TV broadcasting, self-driving cars and cloud services.

In the short term, organic brand value growth can be difficult to achieve. One way to see future growth in brand equity in the industry is through mergers and acquisitions.

Many of the large multinational banks have much stronger balance sheets than during the global financial crisis and may be trying to acquire smaller or struggling brands in their struggle to increase market share at a time of simplified banking environment. We have seen it recently in Spain, first with the acquisition of Popular by Banco Santander and more recently with the merger of CaixaBank and Bankia.

Chinese banks dominate the sector

Chinese banks maintain dominance in the Brand Finance Banking 500 2021 ranking, representing a third of the total brand value and seven of the ten that have grown the most in brand value. Chinese banks have been largely impervious to the problems plaguing their competitors in other parts of the world: while two-thirds of the brands in the ranking have experienced losses, Chinese banks recorded healthy growth in average brand value 3%. This is largely due to China’s timely and effective response to COVID-19, which included regulatory policy adjustments for asset management, wealth management and interbank, as well as increased investment in digitization.

Despite a 15% drop in brand value to € 61.9 billion, ICBC remains the most valuable banking brand in the world. As the largest bank in China, ICBC continues to do well with consumers, regardless of the decline in the bank’s brand value due to the negative impact the pandemic has had on the performance of its investment portfolio. However, the brand maintains a healthy lead ahead of China Construction Bank (-10% and a value of 50.7 billion) and the Agricultural Bank of China (-8% less and a value of 45.2 billion), They occupy the second and third place in the ranking, respectively.

China Guangfa Bank is also a notable injection into the country’s portfolio, entering the Brand Finance Banking 500 2021 ranking for the first time at an impressive 84th position and valued at 2.8 billion euros. The Hong Kong Monetary Authority recently granted China Guangfa Bank a banking license, expanding its footprint outside of mainland China.

5 US banks in the top ten

US banks represent almost a quarter of the total brand value of the ranking: the sum of the brand value of the 74 banks in the country reached 233.9 billion euros. Five US brands are in the top 10: Bank of America (down -13% of the value of 27.9 billion), Citi (down -8% to 27.4 billion), Wells Fargo (down -27% and has a value of 27 billion), Chase (-13% less to 24.5 billion). Bank of America remains the most valuable banking brand in the United States and ranks fifth overall, and JP Morgan is the only brand in the top 10 that increases brand equity.

Wells Fargo currently has the lowest reputation rating score of any bank in the United States. It experienced the biggest drop in brand equity, down two spots to seventh, and third among US banks.

Citi , the third-largest U.S. bank by assets, has become the strongest retail bank in the United States with a Brand Strength Index score of 80.7 out of 100 and a AAA brand rating (versus AA + of 2020). Citi has also moved up one place in the rankings to sixth, following a rapid rebound in profits in the third quarter of last year.

Experts set their eyes on Vietnam

Vietnam’s banking sector has seen the highest growth in brand value of any nation in the ranking, with an increase of 659 million euros (from 4.1 billion in 2020 to 4.7 billion in 2021 ). Vietnam’s ability to effectively control and restrict the effects of COVID-19 has enabled it to counteract the industry trend of declining brand equity. Internal reforms have strengthened the accountability of the Vietnamese financial sector, which has had the indirect effect of increasing not only revenues, but also the reputation and trust of brands. The sum of the value of Vietnamese banks during the last 5 years shows a brand value growth of 753%, the second most important national growth in the ranking.

With an increase of 148%, Union Bank of India is the fastest growing banking brand.

The Union Bank of India experienced the largest growth of the year, growing 148% to 1,028 million euros while climbing 128 positions to 169.

The merger between Andhra Bank and Corporation Bank is primarily responsible for this growth, understood as part of a national effort to consolidate the banking space in India. This success is also reflected at the national level. Besides China, India was the only nation among the top 10 countries with the highest brand value in the ranking that has seen growth in its brand. Among all brands they are up 3% this year.

The banks that stand out

While some of the world’s largest banks have failed during the pandemic, 23 newcomers have joined the 2021 ranking, hailing from Europe, Asia, the United States and South America.

The one that joins in the highest position is Truist at position 36, with a brand value of 6.8 billion euros. Formed in 2019, as a result of the merger between BB&T and SunTrust , they were ranked 68th and 86th respectively in the 2019 rankings, with a combined brand value of € 5.9 billion ($ 7.2 billion). . Teresa de Lemus, Managing Director of Brand Finance Spain : “This merger is another example of the power of rebranding and a careful brand strategy, which shows that brands can be revitalized even in the face of a global crisis.”

Sber surpasses BCA and is crowned the strongest banking brand in the sector

Sber has grown its brand strength year over year to become the strongest brand in the Brand Finance Banking 500 2021 ranking and the third strongest brand in the world across all sectors in the Brand Finance Global 500 , with a Strength Index of Brand (BSI) of 92.0 out of 100 and a coveted AAA + rating.

As the largest bank in Russia, Sber has benefited from its brand stability and high levels of customer loyalty. Both driven by the recent brand change carried out with the aim of consolidating its melting pot of services, which includes the banking, health and logistics branches, among others. Sber is poised for further success as the company has announced that it will continue to invest in its brand in the coming year, which is likely to increase its strength score further.

In market research conducted by Brand Finance, Sber consistently outperforms its competitors in reputation and familiarity – it is widely known, always on top of mind, and well regarded. As a result, the recommendation is high. The bank offers, in the eyes of consumers, the best offer available physically and online, which are solid bases to increase the strength of the brand.

Despite this success, Sber is not exempt from the problems stemming from the COVID-19 pandemic. The decline in brand value in local currency terms has been exacerbated by increased risk in the Russian economy, following the mid-year collapse of the oil price and the subsequent weakening of the Russian ruble, which ended in a fall in the general sectoral ranking of -33% to the value of 7.9 billion euros.

As the second strongest brand in the ranking, Indonesia’s BCA has maintained its strength score of 91.6 out of 100 and is the only brand, other than Sber, that has received an elite brand strength rating of AAA +. It remains one of the largest banks in the ASEAN region and has the highest market capitalization value on the Indonesian Stock Exchange.

South Africa brings to the ranking the third strongest banking brand this year, Capitec Bank , which has maintained its BSI score of 89.2 out of 100 and AAA rating. Surpassing 15 million clients as of December 2020, Capitec has more clients than any other South African bank, thanks to its excellent customer service and personalized experience. The South African brand, First National Bank , in fourth place in the world strength ranking, is also the most valuable bank in all of Africa with a brand value of 1,136 million euros (brand value drops -22%).

Access the Brand Finance Banking 500 2021 report here

Every year, Brand Finance tests 5,000 of the largest brands, assessing their strength and quantifying their value, and publishes nearly 100 reports, ranking brands across sectors and countries. The world’s 500 most valuable banking brands are included in the Brand Finance Banking 500 2021 report .

The full Brand Finance Banking 500 2021 rankings, additional ideas, tables, graphs, more information on the methodology, as well as definitions of key terms can be found in the report.

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand on the open market. Brand strength is the effectiveness of a brand’s performance on intangible measures relative to its competitors.

About Brand Finance

Brand Finance is the leading independent, international consulting firm in brand valuation and strategy, with offices in 20 countries. We create bridges between the areas of marketing and finance. We provide clarity to marketers, brand owners and investors when quantifying the financial value of a brand. For our experience in strategy; branding; market research; Visual identity; finance; Tax aspects and intellectual property, at Brand Finance we support the client to make the right decisions that optimize the value of a brand and the entire company by building bridges between marketing and finance.

Every year, the independent brand valuation consultancy Brand Finance values ​​the most important brands in the world. More details on the methodology and terminology, as well as the definitions of terms can be found on our Brand Finance website . Brand Finance collaborated in the development of the international standard on financial valuation of brands, ISO 10668, as well as in the recently approved standard on brand assessment, ISO 20671. Brand Finance is under the ICAEW regulations as a public accounting firm and is the first consulting firm in brand valuation to be part of the international committee on valuation standards, IVSC.


Brand definition

The brand is defined as an intangible asset related to marketing that includes, among others, names, terms, signs, symbols, logos and designs, intended to identify goods, services or entities, creating images and distinctive associations in the minds of the parties interested. , thus generating economic benefits.

Brand value

Brand equity refers to the present value of earnings specifically related to brand reputation. Organizations own and control these profits by owning trademark rights.

All brand valuation methodologies are essentially trying to identify this, although the approach and assumptions differ. As a result, the published brand values ​​may be different.

These differences are similar to the way that equity analysts provide business valuations that are different from each other. The only way to discover “real” value is by looking at what people actually pay.

As a result, Brand Finance always incorporates a review of what brand users actually pay for brand use in the form of brand royalty agreements, which are found in more or less every sector of the world.

This is sometimes referred to as the “Royalty Relief” methodology and is by far the most widely used approach to brand valuations as it is grounded in reality.

It is the foundation of a public ranking, but we always augment it with a real understanding of people’s perceptions and their effects on demand, from our market research database on 3,000+ brands in 30+ markets.

Brand valuation methodology

For our ratings, Brand Finance uses the simplest and easiest-to-understand method possible to help readers understand, gain confidence, and actively use brand ratings.

Brand Finance calculates the values ​​of brands in their rankings using the Royalty Relief approach, a brand valuation method that meets the industry standards set out in ISO 10668.

Our evaluation of the Brand Strength Index or Brand Strength Index, a comprehensive scorecard of brand-related measures, also complies with ISO standards (ISO 20671) and works as a predictive tool for future changes in brand value. and a dashboard to help companies improve marketing.

We do this in the following four steps:

  • Brand impact. We review what brands already pay in royalty agreements. This is augmented by an analysis of how brands impact profitability in the sector versus generic brands. This results in a range of possible royalties that could be charged in the industry by brands (for example, a range of 0% to 2% of revenue)
  • Brand strength. We adjust the rate higher or lower for brands by analyzing Brand Strength. We analyze the strength of the brand by looking at three main pillars: “Income”, which are activities that support the future strength of the brand; “Fairness”, which are actual current insights from our market research and other data partners; “Product”, which are brand-related performance measures, such as market share. Each brand is assigned a Brand Strength Index (BSI) score of 100, which feeds into the calculation of brand equity. Based on the score, each brand is assigned a corresponding brand rating up to AAA + in a format similar to a credit rating.
  • Brand impact x Brand strength. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
  • Forecast of the calculation of the brand value. We determine brand-specific revenue as a proportion of parent company’s revenue attributable to the brand in question, and we forecast that revenue by analyzing historical revenue, capital analyst forecasts, and economic growth rates. We then apply the royalty rate to the expected revenue to derive the brand’s revenue and apply the relevant valuation assumptions to arrive at a discounted present value after tax that is equal to the brand’s value.

The Coca-Cola Company Names the Honorable J. Michael Luttig Counselor and Special Advisor

ATLANTA– The Coca-Cola Company today named J. Michael Luttig, former U.S. federal judge and general counsel for The Boeing Co., to serve as counselor and special advisor to the company and its board of directors.

Judge Luttig will advise the company and its board of directors on tax matters, with particular focus on the company’s ongoing litigation with the U.S. Internal Revenue Service. The company intends to vigorously defend its position and consider all avenues, including appealing any ultimate decision.

Judge Luttig served on the U.S. Court of Appeals for the Fourth Circuit for 15 years, from 1991 to 2006. He is one of the most distinguished judges to serve on the Federal Bench and is recognized as one of the finest legal minds in the country.

“As a former federal judge, longtime corporate general counsel, and U.S. Department of Justice and White House official, Judge Luttig has unrivaled experience with complex legal matters,” said James Quincey, chairman and CEO of The Coca-Cola Company. “Judge Luttig will provide counsel to our company as we continue to vigorously defend our position in the litigation with the Internal Revenue Service. His perspective will be invaluable on the company’s pending tax matter.”

Judge Luttig said, “I am honored to advise The Coca-Cola Company, an American icon.”

Judge Luttig provided the following statement with respect to the company’s tax case with the IRS:

“American companies cannot run their businesses with the uncertainty of the retroactive application of newly minted IRS tax policies to prior tax years that are contrary to the IRS’ own previously approved policies and then be required to pay billions of dollars in unanticipated increased taxes that result from the retroactive application of these new tax policies.

“For 20 years, The Coca-Cola Company reported U.S. taxable income from its non-U.S. operations under a methodology agreed to by the IRS and repeatedly audited and approved by the IRS. In an abrupt departure from its established position long after the tax years in question, the IRS reversed its position, disapproved that approved methodology, required a new tax calculation methodology, and now seeks to impose a retroactive tax increase on the company for past tax years.

“I would expect the federal courts to appreciate the inappropriateness of the IRS’ new methodology for calculating The Coca-Cola Company’s taxes, in addition to the fundamental unfairness of the IRS’ belated demand that the company retroactively pay billions of dollars in taxes beyond those calculated and paid by the company in accordance with IRS-approved tax methodology.”

Judge Luttig begins his engagement with Coca-Cola Jan. 6.

Luttig, 66, most recently served as counselor and senior advisor to the Boeing CEO and board of directors. Luttig served as Boeing’s general counsel from 2006 to 2019.

Luttig joined Boeing after 15 years on the U.S. Court of Appeals for the Fourth Circuit. Before he was appointed to the federal bench by President George H.W. Bush, he served as assistant attorney general at the U.S. Department of Justice and counselor to the attorney general of the United States. He was assistant counsel to the President at The White House from 1981 to 1982 under President Ronald Reagan. From 1982 to 1983, he was a law clerk to then-Judge Antonin Scalia of the U.S. Court of Appeals for the District of Columbia Circuit. From 1983 to 1985, he served as a law clerk and then special assistant to the chief justice of the United States.

A native of Texas, Luttig earned his bachelor of arts degree from Washington and Lee University and his law degree from the University of Virginia.

Forward-Looking Statements

This press release may contain statements, estimates or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause The Coca-Cola Company’s actual results to differ materially from its historical experience and our present expectations or projections. These risks include, but are not limited to, increases in income tax rates, changes in income tax laws or unfavorable resolution of tax matters, including our current tax dispute with the U.S. Internal Revenue Service and the likelihood of success of such dispute or any related disputes; litigation or legal proceedings; and other risks discussed in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2019 and our subsequently filed Quarterly Reports on Form 10-Q, which filings are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only at the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements.

About The Coca-Cola Company

The Coca-Cola Company (NYSE: KO) is a total beverage company with products sold in more than 200 countries and territories. Our company’s purpose is to refresh the world and make a difference. Our portfolio of brands includes Coca-Cola, Sprite, Fanta and other sparkling soft drinks. Our hydration, sports, coffee and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, Powerade, Costa, Georgia, Gold Peak, Honest and Ayataka. Our nutrition, juice, dairy and plant-based beverage brands include Minute Maid, Simply, innocent, Del Valle, fairlife and AdeS. We’re constantly transforming our portfolio, from reducing sugar in our drinks to bringing innovative new products to market. We seek to positively impact people’s lives, communities and the planet through water replenishment, packaging recycling, sustainable sourcing practices and carbon emissions reductions across our value chain. Together with our bottling partners, we employ more than 700,000 people, helping bring economic opportunity to local communities worldwide. Learn more at and follow us on TwitterInstagramFacebook and LinkedIn.

Management control, the key to business success

This introductory course will help financial professionals to take a first step towards the implementation of a Management Planning and Control structure in their company based on financial accounting and business information. From the identification of essential indicators to monitor the business, to the implementation of management accounting that allows obtaining a simple and effective scorecard.

Course duration
5-hour course from Monday to Thursday from 2:45 p.m. to 4:00 p.m. with 40% theory and 60% practical.
Dynamic learning
Students will be able to have the documentation and recording of the course as well as interact with the teacher
1. How to implement a control structure in an SME

• Main challenges in SMEs to implement a control structure.
• How to orient the accounting information towards a management control tool.
• Differentiate the strategic plan from the operational plan.
• Know how to monitor the business with a long-term perspective.

2. Transform financial accounting into management accounting

• Differences between financial accounting and management accounting.
• Management control in times of crisis.
• Management accounting as an essential tool for control.
• How to apply management accounting to evaluate departments, products, profitability.
• The budgeting process of an SME.

3. The balanced scorecard

• The usefulness of having a simple and effective scorecard.
• How to build a scorecard: selection of financial and non-financial indicators.
• Examples applied to commercial and industrial SMEs.


XR in Today’s Reality

To complement our RISE Spotlight event on XR, Amelia Kallman, futurist, author and chair of ISE’s XR Summit, reviews some of the areas where these technologies are making their mark right now.

While XR (extended reality) technologies have been hyped since 2014, it’s only now in the midst of the 2020 coronavirus pandemic and global economic crisis that we are really seeing the true value of virtual, augmented and mixed realities as vital to the future of business success. Across industries including healthcare, manufacturing, education, design, tourism, consumer goods and marketing, XR is helping companies secure the competitive advantage needed to survive and thrive in the years to come.

The greatest challenge the XR community faces is one the industry created itself. Early hype and evangelical proclamations oversold the limited abilities of VR and AR technologies in the early days, fuelling disappointed expectations which the industry has been trying to crawl back from for years. It may be helpful to remember that while AR and VR have been developing next to each other since the 1960s, the industry as we know it today is less than seven years old. That said, the improvements in such a relatively short period have been remarkable, but even so, people adapt and adopt at a much slower pace than the big tech companies often presume.

Forecasts and futures

It’s too simple to judge the success of this industry on how many headsets have been sold (or not sold); instead we should focus on the true business cases for XR. The future of the industry relies on its ability to live up to the promises that XR can save companies time and money, accelerate processes, measure engagement, bring people together in unique and memorable ways, and create new revenue streams that don’t only justify costs, but proportionally outweigh them.

It is projected that by 2030 XR will boost the global economy by $1.5 trillion, with the growth of jobs enhanced by VR and AR jumping from under one million in 2019, to over 20 million by 2030. This growth will partially be attributed to the prevalence of edge computing and 5G. Edge computing is the practice of capturing, processing and analysing data near where it is created, and 5G is super high-speed internet. These innovations will provide the practical infrastructure necessary for mass transmission of large data sets at higher speeds, ensuring a seamless immersive experience anywhere at any time, whether it’s through a mobile, laptop or headset. Reducing latency, improving image quality, and enabling new ecosystems of high-volume, real-time data applications, these expediting capabilities will bolster the viability and benefits of XR in our everyday lives.

Fighting Covid, tackling lockdown

One recent example from the medical industry of how VR is being used to save time and money while enabling collaboration is iMD-VR. A team of scientists from the University of Bristol have been using VR and cloud computing as a means to assist the medical community in the global fight against Covid-19. They’ve created a 3D model researchers can step inside to visualise the unique complexities of the virus, as well as test potential vaccines and cures via molecular dynamics simulations. This level of real-time international collaboration, as well as the ability to visualise and contextualise something invisible to the human eye, wouldn’t be possible otherwise. It is not only a great illustration of how VR can extend our capabilities beyond our physical means, but also how it can help accelerate vital knowledge sharing across geographic locations that could result in saving lives.

Many industries are turning to XR as a way to cope with their remote collaboration needs during varying stages of lockdowns around the world. Global strategic design and innovation consultancy Seymourpowell use VR to enable collaborative design across global teams, encouraging employees to dial in to participate in immersive meetings via tablet, phone, laptop or VR headset. The platform they use, Reality Works, was originally created in 2017 as a tool for their transport team to collaboratively create full-scale 3D vehicle designs, but now they’ve adapted it and expanded use throughout the company, even hosting impactful client pitches in VR and offering the platform to their clients.

Virtual meetings and events

We are seeing evidence that a short-term investment in an immersive platform and instigating a virtual meet-up work culture can save companies time and money in the long term. Earlier this year executive training organisation The Leadership Network moved all their physical masterclasses into the metaverse via their Gemba VR platform. Removing three nights’ accommodation, business travel and subsistence from the equation saved customers an average of £1,800 per person. It also cut down the hours employees had to be ‘out of office’, gaining companies 44% more productivity time throughout the week.

Under the pandemic the events industry has particularly suffered with many turning to Zoom, Hopin and Teams as an alternative to physical conferences. Between screen fatigue, the lack of networking options, and every event starting to look and feel the same, there is a good case to be made for the advantages of hosting in VR. European VR/AR tradeshow Virtuality completely digitalised their physical arena to reflect everything you might expect from a conference space: exhibition halls, booths, auditoriums, networking lounges, all accessible from anywhere in the world via PC, Mac and Oculus Quest. To accomplish this they’ve partnered with Manzalab Group using their digital solution Teemew Event. Many VR platforms designed to support meetings have expanded their offer to include conferencing features, like the immersive education platform Engage, which can now host up to 150 people at one time. It is unique in that it offers full bodied avatars, the ability to run events inside 360 videos, and it also offers spatial recording, which means post-event people can still experience a fully 3D replay.

Tracking eyes, hands… and brains

Advancements in eye and hand-tracking capabilities now included in many headsets offer new ways to measure customer engagement and prove ROI. A global consumer goods corporation partnered with Accenture to build a multi-user VR merchandising evaluation system where they can safely host customer focus groups to evaluate the effectiveness of product placement, advertisements and store layouts before making costly decisions. The simulation ultimately resulted in higher product sales and a greater profit margin as they were able to effectively market test before implementation, ensuring that when it came to deployment they got it right the first time.

Taking things one step further, the integration of bio-data or brain-computer-interface (BCI) technology into headset experiences can give us an even deeper insight into the nuances of customer behaviour and decision-making. EEG brainwave technology MyndPlay was integrated into OculusGo headsets to allow marketers to see which adverts perked an individual’s attention the most so they could then offer people a more personalised product. With recent studies showing 80% of customers are more likely to purchase a product or service from a brand who provides personalised recommendations and experiences, this is a trend we may see more of in the years to come.

The role of social

Using augmented reality to let shoppers ‘try before you buy’ has become even more important to retailers in 2020, adding value to the at-home shopping experience. Earlier this year Gucci partnered with Snapchat for the platform’s first global branded AR shoe try-on lenses. The AR lens overlays a digital version of four pairs of shoes on a mobile user’s feet and allows immediate purchasing via the Snap app. According to Snap data, Snapchat reaches 75% of people ages 13 to 34 and 90% of people ages 13 to 24 in the US, helping brands bond with Gen Z. Also attempting to engage the next generations, Burger King ran an immersive sweepstake during the MTV VMAs that asked viewers to scan an onscreen QR code to activate an AR experience featuring rapper Lil Yachty. People were treated to an exclusive performance, as well as coupons. This drove downloads of their app, which has become crucial to many quick-service brands since the pandemic.

The adoption of AR into our everyday lives through social media platforms like Snap and Instagram was so gradual and natural many people don’t even realise they’re using AR technology. AR has enjoyed a faster consumer adoption than the uptake of VR for several reasons: It’s less expensive to create and free to use, it can be activated through hardware we all already own and have on our bodies most of the time, and it services a very basic function, even if that function is to simply make us look cool online.

The evolution of AR and MR (mixed reality) technologies has the potential to be quite profound however, fundamentally changing the way we interact with the world around us. Recently acquired by FacebookScape Technologies uses AI, computer vision and cloud computing to geopin AR and MR content to specific locations. Effectively this means that in the future the entire world will become real estate for interactive, shoppable digital signage viewed via phones, glasses and, sooner than one may think, contact lenses or implants. While today we might use AR to map a path to physical locations while receiving pop-up ads on our phones, tomorrow these ads may be integrated and activated by our physical environments opening up new opportunities for personalisation, gamification and revenue streams. As we go back to physical environments, whether it be retail shops or museums or other entertainment facilities, AR activations will play a significant in role in our ability to deliver information and engaging experiences while keeping everyone safe.

Moving off mobile

Moving this engagement from the mobile to a ‘heads up’ experience is a space many start-ups are currently vying for. Predicted to disrupt the dreams of young companies in this arena is Apple, which has secured a number of patents for its forthcoming AR glasses. Said to use the iPhone as the computer behind the glasses’ AR functions, this would instantly give Apple a market advantage, as well as remove the weight and subsequent unattractiveness of many of the prototypes we’ve been seeing. One of Apple’s latest patents focused on the ability of lenses to automatically adjust according to the eyesight of its user. It suggests that the optical module associated with individual eyes will be able to modify displayed images to correct the user’s vision.

News of fresh innovations coming to the world of XR, along with evidence of the formation of subindustries, indicate that the industry is continuing to evolve and mature. As the technologies become more democratised, price points will continue to come down and uptake will continue to go up. With alpha-innovators beginning to prove ROI as a result of XR, more companies will have to follow suit if they want to stay in the game. While some might view the constant developments and upgrades as a sign to hold off investment until the hype curve has flattened, the companies adopting these technologies today know that by then it will be too late.

RISE Spotlight: XR in Today’s Reality took place on 15 December 2020. You can find out about the RISE Spotlight series here.

Amelia Kallman
Futurist – Speaker – Author

Amelia Kallman is a leading London futurist, speaker and author. As an innovation and technology communicator, Amelia regularly consults brands, agencies, and governments on the impact of new technologies on the future of business and our lives. She forecasts global trends and behaviours, helping clients navigate innovation, build strategies and deliver industry leading initiatives. She specialises in the emerging opportunities – as well as the risks – of machine learning and AI, big data, IOT, and the New Realities (XR: VR-AR-MR). Recent areas of study include the future of social media, the XR internet, edge computing, and the surfacing human rights issues of tomorrow. She produces and hosts the annual XR Summit as part of ISE and also hosts the XR Star podcast for AV Nation. Amelia’s writing is often featured in WIRED UK, IBC365, and The Big Reveal, her popular innovation newsletter and YouTube channel. Clients include Unilever, Tata Communications, Vodafone, Lloyd’s of London, and UK Parliament. She is a mentor, activist, and is currently writing her next book. @ameliakallman @TheBigRevealUK

Bugatti in the Middle East new Dealer Partner in Saudi Arabia

This Sunday, Bugatti announced its new partnership with SAMACO Automotive, one of the leading and most experienced companies in the automotive luxury market in Saudi Arabia. In the first half of 2021 the French luxury car manufacturer will have its first showroom in Riyadh, the capital of Saudi Arabia. For more than 35 years, SAMACO Automotive has been in a strong partnership with the Volkswagen Group, including high-end brands such as Audi, Porsche, Bentley and Lamborghini – an ideal position to enhance Bugatti’s presence in the Saudi Arabian market.


Microsoft Cloud Strength Fuels First Quarter Results

REDMOND, Wash. — October 27, 2020 — Microsoft Corp. today announced the following results for the quarter ended September 30, 2020, as compared to the corresponding period of last fiscal year:

  • Revenue was $37.2 billion and increased 12%
  • Operating income was $15.9 billion and increased 25%
  • Net income was $13.9 billion and increased 30%
  • Diluted earnings per share was $1.82 and increased 32%

“The next decade of economic performance for every business will be defined by the speed of their digital transformation,” said Satya Nadella, chief executive officer of Microsoft. “We are innovating across our full modern tech stack to help our customers in every industry improve time to value, increase agility, and reduce costs.”


“Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue generating $15.2 billion, up 31% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “We continue to invest against the significant opportunity ahead of us to drive long-term growth.”

Business Highlights

Revenue in Productivity and Business Processes was $12.3 billion and increased 11%, with the following business highlights:

  • Office Commercial products and cloud services revenue increased 9% driven by Office 365 Commercial revenue growth of 21% (up 20% in constant currency)
  • Office Consumer products and cloud services revenue increased 13% and Microsoft 365 Consumer subscribers increased to 45.3 million
  • LinkedIn revenue increased 16%
  • Dynamics products and cloud services revenue increased 19% (up 18% in constant currency) driven by Dynamics 365 revenue growth of 38% (up 37% in constant currency)

Revenue in Intelligent Cloud was $13.0 billion and increased 20% (up 19% in constant currency), with the following business highlights:

  • Server products and cloud services revenue increased 22% (up 21% in constant currency) driven by Azure revenue growth of 48% (up 47% in constant currency)

Revenue in More Personal Computing was $11.8 billion and increased 6%, with the following business highlights:

  • Windows OEM revenue declined 5%
  • Windows Commercial products and cloud services revenue increased 13% (up 12% in constant currency)
  • Xbox content and services revenue increased 30%
  • Surface revenue increased 37% (up 36%in constant currency)
  • Search advertising revenue excluding traffic acquisition costs decreased 10% (down 11% in constant currency)

Microsoft returned $9.5 billion to shareholders in the form of share repurchases and dividends in the first quarter of fiscal year 2021, an increase of 21% compared to the first quarter of fiscal year 2020.

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Quarterly Highlights, Product Releases, and Enhancements 

Every quarter Microsoft delivers hundreds of products, either as new releases, services, or enhancements to current products and services. These releases are a result of significant research and development investments, made over multiple years, designed to help customers be more productive and secure and to deliver differentiated value across the cloud and the edge.

Here are the major product releases and other highlights for the quarter, organized by product categories, to help illustrate how we are accelerating innovation across our businesses while expanding our market opportunities.

Responding to COVID-19

At Microsoft, our focus remains on ensuring the safety of our employees, striving to protect the health and well-being of the communities in which we operate, and providing technology and resources to our customers and partners to help them do their best work while remote. Additional information about Microsoft’s COVID-19 response can be found here.

Environmental, Social, and Governance (ESG)

To better execute on Microsoft’s mission, we focus our Environmental, Social, and Governance (ESG) efforts where we can have the most positive impact. To learn more about our latest initiatives and priorities, please visit our investor relations ESG website.

Webcast Details

Satya Nadella, chief executive officer, Amy Hood, executive vice president and chief financial officer, Alice Jolla, chief accounting officer, Keith Dolliver, deputy general counsel, and Michael Spencer, general manager of investor relations, will host a conference call and webcast at 2:30 p.m. Pacific time (5:30 p.m. Eastern time) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at The webcast will be available for replay through the close of business on October 27, 2021.



Constant Currency

Microsoft presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year. Microsoft has provided this non-GAAP financial information to aid investors in better understanding our performance. The non-GAAP financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Financial Performance Constant Currency Reconciliation

  Three Months Ended September 30,
 ($ in millions, except per share amounts) Revenue Operating Income Net Income Diluted Earnings per Share
2019 As Reported $33,055 $12,686 $10,678 $1.38
2020 As Reported $37,154 $15,876 $13,893 $1.82
Percentage Change Y/Y 12% 25% 30% 32%
Constant Currency Impact $108 $71 $231 $0.03
Percentage Change Y/Y Constant Currency 12% 25% 28% 30%

Segment Revenue Constant Currency Reconciliation

  Three Months Ended September 30,
 ($ in millions) Productivity and Business Processes Intelligent Cloud More Personal Computing
2019 As Reported $11,077 $10,845 $11,133
2020 As Reported $12,319 $12,986 $11,849
Percentage Change Y/Y 11% 20% 6%
Constant Currency Impact $32 $42 $34
Percentage Change Y/Y Constant Currency 11% 19% 6%

Selected Product and Service Revenue Constant Currency Reconciliation           

  Three Months Ended September 30, 2020
Percentage Change Y/Y (GAAP) Constant Currency Impact Percentage Change Y/Y Constant Currency
Office Commercial products and cloud services 9% 0% 9%
Office 365 Commercial 21% (1)% 20%
Office Consumer products and cloud services 13% 0% 13%
LinkedIn 16% 0% 16%
Dynamics products and cloud services 19% (1)% 18%
Dynamics 365 38% (1)% 37%
Server products and cloud services 22% (1)% 21%
Azure 48% (1)% 47%
Windows OEM (5)% 0% (5)%
Windows Commercial products and cloud services 13% (1)% 12%
Xbox content and services 30% 0% 30%
Surface 37% (1)% 36%
Search advertising excluding traffic acquisition costs (10)% (1)% (11)%

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.


Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

  • intense competition in all of our markets that may lead to lower revenue or operating margins;
  • increasing focus on cloud-based services presenting execution and competitive risks;
  • significant investments in products and services that may not achieve expected returns;
  • acquisitions, joint ventures, and strategic alliances that may have an adverse effect on our business;
  • impairment of goodwill or amortizable intangible assets causing a significant charge to earnings;
  • cyberattacks and security vulnerabilities that could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position;
  • disclosure and misuse of personal data that could cause liability and harm to our reputation;
  • the possibility that we may not be able to protect information stored in our products and services from use by others;
  • abuse of our advertising or social platforms that may harm our reputation or user engagement;
  • the development of the internet of things presenting security, privacy, and execution risks;
  • issues about the use of artificial intelligence in our offerings that may result in competitive harm, legal liability, or reputational harm;
  • excessive outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure;
  • quality or supply problems;
  • the possibility that we may fail to protect our source code;
  • legal changes, our evolving business model, piracy, and other factors may decrease the value of our intellectual property;
  • claims that Microsoft has infringed the intellectual property rights of others;
  • claims against us that may result in adverse outcomes in legal disputes;
  • government litigation and regulatory activity relating to competition rules that may limit how we design and market our products;
  • potential liability under trade protection, anti-corruption, and other laws resulting from our global operations;
  • laws and regulations relating to the handling of personal data that may impede the adoption of our services or result in increased costs, legal claims, fines, or reputational damage;
  • additional tax liabilities;
  • damage to our reputation or our brands that may harm our business and operating results;
  • exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange;
  • uncertainties relating to our business with government customers;
  • adverse economic or market conditions that may harm our business;
  • catastrophic events or geo-political conditions, such as the COVID-19 pandemic, that may disrupt our business; and
  • the dependence of our business on our ability to attract and retain talented employees.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at

All information in this release is as of September 30, 2020. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

For more information, press only:

Microsoft Media Relations, WE Communications for Microsoft, (425) 638-7777,

For more information, financial analysts and investors only:

Michael Spencer, General Manager, Investor Relations, (425) 706-4400

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. Pacific time conference call with investors and analysts, is available at



(In millions, except per share amounts) (Unaudited)

Three Months Ended

September 30,

  2020   2019
   Product  $15,803  $15,768
   Service and other 21,351 17,287
      Total revenue 37,154 33,055
Cost of revenue:
   Product 3,597 3,305
   Service and other 7,405 7,101
      Total cost of revenue 11,002 10,406
      Gross margin 26,152 22,649
Research and development 4,926 4,565
Sales and marketing 4,231 4,337
General and administrative 1,119 1,061
Operating income 15,876 12,686
Other income, net 248 0
Income before income taxes 16,124 12,686
Provision for income taxes 2,231 2,008
Net income  $13,893  $10,678
Earnings per share:
   Basic  $1.84  $1.40
   Diluted  $1.82  $1.38
Weighted average shares outstanding:
   Basic 7,566 7,634
   Diluted 7,637   7,710




(In millions) (Unaudited)

Three Months Ended

September 30,

  2020   2019
Net income  $13,893  $10,678
Other comprehensive income (loss), net of tax:
  Net change related to derivatives 4 (2)
  Net change related to investments (201) 577
  Translation adjustments and other 111 (296)
    Other comprehensive income (loss) (86) 279
Comprehensive income  $13,807  $10,957



(In millions) (Unaudited)
  September 30,


  June 30,


Current assets:
   Cash and cash equivalents  $17,205  $13,576
   Short-term investments 120,772 122,951
      Total cash, cash equivalents, and short-term investments 137,977 136,527
   Accounts receivable, net of allowance for doubtful
accounts of $610 and $788
22,851 32,011
   Inventories 2,705 1,895
   Other current assets 13,544 11,482
      Total current assets 177,077 181,915
Property and equipment, net of accumulated
depreciation of $45,417 and $43,197
47,927 44,151
Operating lease right-of-use assets 9,047 8,753
Equity investments 3,103 2,965
Goodwill 43,890 43,351
Intangible assets, net 6,923 7,038
Other long-term assets 13,034 13,138
            Total assets  $301,001  $301,311
Liabilities and stockholders’ equity
Current liabilities:
   Accounts payable  $12,509  $12,530
   Current portion of long-term debt 6,497 3,749
   Accrued compensation 5,714 7,874
   Short-term income taxes 2,384 2,130
   Short-term unearned revenue 33,476 36,000
   Other current liabilities 9,476 10,027
      Total current liabilities 70,056 72,310
Long-term debt 57,055 59,578
Long-term income taxes 28,204 29,432
Long-term unearned revenue 2,829 3,180
Deferred income taxes 187 204
Operating lease liabilities 7,753 7,671
Other long-term liabilities 11,525 10,632
         Total liabilities 177,609 183,007
Commitments and contingencies
Stockholders’ equity:
   Common stock and paid-in capital – shares
authorized 24,000; outstanding 7,564 and 7,571
81,089 80,552
   Retained earnings 39,193 34,566
   Accumulated other comprehensive income 3,110 3,186
         Total stockholders’ equity 123,392 118,304
            Total liabilities and stockholders’ equity  $301,001  $301,311


(In millions) (Unaudited)
Three Months Ended

September 30,

  2020   2019
Net income  $13,893  $10,678
Adjustments to reconcile net income to net cash from operations:
  Depreciation, amortization, and other 2,645 2,971
  Stock-based compensation expense 1,456 1,262
  Net recognized losses (gains) on investments and derivatives (128) 11
  Deferred income taxes (11) (177)
  Changes in operating assets and liabilities:
    Accounts receivable 8,843 10,090
    Inventories (808) (561)
    Other current assets (54) (438)
    Other long-term assets (62) (333)
    Accounts payable 315 (547)
    Unearned revenue (3,064) (2,892)
    Income taxes (983) (3,336)
    Other current liabilities (2,951) (3,320)
    Other long-term liabilities 244 410
        Net cash from operations 19,335 13,818
Repayments of debt 0 (2,500)
Common stock issued 545 427
Common stock repurchased (6,743) (4,912)
Common stock cash dividends paid (3,856) (3,510)
Other, net (235) 286
        Net cash used in financing (10,289) (10,209)
Additions to property and equipment (4,907) (3,385)
Acquisition of companies, net of cash acquired,
and purchases of intangible and other assets
(481) (462)
Purchases of investments (14,580) (23,390)
Maturities of investments 14,266 19,082
Sales of investments 2,414 6,379
Other, net (2,083) 0
        Net cash used in investing (5,371) (1,776)
Effect of foreign exchange rates on cash and cash equivalents (46) (72)
Net change in cash and cash equivalents 3,629 1,761
Cash and cash equivalents, beginning of period 13,576 11,356
Cash and cash equivalents, end of period  $17,205  $13,117
(In millions) (Unaudited)
  Three Months Ended

September 30,

  2020   2019
Productivity and Business Processes  $12,319    $11,077
Intelligent Cloud 12,986   10,845
More Personal Computing 11,849   11,133
  Total  $37,154    $33,055
Operating Income      
Productivity and Business Processes  $5,706    $4,782
Intelligent Cloud 5,422   3,889
More Personal Computing 4,748   4,015
  Total  $15,876    $12,686


The Cloud Journey of Porsche’s Customer Platform ‘My Porsche’

The Cloud Journey of Porsche’s Customer Platform ‘My Porsche’

My Porsche is a digital service platform for customers, fans, and enthusiasts. Marcus Voß, Adrian Föder, and their team are moving the platform to the cloud to deliver a seamless, personalized customer experience across all touchpoints and share their insights, failures and learnings of the My Porsche cloud journey.

The way that automotive customers interact with brands has changed, accompanied by a major transformation of customer needs and requirements. Today’s brand experience expands beyond the car and other offline touchpoints to include various digital touchpoints. Automotive customers expect a seamless brand experience across all channels — both offline and online.

One platform for every customer need: My Porsche

In order to meet these requirements, we brought My Porsche to life — a digital service platform for customers, fans, and enthusiasts that allows them to access exclusive content and take advantage of new functions and digital products and services. Users can for example check their vehicle status and schedule service appointments for their car, update their Porsche ID profile or chose their favorite Porsche Center.

At Porsche, currently, 17 product teams work on different features and modules for My Porsche, aiming to deliver a highly personalized customer experience across all touchpoints. A couple of years ago, Porsche realized that it was time to move My Porsche from Zuffenhausen-based servers into the cloud. In this post, we would like to take you with us on our My Porsche cloud journey. We are excited to share the unexpected difficulties and challenges as well as our learnings and insights of moving a customer portal into the cloud with you.

Getting Started: The My Porsche cloud journey

To begin with, why did we decide to move My Porsche to the cloud? The on-premise-to-cloud-infrastructure transition was motivated by two main factors:

Challenge #1: Worldwide presence without geo latency

Our cars are driven all over the world and the quality is the same everywhere. However, the My Porsche customer experience was not the same everywhere. Especially in locations far away from Zuffenhausen, it was far from optimal, since all services were hosted in Germany. As you can imagine, this resulted in performance issues and high loading times.

Challenge #2: Time to market

Our cloud ambitions were also motivated by the fact that we had to wait weeks to months for the provisioning of a server at that time, which most likely still was not fully ready by then: firewall, load balancers and more had each to be requested individually in ticketing systems and configured by specialized teams with long waiting times due to high load of those teams. Overall it took a lot of time — that was mainly spent waiting. And thus we needed a lot of time to generate business value.

Advantages of cloud computing: Fully automated infrastructure and dedicated control

Cloud computing offers many benefits. It can, for example, drastically improve performance and scalability, allowing us to improve customer satisfaction in every corner of the planet. This is due to many big cloud service providers offering data centers around the world. Another advantage of using the cloud is its self-service approach to consume cloud services via API: APIs provided by the cloud service providers allow a high level of automation, thus following the self-service approach that we strive for. In this combination we have been able to eliminate the waiting times, so we can commission a new server easily within seconds and at any given time. And in addition with repeatable same and high quality, e.g. configuration applied to the server. These kinds of offerings also make it possible for us to empower the teams by giving them their own space in the cloud, where they have full control over what happens. However, as we soon have learned, this newly gained control comes with new tasks and responsibilities.

Anyway, we were ready to kick-off the cloud journey. So let’s go!

On-premise to cloud migration gone wrong: Too much too soon

Securing a cloud provider was relatively easy. We chose AWS as a platform for our cloud infrastructure, and we have not regretted that decision once. The next step was to decide what applications and processes we needed to migrate. Particularly challenging was, e.g. secure access to the cloud, the new CI/CD systems, and the network design, i.e. how do the applications communicate with each other.

Together with our Cloud & Tools team, we started to build a blueprint, taking all the different aspects into account. And we thought we had a solid cloud migration strategy in place. Our plan was to finish this blueprint and roll it out across all teams — everything at the same time. So, we decided to go for it with a big bang! Back then, we thought that the transition process could not be that difficult. We said let’s do it. And we tried to move all of our teams to the cloud at the same time.

But that didn’t work out well.

After more than half a year, there was still not a single team in the cloud. We realized the migration process was not that easy after all and that there were many more unforeseen challenges to tackle than we thought.

The solution: Cloud deployment one step at a time

As a result, we updated our migration strategy. We said let’s focus and move only two teams at a time. We concentrated on a few key aspects: our edge component, Ping Access, and the vehicle-related services of the Portal Services team.

We sent two members from our Cloud & Tools team to each of the My Porsche teams. They would now be part of that team to follow two goals: achieve the go-live and, more importantly, empower and enable the team members. In parallel, they have finished the open parts of the blueprint. When the go-live had been achieved and enablement was completed, the My Porsche teams had to operate its applications and infrastructure on their own without the people from Cloud & Tools. This was something they didn’t have to worry about before — but new adventures bring new challenges with them.

One platform for every customer need: My Porsche

Improved customer experience and internal collaboration: Check

Finally, two My Porsche teams had successfully moved to the cloud in April 2018. We continued with two teams at a time each with two people from Cloud & Tools. But we learned that we had to adapt. As time went on, new technologies came to replace old ones. But more importantly, we learned that every team is different. Each team we worked with had slightly different needs and requirements. Besides a technological transformation, our cloud journey also became a cultural journey.

Today, the My Porsche cloud adoption rate is at roughly 75 percent — and rising: we strive for a full 100 percent cloud coverage. 14 out of 17 teams have migrated to the cloud. The worldwide distribution of our applications has sped uploading time, improving the overall My Porsche customer experience. A huge success!

In our next post, we’ll talk about the importance of cross-functional, dedicated teams and the concept of decoupled alignment. Many thanks to everyone who has been part of the My Porsche Cloud journey so far!

Amandio Pereira, CEO Covet Group

Luxury in interior design – Amandio Pereira, CEO Covet Group