7 ms·

Microsoft lowers AI software growth targets

130 points by ramoz 11mo ago

philberto 11mo ago
No wonder if Microsoft failed to deliver a single AI tool that adds value.
- ramoz 11mo ago
  I meet with enterprise clients who explore things like Copilot Studio. Microsoft platforms move too slowly too keep up with innovation pace, and suffer from classic platform restriction in regards to building useful, relevant, and *reliable* integrations into business systems. My advise is to always start from scratch with AI, e.g. "build your own agent" and focus intimately on the rules/guardrails and custom tools you need for that agent to create value. A platform can't do that for you in current day. MSFT needs to stay focused on O365 and coding tools with very simple UX wins. Not introduce custom agent platforms and auto-embed intrusive agents where no one asked for them.
  - pbronez 11mo ago
    Microsoft's Power Platform should be a big advantage. If you already have your data in Outlook/SharePoint, the PowerPlatform makes it easy to access. Unfortunately I've encountered several roadblocks deploying CoPilot Studio & Power Platform for my enterprise. Note: I'm using GCC, so everything is worse than normal. 1) Incomplete integration. Often I just want to write a prompt to create structured data from unstructured data. e.g. read an email and create a structured contact record. There's a block for this in Power Platform, but I can't access it. Studio can do this pretty well, but... 2) CoPilot Studio sucks at determinism. You really need to create higher level tools in Power Automate and call them from Studio. Because of (1) this makes it hard to compose complex systems. 3) Permissions. We haven't been able to figure out a secure way for people to share Copilot Studio agents. This means you need to log into studio and use the debug chat instead of turning the agent on in the main Copilot interface. 4) IDE. Copilot Studio bogs down real fast. The UI gets super laggy, creating a terrible DX. There should be a way to write agents in VScode, push the definitions to source control, and deploy to Copilot, but it isn't obvious. 5) Dumb By Default. The Power Platform has hooks into Outlook and Active Directory. Copilot has access to the latest OpenAI models. CoPIlot Studio has an MCP server for Calendar. Out of the box I should be able to tell CoPilot "schedule a 30min meeting with Joe and Larry next week." Nope. Maybe if I struggle through CoPilot Studio to create an agent? Still no. WTF Microsoft. I guess I'll stop there. I really wanted to like Copilot studio, but it just didn't deliver. Maybe I'll circle back in a couple months, but for now I'm exploring other platforms. PS don't even get me started on how we were so excited to retire our home-grown chat front end for the Azure OpenAI Service in favor of Copilot, only to have our users complain that Copilot was a downgrade. PPS also don't talk to me about how CoPilot is now integrated into Windows and SIGNS YOU INTO THE FREE COMMERCIAL SERVICE BY DEFAULT. Do you know how hard it is to get people to use the official corporate AI tools instead of shadow AI? Do you know how important it is to keep our proprietary data out of AI training sets? Apparently not.
- s1mplicissimus 11mo ago
  Not to give "AI" too much credit here, but I wonder what was the last time MS built a value delivering product in the first place
  - giancarlostoro 11mo ago
    Well they've been making improvements to Notepad, like now it has tabs, and you can close it without saving a single one, sort of how I used Sublime Text for note tracking.
    - tehlike 11mo ago
      Wow. I had no idea. Last time I used windows was probably 13 years ago...
    - cratermoon 11mo ago
      And it has AI now, too. Are those really improvements or change for the sake of change? https://www.youtube.com/watch?v=bmBd39OwvWg https://www.youtube.com/watch?v=bmBd39OwvWg
      - giancarlostoro 11mo ago
        Oh yuck
  - hopelite 11mo ago
    It depends on your perspective on value. MS stock and lobbying, money bags, and government/corporate capture have provided unfathomable value.
  - flohofwoe 11mo ago
    VSCode? Even if some peeps don't like it out of principle because it's an Electron app, it's undeniable that it is extremely popular (...and is actually a lot more lightweight and snappier than 'real' IDEs like VStudio or Xcode, or the various Java-based IDEs). Also indirectly: DirectX saved Linux gaming ;)
Rooster61 11mo ago
I keep wondering how many things like this need to happen before the other shoe drops and the ring-around-the-rosie investment structure collapses. It's become very obvious that "AI" in its current form isn't going to turn a profit, at least not in the short term.
- baal80spam 11mo ago
  It won't happen. Too much $ had already been invested. It will work, one way or the other. It is here to stay.
  - Culonavirus 11mo ago
    The Internet was also "the new industrial revolution" and is here to stay... yet a lot of people lost their pants in the dot-com bubble.
  - digdugdirk 11mo ago
    I'm intrigued by this thought, and I'm not sure it's the right way to look at the current situation. Think about it via a manufacturing analogy. I think we can all agree that modern cnc machining is much better for mass manufacturing than needing to hire an equivalent number of skilled craftspeople to match that throughput. Imagine we had a massive runup of innovation in the cnc manufacturing industry all in one go. We went from cnc lathes to 2d routing tables to 3, then 4, then 5 axis machining all in the span of three years. Investment was so sloshy that companies were just releasing their designs as open source, with the hope that they'd attract the best designers and engineers in the global race to create the ultimate manufacturing platform. They were imagining being able to design and manufacture the next generations of super advanced fighter jets all in one universal machine. Now these things are great at manufacturing fully custom one-off products, and the technicians who can manipulate them to their fullest are awestruck by the power they now have at their fingertips. They can design absolutely anything they could imagine. But you know what people really want? Not fighter jets, but cheap furniture. Do you know what it takes to make cheap furniture? Slightly customized variants of the early iterations that were released as open source. Variants that can't be monitized by the companies that spent millions on designing and releasing them. The tech might work great, but that doesn't mean the investment pays off with the desired returns.
dpflan 11mo ago
Where is AI actually selling and doing well? What's a good resource for these numbers? What are the smaller scale use-cases where AI is selling well? I am generally curious, because LLMs, VLMs, generative AI, advances are proving useful, but the societal impact scale and at this the desired rate is not revealing itself.
- ramoz 11mo ago
  Coding - e.g. Claude Code, Cursor both announced 1B revenue run rates.
  - dpflan 11mo ago
    Agreed, coding is one. What else?
    - Deegy 11mo ago
      Professional legal services seem to be picking up steam. Which sort of makes sense as a natural follow on to programming, given that 'the law' is basically codified natural language.
      - sc68cal 11mo ago
        Except that it keeps getting lawyers into trouble when they use it. https://www.reuters.com/legal/government/judge-disqualifies-three-butler-snow-attorneys-case-over-ai-citations-2025-07-24/ https://www.reuters.com/legal/government/judge-disqualifies-...
        CamperBob2 11mo ago
        Yeah, good point. These things never get better.
      - DontForgetMe 11mo ago
        I don't know how it is in other countries, but in the UK using LLMs for any form of paid legal services is hugely forbidden, and would also be insanely embarrassing. Like, 'turns out nobody had any qualifications and they were sending all the work to mechanical Turks in third world countries, who they refused to pay' levels of embarrassing. I say this as someone who once had the bright idea of sending deadline reminders, complete with full names of cases, to my smart watch. It worked great and made me much more organised until my managers had to have a little chat about data protection and confidentiality and 'sorry, what the hell were you thinking?'. I am no stranger to embarrassing attempts to jump the technological gun, or the wonders of automation in time saving. But absolutely nobody in any professional legal context in the UK, that I can imagine, would use LLMs with any more gusto and pride than an industrial pack of diarrhoea relief pills or something - if you ever saw it in an office, you'd just hope it was for personal use and still feel a bit funny about shaking their hands.
hansmayer 11mo ago
You´d think after Clippy and Windows 7, they´d take the clue and stop producing software that creates friction for users, instead of removing it?
- allisdust 11mo ago
  You mean Vista. Windows 7 was perfect. Till it was ruined by what shall not be named.
  - adithyassekhar 11mo ago
    What ruined windows 7?
    - flohofwoe 11mo ago
      Windows 8. (yes, hardly anybody remembers that there was a Windows version between 7 and 10 - but it did exist, I'm not making it up, saw it with me own eyes on a coworker's PC once).
      - rpowers 11mo ago
        Is 8 where they leaned heavily into touch screen boxes?
        LM358 11mo ago
        Yes. As if it wasn't out of touch enough, they even did it on the server version as well!
      - thewebguyd 11mo ago
        Considering Windows 7 (if you count ESM) was supported all the way up to 2020, it's no wonder people skipped 8 (start menu tiles aside). It was a weird release schedule, and it was split into two versions 8 and 8.1, with 8 only having like 3 years of main stream support, and no ESM and 10 released just two years after 8.1. If you count paying for ESM, someone could have gone from XP->7->11 and still been within support the whole time. Or from vista straight to 10. Fun fact: Windows for Workgroups 3.11 was supported all the way to 2008. I believe it was the longest supported version of Windows.
boh 11mo ago
Along with the Xbox app and eye tracking software that took forever to get rid of (with many-many steps--that still got reinstalled with subsequent updates) out of my "Professional" Windows installation, having co-pilot embedded in every screen finally convinced me to switch to Linux--forever.
- OsrsNeedsf2P 11mo ago
  Have you switched, though? I hear people talking about it, but I doubt they stay the first time they need to configure WiFi. Get a MacBook.
  - kragen 11mo ago
    It sounds like you haven't configured Wi-Fi on Linux in the last 10 or 15 years. It just works these days.
  - PunchyHamster 11mo ago
    I think your Linux knowledge might be out of date by about decade. Well, unless someone gets recommended Arch Linux as a first Linux experience
  - flohofwoe 11mo ago
    Pfft, when was the last time you installed Linux, 1998? Nowadays it's all about getting audio to work ;)
  - mcswell 11mo ago
    I switched a month or two on my desktop. Then when that turned out good, I switched my laptop to Linux, too. No hardware issues on either one, and the WiFi on the laptop works just fine. (My desktop is connected by Ethernet.)
  - thewebguyd 11mo ago
    Linux is fine now, and has been for at least the past 5 years if not more. Even HiDPI works just fine now which has been a pain point for a while (at least, it works great on KDE). That being said, my daily driver is macOS ever since apple silicon released, purely due to the laptop hardware. I keep a reasonably powerful Beelink mini PC mounted under my desk running ubuntu server and most of my work happens there over SSH with Tailscale. If you're primarily a laptop user, I'd definitely recommend this set up (or something similar), you get the best of both worlds.
pcdoodle 11mo ago
[dead]
jsheard 11mo ago
They got in trouble for tricking Office users into paying for AI-enabled plans they didn't actually want, and now they're all out of ideas.
- jagged-chisel 11mo ago
  “Tricking” or “forcing”? I do not participate in the Microsoft ecosystem except only when needed. And every time I have to buy something on someone’s behalf, I can’t just buy or subscribe to The Thing, I have to get all of Office and cloud storage when all they need is an email box.
  - jsheard 11mo ago
    They forced all personal accounts to "upgrade" to more expensive AI plans, but the trick was that they presented the change as if it were a general price increase when the old plans actually still existed, albeit buried at the bottom of a chasm. The only way to revert back was to attempt to cancel your subscription at which point they'd relent and offer the non-AI plans again. Then Australia slapped Microsoft over the head and forced them to apologize: https://news.microsoft.com/source/asia/2025/11/06/an-apology-to-our-microsoft-365-subscribers-in-australia/ https://news.microsoft.com/source/asia/2025/11/06/an-apology...
Havoc 11mo ago
Not surprised. Just bought a office 365 sub that comes with 60 AI tokens. Cool so tried to figure out what that means. Answer - 60 shots of generation/summarization etc per month. ie way below even casual use. Ok so maybe the copilot chat works well if I’m logged in with my paid account then? Nope. Slow and often generates empty code cells. (The enterprise version at work never has issues). ie between low quota and broken tech their consumer level office AI is literally of no use to me.
thomasjudge 11mo ago
Per CNBC, MSFT is denying this report...
- rkaregaran 11mo ago
  https://x.com/amitisinvesting/status/1996245002930753760?s=20 https://x.com/amitisinvesting/status/1996245002930753760?s=2...
- ramoz 11mo ago
  title fixed per microsoft correction
antiloper 11mo ago
Copilot is so useless compared to the rest, using Windows really is like trying to evade having shit smeared in your face all the time.
ChrisArchitect 11mo ago
The submitted article was magically updated by Reuters midday with a new headline: Microsoft denies report of lowering targets for AI software sales growth

130 points by ramoz 11mo ago

philberto 11mo ago

No wonder if Microsoft failed to deliver a single AI tool that adds value.

ramoz 11mo ago
I meet with enterprise clients who explore things like Copilot Studio. Microsoft platforms move too slowly too keep up with innovation pace, and suffer from classic platform restriction in regards to building useful, relevant, and *reliable* integrations into business systems. My advise is to always start from scratch with AI, e.g. "build your own agent" and focus intimately on the rules/guardrails and custom tools you need for that agent to create value. A platform can't do that for you in current day. MSFT needs to stay focused on O365 and coding tools with very simple UX wins. Not introduce custom agent platforms and auto-embed intrusive agents where no one asked for them.
- pbronez 11mo ago
  Microsoft's Power Platform should be a big advantage. If you already have your data in Outlook/SharePoint, the PowerPlatform makes it easy to access. Unfortunately I've encountered several roadblocks deploying CoPilot Studio & Power Platform for my enterprise. Note: I'm using GCC, so everything is worse than normal. 1) Incomplete integration. Often I just want to write a prompt to create structured data from unstructured data. e.g. read an email and create a structured contact record. There's a block for this in Power Platform, but I can't access it. Studio can do this pretty well, but... 2) CoPilot Studio sucks at determinism. You really need to create higher level tools in Power Automate and call them from Studio. Because of (1) this makes it hard to compose complex systems. 3) Permissions. We haven't been able to figure out a secure way for people to share Copilot Studio agents. This means you need to log into studio and use the debug chat instead of turning the agent on in the main Copilot interface. 4) IDE. Copilot Studio bogs down real fast. The UI gets super laggy, creating a terrible DX. There should be a way to write agents in VScode, push the definitions to source control, and deploy to Copilot, but it isn't obvious. 5) Dumb By Default. The Power Platform has hooks into Outlook and Active Directory. Copilot has access to the latest OpenAI models. CoPIlot Studio has an MCP server for Calendar. Out of the box I should be able to tell CoPilot "schedule a 30min meeting with Joe and Larry next week." Nope. Maybe if I struggle through CoPilot Studio to create an agent? Still no. WTF Microsoft. I guess I'll stop there. I really wanted to like Copilot studio, but it just didn't deliver. Maybe I'll circle back in a couple months, but for now I'm exploring other platforms. PS don't even get me started on how we were so excited to retire our home-grown chat front end for the Azure OpenAI Service in favor of Copilot, only to have our users complain that Copilot was a downgrade. PPS also don't talk to me about how CoPilot is now integrated into Windows and SIGNS YOU INTO THE FREE COMMERCIAL SERVICE BY DEFAULT. Do you know how hard it is to get people to use the official corporate AI tools instead of shadow AI? Do you know how important it is to keep our proprietary data out of AI training sets? Apparently not.
s1mplicissimus 11mo ago
Not to give "AI" too much credit here, but I wonder what was the last time MS built a value delivering product in the first place
- giancarlostoro 11mo ago
  Well they've been making improvements to Notepad, like now it has tabs, and you can close it without saving a single one, sort of how I used Sublime Text for note tracking.
  - tehlike 11mo ago
    Wow. I had no idea. Last time I used windows was probably 13 years ago...
  - cratermoon 11mo ago
    And it has AI now, too. Are those really improvements or change for the sake of change? https://www.youtube.com/watch?v=bmBd39OwvWg https://www.youtube.com/watch?v=bmBd39OwvWg
    - giancarlostoro 11mo ago
      Oh yuck
- hopelite 11mo ago
  It depends on your perspective on value. MS stock and lobbying, money bags, and government/corporate capture have provided unfathomable value.
- flohofwoe 11mo ago
  VSCode? Even if some peeps don't like it out of principle because it's an Electron app, it's undeniable that it is extremely popular (...and is actually a lot more lightweight and snappier than 'real' IDEs like VStudio or Xcode, or the various Java-based IDEs). Also indirectly: DirectX saved Linux gaming ;)

Rooster61 11mo ago

I keep wondering how many things like this need to happen before the other shoe drops and the ring-around-the-rosie investment structure collapses. It's become very obvious that "AI" in its current form isn't going to turn a profit, at least not in the short term.

baal80spam 11mo ago
It won't happen. Too much $ had already been invested. It will work, one way or the other. It is here to stay.
- Culonavirus 11mo ago
  The Internet was also "the new industrial revolution" and is here to stay... yet a lot of people lost their pants in the dot-com bubble.
- digdugdirk 11mo ago
  I'm intrigued by this thought, and I'm not sure it's the right way to look at the current situation. Think about it via a manufacturing analogy. I think we can all agree that modern cnc machining is much better for mass manufacturing than needing to hire an equivalent number of skilled craftspeople to match that throughput. Imagine we had a massive runup of innovation in the cnc manufacturing industry all in one go. We went from cnc lathes to 2d routing tables to 3, then 4, then 5 axis machining all in the span of three years. Investment was so sloshy that companies were just releasing their designs as open source, with the hope that they'd attract the best designers and engineers in the global race to create the ultimate manufacturing platform. They were imagining being able to design and manufacture the next generations of super advanced fighter jets all in one universal machine. Now these things are great at manufacturing fully custom one-off products, and the technicians who can manipulate them to their fullest are awestruck by the power they now have at their fingertips. They can design absolutely anything they could imagine. But you know what people really want? Not fighter jets, but cheap furniture. Do you know what it takes to make cheap furniture? Slightly customized variants of the early iterations that were released as open source. Variants that can't be monitized by the companies that spent millions on designing and releasing them. The tech might work great, but that doesn't mean the investment pays off with the desired returns.

dpflan 11mo ago

Where is AI actually selling and doing well? What's a good resource for these numbers? What are the smaller scale use-cases where AI is selling well? I am generally curious, because LLMs, VLMs, generative AI, advances are proving useful, but the societal impact scale and at this the desired rate is not revealing itself.

ramoz 11mo ago
Coding - e.g. Claude Code, Cursor both announced 1B revenue run rates.
- dpflan 11mo ago
  Agreed, coding is one. What else?
  - Deegy 11mo ago
    Professional legal services seem to be picking up steam. Which sort of makes sense as a natural follow on to programming, given that 'the law' is basically codified natural language.
    - sc68cal 11mo ago
      Except that it keeps getting lawyers into trouble when they use it. https://www.reuters.com/legal/government/judge-disqualifies-three-butler-snow-attorneys-case-over-ai-citations-2025-07-24/ https://www.reuters.com/legal/government/judge-disqualifies-...
      - CamperBob2 11mo ago
        Yeah, good point. These things never get better.
    - DontForgetMe 11mo ago
      I don't know how it is in other countries, but in the UK using LLMs for any form of paid legal services is hugely forbidden, and would also be insanely embarrassing. Like, 'turns out nobody had any qualifications and they were sending all the work to mechanical Turks in third world countries, who they refused to pay' levels of embarrassing. I say this as someone who once had the bright idea of sending deadline reminders, complete with full names of cases, to my smart watch. It worked great and made me much more organised until my managers had to have a little chat about data protection and confidentiality and 'sorry, what the hell were you thinking?'. I am no stranger to embarrassing attempts to jump the technological gun, or the wonders of automation in time saving. But absolutely nobody in any professional legal context in the UK, that I can imagine, would use LLMs with any more gusto and pride than an industrial pack of diarrhoea relief pills or something - if you ever saw it in an office, you'd just hope it was for personal use and still feel a bit funny about shaking their hands.

hansmayer 11mo ago

You´d think after Clippy and Windows 7, they´d take the clue and stop producing software that creates friction for users, instead of removing it?

allisdust 11mo ago
You mean Vista. Windows 7 was perfect. Till it was ruined by what shall not be named.
- adithyassekhar 11mo ago
  What ruined windows 7?
  - flohofwoe 11mo ago
    Windows 8. (yes, hardly anybody remembers that there was a Windows version between 7 and 10 - but it did exist, I'm not making it up, saw it with me own eyes on a coworker's PC once).
    - rpowers 11mo ago
      Is 8 where they leaned heavily into touch screen boxes?
      - LM358 11mo ago
        Yes. As if it wasn't out of touch enough, they even did it on the server version as well!
    - thewebguyd 11mo ago
      Considering Windows 7 (if you count ESM) was supported all the way up to 2020, it's no wonder people skipped 8 (start menu tiles aside). It was a weird release schedule, and it was split into two versions 8 and 8.1, with 8 only having like 3 years of main stream support, and no ESM and 10 released just two years after 8.1. If you count paying for ESM, someone could have gone from XP->7->11 and still been within support the whole time. Or from vista straight to 10. Fun fact: Windows for Workgroups 3.11 was supported all the way to 2008. I believe it was the longest supported version of Windows.

boh 11mo ago

Along with the Xbox app and eye tracking software that took forever to get rid of (with many-many steps--that still got reinstalled with subsequent updates) out of my "Professional" Windows installation, having co-pilot embedded in every screen finally convinced me to switch to Linux--forever.

OsrsNeedsf2P 11mo ago
Have you switched, though? I hear people talking about it, but I doubt they stay the first time they need to configure WiFi. Get a MacBook.
- kragen 11mo ago
  It sounds like you haven't configured Wi-Fi on Linux in the last 10 or 15 years. It just works these days.
- PunchyHamster 11mo ago
  I think your Linux knowledge might be out of date by about decade. Well, unless someone gets recommended Arch Linux as a first Linux experience
- flohofwoe 11mo ago
  Pfft, when was the last time you installed Linux, 1998? Nowadays it's all about getting audio to work ;)
- mcswell 11mo ago
  I switched a month or two on my desktop. Then when that turned out good, I switched my laptop to Linux, too. No hardware issues on either one, and the WiFi on the laptop works just fine. (My desktop is connected by Ethernet.)
- thewebguyd 11mo ago
  Linux is fine now, and has been for at least the past 5 years if not more. Even HiDPI works just fine now which has been a pain point for a while (at least, it works great on KDE). That being said, my daily driver is macOS ever since apple silicon released, purely due to the laptop hardware. I keep a reasonably powerful Beelink mini PC mounted under my desk running ubuntu server and most of my work happens there over SSH with Tailscale. If you're primarily a laptop user, I'd definitely recommend this set up (or something similar), you get the best of both worlds.

pcdoodle 11mo ago

[dead]

jsheard 11mo ago

They got in trouble for tricking Office users into paying for AI-enabled plans they didn't actually want, and now they're all out of ideas.

jagged-chisel 11mo ago
“Tricking” or “forcing”? I do not participate in the Microsoft ecosystem except only when needed. And every time I have to buy something on someone’s behalf, I can’t just buy or subscribe to The Thing, I have to get all of Office and cloud storage when all they need is an email box.
- jsheard 11mo ago
  They forced all personal accounts to "upgrade" to more expensive AI plans, but the trick was that they presented the change as if it were a general price increase when the old plans actually still existed, albeit buried at the bottom of a chasm. The only way to revert back was to attempt to cancel your subscription at which point they'd relent and offer the non-AI plans again. Then Australia slapped Microsoft over the head and forced them to apologize: https://news.microsoft.com/source/asia/2025/11/06/an-apology-to-our-microsoft-365-subscribers-in-australia/ https://news.microsoft.com/source/asia/2025/11/06/an-apology...

Havoc 11mo ago

Not surprised. Just bought a office 365 sub that comes with 60 AI tokens. Cool so tried to figure out what that means. Answer - 60 shots of generation/summarization etc per month. ie way below even casual use. Ok so maybe the copilot chat works well if I’m logged in with my paid account then? Nope. Slow and often generates empty code cells. (The enterprise version at work never has issues). ie between low quota and broken tech their consumer level office AI is literally of no use to me.

thomasjudge 11mo ago

Per CNBC, MSFT is denying this report...

rkaregaran 11mo ago
https://x.com/amitisinvesting/status/1996245002930753760?s=20 https://x.com/amitisinvesting/status/1996245002930753760?s=2...
ramoz 11mo ago
title fixed per microsoft correction

antiloper 11mo ago

Copilot is so useless compared to the rest, using Windows really is like trying to evade having shit smeared in your face all the time.

ChrisArchitect 11mo ago

The submitted article was magically updated by Reuters midday with a new headline: Microsoft denies report of lowering targets for AI software sales growth