Technology Record - Issue 41: Summer 2026

31 We will showcase some specific public sector scenarios and we’ll focus on a couple of areas. One key topic is customer demand for a cybersecure, hybrid sovereign architecture. We’ve built a position of trust over the past few decades and IDC positions us as the leader in infrastructure and platform in this space. We will continue to earn that trust as we evolve our platforms and toolkits. Another subject is the incredible opportunity to do AI for local, regional and national governments, defence and education. Leading frontier models are available through Azure AI Foundry, which helps to increase reliability by grounding responses in organisational data and applying governance and evaluation. It will be great to explore the solutions and agentic scenarios that can be built on top of that. Customers have a lot of native information in existing investments like Microsoft 365 and Dynamics 365. They need the ability to extract this information and reason against it using their model of choice, with the freedom to shift when they want. That’s the tooling we’re building: a scaffolding that can be used across many different domains. How are Microsoft’s partners adding to that picture? I’m proud we have created a marketplace environment where our partners can thrive. Microsoft is effectively a tool builder and platform operator, and AI leaves so much space for industry-specific and cross-industry innovation on top of our platform. One customer, the Abu Dhabi Digital Authority, has built a platform with around 1,300 citizen services – in effect rewriting the operating system of an entire city. We’re excited that we can bring components of this to any city that is thinking of re-platforming. Our classic software development partners are also creating point solutions based on everything from geolocation to public safety and security. Examples include algorithms around bodycams, city cameras and traffic management and monitoring. Sovereignty offers another big opportunity for our partners, many of whom are local players that are deeply trusted by government agencies as well as commercial customers. We are working to onboard those partners at scale so they can build and run hybrid, cybersecure cloud systems for customers, combining public cloud and Azure local private cloud components. We have the tooling for local players to build an Azure-compatible stack that allows them to develop solutions and lift and shift between public and private cloud, depending on what the client wants. Looking ahead, where do you see AI solutions having the greatest impact? No one can predict the future, but I expect cybersecurity and productivity to be the dominant forces. In terms of cybersecurity, we’re coming out of a period where we’ve often struggled to contain most human-initiated threats. Now we’ll see more focus on AI-initiated and AI-defended threats. Microsoft will play an important role in reminding people of the cybersecurity realities in a world where threats are harder to hide. We’ll also see an unlocking of business processes that operate at massive scale. There’s an opportunity for countries to focus on the diffusion of technology, to train people of all ages and transform their business processes. I’m already seeing the first proof points of productivity gains and I think agentic workflows and transformation will lead to much more efficient, effective, citizen-oriented decision-making at every level of government. Unlocking these opportunities quickly will involve a balance between risk and innovation. What excites me most about the public sector is that, for the large part, none of these organisations are competitors. That means we can share best practices quite freely. The more of these experiments we get, the more we can share, and if the tooling is easy to do, the solutions will be adopted. I think this will snowball because the barrier to entry is so low. That gives me a lot of hope for the future. “ The public sector is pretty much the perfect environment for agentic AI”

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