The phrase move the needle is part of general business jargon, but it is very popular here at Microsoft. You need to know what it means, and more importantly, you need to be willing to throw it around yourself in order to sound more hip and with-it.
In general business speak, move the needle means generates a reaction, but at Microsoft, it has the more general sense of provide a perceptible improvement.
The metaphor here is that there is some sort of meter, like a speedometer or VU meter. Back in the old days, these meters were analog rather than digital, and they consisted of a calibrated arc with a needle that pointed at the current value.
To move the needle is to have a noticeable effect, presumably positive.
Here are some citations.
It's clear that we will need to make some additional improvements if we are to move the needle on performance for customers with high traffic.
By investing in this solution we move the needle forward on reducing friction and increasing speed to measurable value.
That second one wins the buzzword award for today.