Microsoft CEO Satya Nadella recently concluded his three day tour of India. During his three day tour, Nadella held a CEO summit in Mumbai. He delivered a keynote speech at Future Decoded in Bengaluru. Then he wrapped his trip by meeting young innovators in Delhi. Yes, Nadella had a packed schedule, but he didn’t really make any big announcements. He didn’t announce the fourth Azure region in the country nor did he announce the creation of hundreds of thousands of jobs. In fact, he did not even announce the availability of Surface Pro X in the country.
Yes, that last announcement would have drawn some cheer from people like me, who write about consumer electronics for a living. This is precisely what Satya Nadella’s visit to India looks like from an external lens. When you look through each and every day of his trip, you notice that he did a lot of things. For one, he announced a partnership with Reliance Jio that could become bedrock for Microsoft’s cloud gaming service in the country. He sold developers on the promise of cloud and Azure in a way that Amazon CEO Jeff Bezos could not during his visit. Lastly, he avoided all the controversies that come crawling with visits like this by tech CEOs.
Satya Nadella, of all tech CEOs, has never been immune to such controversies. Back in 2014, he said that women working in male-dominated IT industry should not ask for a raise. At Grace Hopper Celebration of Women in Computing conference in Phoenix, Arizona, he was quoted as saying women should have faith that the system “will deliver” appropriate pay. Nadella was quick to understand his mistake and apologize. In his apology, he said that he was “completely wrong”. Just last month, Nadella was seen critical of India’s controversial Citizen Amendment Act. At an event in Manhattan, Nadella told BuzzFeed News editor-in-chief Ben Smith that what’s happening in the country is sad.
Asked Microsoft CEO @satyanadella about India’s new Citizenship Act. “I think what is happening is sad… It’s just bad…. I would love to see a Bangladeshi immigrant who comes to India and creates the next unicorn in India or becomes the next CEO of Infosys” cc @PranavDixit
— Ben Smith (@benyt) January 13, 2020
It is rare for CEOs of tech companies to take stance against political actions in the countries they operate in. However, Nadella’s reaction to CAA seemed both personal and thought after – at that time. It was a short-lived moment of personal reflection. Microsoft soon released a watered down statement to balance Nadella’s comment to Smith. In the face of that statement, Nadella’s India visit should have seen some backlash. However, he came, he saw and he went back unscathed. This was probably a better outcome than one Bezos experienced in January. In fact, Amazon CEO tried to charm this young nation with his colorful ethnic wear, by flying kites, and even paying tributes to Mahatma Gandhi at his memorial.
While Bezos announced a $1 billion investment, his visit was controversial even before he landed. India’s antitrust regulator announced an investigation into Amazon. The business owners in 300 Indian cities protested the visit and carried signs that read “Jeff Bezos go back!”. Nadella did not put on any kind of charm and also avoided controversies. He can partly thank US President Donald Trump, who hogged all the limelight, this week. For a company like Microsoft and its CEO Nadella, controversies could result in significant loss of productivity. In a hyperlocal, hyper partisan nation like ours, avoiding controversies is half the battle won. But Nadella also won the other half of the battle – selling Microsoft’s mission statement.
Azure as the world’s computer
Ahead of Future Decoded keynote in Bengaluru last week, I was expecting Nadella to announce a fourth Azure region. Microsoft already has three Azure regions in Pune, Chennai and Mumbai. A fourth region in north Indian could have been useful to deliver Infrastructure as a Service to companies in those regions. With edge computing set to become a new norm, additional server regions will help bring down latency and deliver peak performance. But Microsoft and it’s India-born CEO showed an even more dynamic picture.
Since taking over as only the third CEO of Microsoft, Nadella has transformed the company. He has transformed Microsoft from a B2C company to business productivity company. This change in product direction has worked wonders for the company. Apple calls itself a personal computer company. Every product it makes, be it iPhone, iPad or Mac, are designed for truly personal experience. Similarly, every tool that Microsoft makes today are designed to boost productivity of people around the world. That ideology reflects in Microsoft’s mission statement as well. Microsoft aims “to empower every person and every organization on the planet to achieve more.”
Computing is an important part of this mission statement. By building Azure as the world’s computer, Microsoft is showing how computing has evolved in the past decade. During his keynote, Nadella explained how he looks at computing as evolution from classical to quantum to hybrid computing. While the company lost out on mobile computing, it doesn’t want to lose out on the other two forms of computing. It is already designing a quantum computer. Azure could play a key role in the future where computing becomes hybrid. By hybrid, Nadella is looking at computing happening on devices with new form factors.
These could be a combination of smart screens, wearables, AR headsets. Since these will be IoT devices, they will also be edge computers, which will rely on Azure regions for computing power. In his book “Hit Refresh”, Satya Nadella writes that C in CEO stands for culture. In retrospect, one can say that C in CEO stands for computing. This vision of building a cloud service as the world’s computer has worked wonders for Microsoft in the past six years. Before becoming CEO of Microsoft, Nadella was executive vice president of Microsoft’s Cloud and Enterprise group.
While Amazon Web Services remains the leader in cloud business, Microsoft is catching up real fast. It has helped a number of companies with digital transformation by moving from on-premise servers to hybrid cloud computing. Some of these customers have been snatched away from AWS. Back in 2018, Microsoft snatched Ola from AWS and in the previous year, Flipkart became one of its biggest customers. It recently signed a partnership with Eros Now to help the Indian Entertainment company build an online video platform powered by Azure.
The company offers Azure Stack as a combination of private, public and hybrid cloud computing platform to its customers. While it works with over 200,000 large, medium and small enterprises, the company highlights the work with over 5,000 startups. That was another purpose of Nadella’s visit to India – charm the developers.
Win developers and startups
“The next person up is a developer at heart,” Anant Maheshwari, President, Microsoft India said as he introduced Satya Nadella at the start of Future Decoded keynote. “Talking to developers is perhaps the favorite thing,” Nadella said at the start of his keynote. Microsoft’s relationship with developers dates back to the start of the company. Both Bill Gates and Paul Allen were developers at heart. Steve Ballmer, who succeeded Bill Gates, as the second CEO of Microsoft, was even more passionate about developers.
His chant “Developers, Developers, Developers” at Windows conference remains iconic even to this day. However, developers have not always had a cozy relationship with the company. As Microsoft started revamping its Windows Mobile platform to Windows Phone and later to Windows 10 Mobile, developers deserted for Android and iOS. Nadella knew that there was no opportunity to bring these developers back. He pivoted from getting developers on its platform to selling development tools to these developers.
Microsoft Visual Studio remains a prominent tool for development and the company acquired GitHub, a popular code-repository service, for $7.5 billion in stock. Developers love freedom and prefer to bring their own ingenuity to solving mission critical problems. With its tools and acquisition, Microsoft has embraced openness that was not seen when the company was helmed by Bill Gates or Steve Ballmer.
Before Satya Nadella became CEO, Microsoft was respected, but also feared by its peers. Now, Microsoft is suddenly the company that follows the “Don’t be evil” philosophy. It is the company setting the agenda for good practice. It is becoming the advocate for immigrants in a country where the President won the ballot on promise of getting rid of people from other countries. The Redmond-based company joined Princeton University filed a case against the US government to overrule its decision to cancel the Deferred Action for Childhood Arrivals (DACA) program. It is also pushing empathy and trust as a new value in the race to the top.
Trust as a new business model
Technology companies are among the most valuable in the world. At the time of writing, Microsoft is valued at $1.2 trillion. The top five tech companies in the world have a combined valuation of around $5 trillion. However, they are also suffering from serious lack of trust. Soon as Donald Trump became President of the United States in 2016, tech companies started seeing the rug being pulled out from their comfortable position. Tech companies and their leaders were no longer seen as good people of the society. Some see them as capitalists while others see them tilting the moral compass.
In such difficult times, Microsoft used ‘trust’ as a key word to define its products and services. It is not Facebook, which sells user data to advertisers or has failed to protect privacy of over 2 billion users on the platform. The company is not Google, which acts as an all knowing internet company. It is no Amazon either, which constantly battles independent companies, to sell products at their cheapest price on its e-commerce platform. While it does offer search, digital assistant and shopping services, they are minuscule in terms of usage.
At the Future Decoded conference last week, Microsoft gave Tools and Weapons, a book by Brad Smith and Carol Ann Browne to every attendee. The book with foreword by Bill Gates, takes a look at how technology can be used to both empower and threaten the society. The last two years have been a moment of reckoning for most tech companies. The trust in them is at all-time low and security/data breaches that get revealed every other day don’t help the case. By standing up for developers, immigrants and customers, Microsoft is showing that it can be trusted.
As Gates notes in his foreword, the US government’s antitrust suit against the company, imperilled its ability to innovate. However, it also forced Microsoft and other tech companies to engage more with leaders in the US, Europe and other markets. As FCC looks at smaller acquisitions by the tech companies in the past decade, Microsoft is trying to lead the curve rather than watch from the sidelines. The company has been a vocal critic of facial recognition technology. It has also been vocal about the disadvantages that come with the use of artificial intelligence.
At Bengaluru airport, there are facial recognition systems being deployed for verification and entry through the boarding gates. The question is – do we need them? Facial recognition is not yet up for public debate in the same way as AI but it soon will be. At that juncture, Microsoft and other tech companies will need to define the appropriate use with leaders of this world. Tools and Weapons takes a look at these issues and lays an initial blueprint for regulation. The term regulation itself sends shockwaves across the tech circle but it might be the right course.
If you trust Apple with your privacy and data stored on your iPhone, Microsoft wants to be trusted with the privacy of its customers. By taking the higher ground, Satya Nadella has shown repeatedly that the company will do what is right. He may have faltered, but Microsoft is suddenly the company that can be trusted, by both enterprises, startups as well as consumers. This is a leverage that Microsoft under Gates or Ballmer did not enjoy. As we embark on a new decade, tech companies need to be trustworthy and their leaders need to be morally compassionate.
Disclaimer: Microsoft India invited the author to attend Future Decoded keynote in Bengaluru. The company paid for travel and accommodation.