Microsoft Mesh shows growing importance of Teams, future of VR at work – Business Insider

Microsoft believes Teams is more than just a chat app.

This week, at its virtual Microsoft Ignite event, the company signaled its ambitions to go beyond messaging and video conferencing by announcing new features, including a new virtual and augmented reality platform called Microsoft Mesh essentially, a set of cloud-powered tools to help developers build apps that let people meet and collaborate virtually.

Microsoft says that it plans to bring Mesh-powered features to Teams in the not-so-distant future, letting users meet with each other virtually, in what it pitches as a more immersive way for distributed teams to link up.

More than just a futuristic-sounding technology, however, experts say that the announcement reflects Microsoft's belief, held at the highest levels of the company, that Teams is maturing into a fully-featured platform all on its own.

"There is no question Microsoft is building Teams to be the biggest workflow and collaboration platform they have ever had," Creative Strategies analyst Carolina Milanesi told Insider, calling the potential for the app as akin to "Microsoft Office on steroids."

In October, the last time it provided an update, Microsoft said Teams had 115 million daily active users up from the 75 million it announced in late April amid a surge in users prompted by the pandemic-caused shift to remote work.

Beyond Mesh, Microsoft also used Ignite to announce new Teams features, including enhanced integrations with other Office software like PowerPoint and Dynamics 365.

Some of those features bring Teams up to par with its rivals: Teams now has a "Connect" feature, which, like Slack 's "Shared Channels," allows companies to bring customers or partners into shared chat rooms. It also got a better PowerPoint integration, similar to Zoom's, which places the presenter in front of a slide deck to make it seem more like an in-person presentation.

Ultimately, says Rebecca Wettemann, an analyst with Valoir, the new announcements are "about making the most of the Microsoft portfolio," reflective of how the tech titan is bringing Teams closer into its own portfolio of products and services.

Indeed, says Futurum Research analyst Dan Newman, Microsoft is slowly building out Teams into an operating system for work, bringing all of the software and tools that people need to get work done into one chat-based interface. That's especially important given the current push towards remote work.

"So instead of going into your Windows and operating system and working in an office, you go into Teams and you are in this epicenter of collaboration, communication, productivity, presentation," Newman told Insider. "Others are doing this too, but Microsoft has an inherent advantage because it has that full stack."

The announcement of Mesh reflects the notion of taking this idea into the world of virtual reality, which Microsoft and others are betting on as the next major computing platform.

"Microsoft is one of those companies that has done a lot of interesting cutting edge research, but it's also done a really good job of bringing into the realities of what a business application can be," Wettemann said. "What we're seeing is sort of bringing Microsoft labs and what they're seeing with actual user experiences with Office and Teams together."

Combining Mesh and Teams could also be a watershed moment in the development of virtual reality itself: It "up-levels the conversation for mixed reality," said Patrick Moorhead, the founder of analyst firm Moor Insights and Strategy.

Microsoft late last year signaled the growing importance of the app to the company by adjusting the way executives are awarded bonuses to prioritize growing Teams users. The company's board determines performance stock awards for executives based on metrics such as growing cloud revenue and subscribers, Teams monthly active usage, Xbox Game Pass subscribers, Surface hardware revenue, and LinkedIn sessions.

Microsoft adjusted the weight for each of those metrics to make Teams a bigger priority. Growing Teams monthly active users will now account for twice as much of performance stock awards after the company raised the category's weight to 20% from 10%.

All of that reflects what Futurum's Newman sees as a lasting value for Teams, especially given that remote work will likely be a new normal at plenty of companies even after the pandemic. He doesn't expect Mesh to take off widely until virtual reality headsets get less bulky and cumbersome, but it shows that Microsoft is building Teams to last.

"We need to meet and present. We need to meet and engage. We need to meet and work on content together," Newman said. "So that's why you see Teams becoming sort of an operating system for remote work."

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Microsoft Mesh shows growing importance of Teams, future of VR at work - Business Insider