Microsoft Runs On Trust

It has been another busy year for the technology sector in India. We saw accelerated growth last year but now as some form of normalcy comes back, what are some of the broad trends that you think will continue to scale up digital transformation?

There is no argument about the fact that our lives are more intertwined with technology today than it ever was in the past. This is showing up in the way businesses are done as well. Many businesses who may have been very clear that digital would be a big part of their evolution had no choice but to recognise this was the only way to play in current times. This was why acceleration happened. As we move forward, I see two mega-trends that were trend lines even earlier but have become cornerstones in accelerating and scaling digital. The first in this is data and artificial intelligence (AI) and the second is around trust and security.

Let’s first look at data and AI. I find it fascinating that almost everybody today can look at logarithmic curves in newspapers and talk predictions or other trends. There’s a lot of data and analytics that keeps coming up in media, which was not the case in the past. At a personal level, the comfort in dealing with data and AI has increased among people. This is further accentuated in business. Data is becoming the centre of competitiveness for almost every company, especially in their ability to run analytical and predictive power of data, because that helps businesses manage risk and opportunity. This is a fundamental shift and we truly have an opportunity here to make India a global hub for data and AI.

This can be achieved only when the Indian government, the IT services and digital natives of India pull various levers together. However, a NASSCOM report with McKinsey indicated that there is a potential to add $500 billion to India’s GDP by 2025 if we can unlock the data and AI opportunity in the country. This is big from a global context and not just India.

The second major trend line is the focus on trust and security. There is more awareness today around privacy, where personal data is stored, who has access to it and similar questions both at a personal level and at an institutional level. We believe in this trend line because in general, technology needs to be trusted by design, and not just by adding some locks and whistles. Technology should be natively built for privacy, security, ethics, safety and so on. We, as a company, fundamentally believe in this. It’s not about what computers and technology can do but what they should do. Trust is about operating within a certain set of boundaries. These boundaries could be about security, privacy, compliance & regulation, transparency, ethics and reliability. These are six parameters we internally see as the building block for trust. Therefore, we say, Microsoft runs on trust.

The data and AI momentum will drive this scale in digital transformation as a pull mechanism. However, if you don't manage trust and security, it will be a massive anchor on that momentum. To overcome this, you need to build trust and security natively.

Microsoft has made very large investments in security but the overall security threat landscape is very complex. Can you explain what your investments in this look to achieve and any key factors that you think will impact this in the year ahead?

Let’s take a step back here to understand this better. If we go back 10 years, many of us did not have data on any device. It was still locked up in different places, and most in some physical form. Five years back, it was very digital but it was still locked in on mobiles or laptops that had a physical presence – you could see where your data is stored. Increasingly today, we are more comfortable in saying all our photos or all our personal documents are in the cloud. We are already feeling safer because we remotely control it even in case of a breach. The paradigm towards ‘safer in the cloud than in my physical being’ is showing up. Therefore, security in the cloud has to be built-in. There are threat vectors around us, it may not necessarily be an intrusion. You have to have the capability to be able to pick up any abnormal signal, act on it very quickly, isolate it and then control it. That’s how the security paradigm should work rather than saying, it is locked up.

Security has to be intrinsic to the cloud. We did not call it out earlier but security for us is a separate business line now. Earlier this year, Satya (Nadella, CEO, Microsoft) and Amy (Hood, CFO, Microsoft) spoke to Wall Street and categorically stated that security already is a $10 billion business for us in terms of revenues, growing at 40 per cent year-on-year. We are designing it intrinsically into all our products and services; we call it the zero trust architecture. We are investing roughly over a billion dollars in cybersecurity engineering capabilities every year, which is among the largest investments that you can see in managing these capabilities.

At Microsoft, we analyse 8.2 trillion signals every day and that gives us a very strong database to create trend lines of what to look for while tracking any kind of cybersecurity breach. We also have more than 400,000 companies that use these capabilities, across 120 countries, hence a sectoral and geographical interplay. We can bring a lot of that across the board learning into the cloud. This is why the cloud keeps getting better every day in terms of its ability to manage security and trust.

It has been a big year for Microsoft globally and Microsoft India has done very well as well in terms of growth and contribution to global revenue. Any specific growth areas that you are very excited about in the time to come?

If you look at our mission statement, it is to empower every person and every organisation on this planet to achieve more. Each of those words means a lot to me in terms of our focus and future. Empowering the entire planet with the intelligent cloud and intelligent edge remains a big part of our framework, especially from the lens of our worldview. There will be intelligence in the edge, which is essentially anything you may be using physically like a device or at home or a car. These are all edge points that need intelligence. However, a lot of this intelligence will also be created in the cloud and it is the interplay between the two that defines the future.

We are focussing on engineering and making it seamless in the intelligent edge and intelligent cloud in many situations. This will empower every person in every organisation. The ‘every organisation’ part is especially important to consider. We work with a plethora of companies in the country ranging from the Fortune 500s to the 75 million SMBs (small and medium-size businesses) and everything in between. Technology means very different things to each of them. We need to find solutions for each one of these cohorts and these businesses.

Much of our focus will be on the industry pivot around them and also the various solution areas they need to use. Some will need more on customer management or data or collaboration across employee base or just new things in terms of new applications. It is said more than 500 million applications will get created on the planet in the next few years. Driving tech intensity in these businesses can make this happen. As long as we enable a company to create its unique equation of tech intensity, we are successful.

How do you define the unique equation of tech intensity for a company?

For us, the equation is when every person or every organisation uses certain tech platforms that are available at scale, and within that, build their own IPs (intellectual property). Take the example of the auto industry. The automotive world is hiring more software engineers than technology sectors. Because a car is treated as a data centre on wheels. Every industry and company will build its own IP, which will become its secret sauce. We have this equation of platforms and their capability and you multiply and raise that to the power of trust. If you don’t have trust, you will not scale it beyond a point. To explain in a sentence, it is about platforms at scale, the capability that a company creates and then raises it to the power of trust.

While we are on this subject, do tell us more about your thoughts on the future of workplace, especially now given there is a move towards back-to-office.

The future of hybrid work is core to what we do because we are a tools and platforms company, and we provide many tools for the modern workplace for everyone. It’s a clear hybrid paradox that is in play today. Based on research we conducted with people from very different backgrounds, in many countries, the paradox is that having experienced this work from home during the pandemic, many working professionals are asking for more flexibility, more work from anywhere options for all the focused work they are doing. They like the

independent way in which they can structure their work and get more done. At the same time, people are also saying they need to be in office spaces for public interaction, have face-to-face conversations and they want to build those social connections to collaborate, innovate, be more creative, all of which can happen when you get people together. The paradox is in wanting both, and therefore it would be a hybrid concept. This will be different for every company, and within each company, it would be distinct for every team.

But it is achievable because it will be enabled by tech and that does not need to be different; it can move seamlessly across these situations as we evolve. Our focus is to create that tech capability that companies can choose, whichever follow-up hybrid model they decide to work with.

That is a very critical area for us, and it has to be done with the available technology. We are creating tools built on the back of the platforms people are using already so that they don’t have to adapt to a completely new system. For us, Microsoft Teams has become that platform where many of these workplaces are coming together. In the last few months, we’ve introduced more than 300 new features inside Teams. I like to go and check every day what is new in Teams and experiment when I find something I have not seen before. One good example here is Teams Viva, which is a capability around wellness and self-care that is now being introduced as a core feature of Teams. Viva will be relevant even from a skilling standpoint.

You mentioned SMBs in one of your comments. Just to wrap this up, any thoughts on how you see yourself working with SMBs and young Indian entrepreneurs in the next normal?

This has always been very important for us. Our mission is to be a tools and platforms provider that truly accelerates entrepreneurial activity. Therefore, focussing on this segment in the country is very crucial for us. A large part of our partnership with Jio is to empower SMBs. Jio has a very unique perspective and access into the SMB world in India. We believed that if we can enable all that technology into the Jio go-to markets platform, we will be serving the SMBs in the country. We do this directly as well. Many digital natives today use our capabilities.

One example is iMocha, which offers skills assessment solutions to help enterprises hire job-fit candidates and is on Azure. It empowers hiring managers to screen candidates. You take that use case in an SMB situation, where we are empowering them with technology. On the other hand, there could be a pharma company like Panacea Biotech that runs manufacturing plants with the help of technology. It’s a very wide scale that we have in terms of supporting the SMBs, which is something we truly believe we can do. We also try to bring our capability to them in a simple all-in-one kind of solution. During the pandemic, for instance, we launched a back-to-business box for SMBs that were operating from home. They had never enabled themselves on tech and needed something at the time to just get started again. We are very focused on supporting the SMB momentum in the country that India rides on.