Microsoft says it will “work closely” with its partner ecosystem as it joined the forward deployed engineering (FDE) craze.
The software giant yesterday announced it will invest $2.5bn in the new ‘Microsoft Frontier Company’, which will see it embed 6,000 staff at customers to help them design and deploy AI.
It came just two days after CNBC reported that AWS is investing $1bn in a new FDE unit to help customers build and roll out AI systems, and just weeks after similar moves by Google, OpenAI and Anthropic (see here, here and here).
“Going beyond FDE”
Coined by defence contractor Palantir, the term FDE refers to an employee who is embedded directly at a customer in a bid to accelerate a technical transformation.
Microsoft gave a half nod to the term itself, saying the new operating business it has created “goes beyond what has been labelled as FDE”.
In a blog post, Judson Althoff CEO, Microsoft Commercial Business, labelled the unit “the largest, most capable, outcome-driven engineering organisation in the industry”.
“We are making a $2.5bn investment in Microsoft Frontier Company, embedding 6,000 industry and engineering experts at customers to co-design, co-innovate, deploy and continuously improve AI systems at scale based on measurable business outcomes,” he explained.
AWS’ new unit will be seeded with “thousands” of FDEs, AWS told CNBC earlier this week, meanwhile.
OpenAI in May said it is investing $4bn in the new ‘OpenAI Deployment Company’ in recognition that AI deployments are being slowed by a lack of engineering delivery.
“We will work closely with our partner ecosystem”
According to multiple analysts, the rise of these vendor FDE squads reflects the lack of capacity in the channel to help them scale in AI.
“Theoretically, firms like AWS should be able to scale this motion via their extensive partner ecosystem but this is not the quick fix it might seem,” Omdia analyst Peter Bryant wrote in a LinkedIn post.
“While the average partner provides three different types of services on average, recent Omdia polling is showing that more than 40% of cloud partners are attaching no professional services at all to their cloud deals.”
Sarbjeet Johal, Founder and CEO of Stackpane agreed, saying in a LinkedIn post that “relying solely on Global System Integrators can prove to slow and costly, mainly because technology is very new, it is under rapid change all the time, and because SIs’ attention is divided amongst all technology providers”.
Microsoft already has “robust” FDE partnerships with global SI partners including Accenture, Capgemini, EY, KPMG and PwC, according to Althoof.
“To achieve scale, we will work closely with our partner ecosystem to extend this unique value to our customers across all markets and segments globally,” he wrote.
