Microsoft's Nadella: Bringing End-Users, IT, and Developers Together

Microsoft at its core is a provider of platforms, bringing end-users, IT, and developers together in an open ecosystem, Microsoft CEO Satya Nadella told the audience at the Gartner Symposium this morning. Openness has always been a core part of that effort, and Windows is the most open ecosystem out there, he said. In moving to a "mobile-first, cloud-first" world, in particular with platforms like Azure, that openness is even more important.

Nadella appeared via satellite video instead of delivering his keynote in person, having injured his back, and was interviewed by Gartner's Chris Howard and Helen Huntley.

Nadella talked about how his mission for the company is to "empower every person and every organization on the planet to achieve more," as opposed to the goal when he first joined Microsoft, that of putting "a PC in every home and every office." He said the notion of empowering others didn't feel like a big change and noted that Microsoft evolved as a tools company first, an apps company second, and a platform company third. Thus, it has always been important for Microsoft to create products that others can build on.

Nadella did admit that over time the company had developed more of a "know it all" attitude, and said it is important to instead have a "learn it all" mentality (a theme he also mentioned at the Microsoft Ignite conference earlier this month). He talked about aligning his team in one direction, but also how the company is changing its engineering process to be more loosely structured.

One competitive advantage for the company, he said, is its maturity in developing partnerships, and ensuring that those partners could develop on its platforms. He pointed to news such as Microsoft's partnership with SAP that brought SuccessFactors to Azure, which in turn followed a similar announcement about the Adobe marketing cloud at Ignite. Additionally, the company is expanding its government cloud so that it meets the current compliance requirements.

Nadella spent a lot of time discussing AI and how Microsoft has built intelligence features into products such as Cortana, Azure, Windows, Office 365, and Dynamics 365.

"AI will be infused into everything," he said. At the base level, there needs to be infrastructure capable of letting developers create intelligence, such as the solutions available on Azure with CPUs, GPUs, and FPGAs with many different frameworks. Above that, Microsoft is taking everything built below its products—such as the neural networks for speech recognition and image recognition—and making them available as cognitive solutions. Microsoft is putting AI into its own applications, such as Office 365 and Dynamics. Finally, he said, Microsoft is pushing Cortana, which Nadella said he sees as "the third run-time," after Windows and the browser, in which functions will run.

Asked by Huntley about the "Big Brother" factor of an AI knowing everything about you, Nadella said that trust will be an important currency going forward, and companies need to take a very principled approach. He said that privacy required a four-fold approach, dealing with security, transparency (such as the notebook that tells you what Cortana knows about you), control, and compliance. This is a core principle and applies to Cortana, Azure, and Windows.

Compared with Siri and Watson, he said each company is building on its AI strengths. He said Microsoft was building on its "maker" mentality and infusing intelligence into its productivity applications, which he said will differentiate Microsoft's products.

Nadella said Microsoft is all about using AI to augment people rather than replace them and this was a core design decision. He pointed to using neural networks to help radiologists better understand their x-rays. Another important aspect is being accountable and figuring out the level of responsibility the company should take in algorithms created by things such as reinforcement learning.

While there may be a role for the government in regulating AI, he said the tech industry needed to do some level of self-regulation, starting with core design principles.

Microsoft started work on speech recognition in the mid-1990s, but the magic happened in 2014 when it developed the ability to take the neural networks for speech recognition, text-to-speech, and natural language processing and bring them together with Skype data to create the translation product. By creating a new AI division within the company to work with Microsoft Research, he is hoping to get these integrations happening more quickly.

On other topics, Nadella addressed LinkedIn and Minecraft and closed with some advice for the audience of CIOs and other IT leaders.

"I love LinkedIn for LinkedIn," Nadella said when asked about the company's proposed $26 billion acquisition, talking about the core way the business social network works. He was also excited about what Microsoft could enable with the data you could have with permission, such as giving you information about the people you are meeting with or connections between the Dynamics CRM product and LinkedIn's Sales Navigator, but said it was important that "your data remains your data."

He said the company's acquisition of Minecraft was one of the most fun things he got to do as CEO and the company is working on bringing it into education. He talked about Minecraft being used to introduce children to STEM and how it was attractive to both girls and boys. It's part of a bigger trend, and he said the last ten years have been mostly about digital consumption, but the next ten will be about digital creation.

He told CIOs that when thinking about "digital transformation," you've got to be all-in on building your own in-house digital capabilities, and not to be overly constrained with short-term ROI metrics. He noted that "a lot of technologies feel like a dud until they are not," because of things like network effects.

Asked for one piece of advice, he repeated something his predecessor Steve Ballmer said to him: "Be bold and be right." He added, "If you're not bold, you won't have a future; and if you're not right you'll be dead."