India’s IT industry is on the right side of history: Microsoft CEO Satya Nadella
Microsoft Azure, the firm’s cloud computing platform, is at the core of Satya Nadella’s agenda for India, and he already has two new clients—Flipkart and SBI
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New Delhi: Microsoft Corp. chief executive Satya Nadella is a man on the move. Traversing three Indian cities in three days, meeting a gamut of people from ministers to chief executive officers (CEOs) to journalists, Nadella is gung-ho about India, Indian IT firms and the future of Microsoft in India. At the core of his meetings has been the company’s cloud computing platform, Nadella’s focus area and one in which the company posted 93% growth in the last quarter. The company is also set to add State Bank of India to its customer list for its growing enterprise cloud services in the country. Edited excerpts:
Can you start by telling us if there is a specific purpose for this visit and where India fits into your overall plans?
For me this trip is all about the cloud work that we are doing in India and the impact it is having. When I think about our cloud itself, we have made significant investments in building out three state-of-the-art data centres, in fact, putting a lot of capital to work, but what is gratifying to see is the momentum of what people are doing on top of it.
Microsoft’s mission is to empower every person and every organization on this planet, but in the context of India we want to make sure it’s not just about our technology but it is the technology that Indian entrepreneurs and Indian organizations create on top of what we bring. For example, yesterday (Monday) I was in Bangalore and we had the Flipkart announcement...(they are) going to drive their next level of innovation on top of our cloud. But it is not just Flipkart. We have many, many start-ups that I have had a chance to see yesterday. People doing things on top of India stack and our cloud, doing many things in healthcare, so it is the entrepreneurs who have a lot of energy that are able to leverage the cloud.
In fact, tomorrow, one of the big announcements is that the State Bank of India is going to move to Office 365 and the cloud. As you can imagine, a financial institution and a regulated entity moving to the cloud is a pretty big moment but we already have lots and lots of banks using the cloud, whether it is ICICI Lombard, Axis Bank or HDFC; we have significant momentum in financial services. Healthcare is another place—LV Prasad (Eye Institute), Apollo, Fortis or Max are all users of our cloud and so it’s great to see big business in India in important sectors leveraging the cloud.
But beyond the big business, what we are also seeing is new products that we are building specifically for the India market. So for example, the other big announcement that we are making tomorrow is a new Skype client built for India with built-in Aadhaar authentication—the idea being, now that people can use a messaging client to actually transact with the banks, government and using a messaging platform like Skype to take advantage of the India stack and the businesses that are being created around it.
We also have a project called Kaizala that first got started in Andhra Pradesh where the government first used it to manage one of the festivals but now the Niti Aayog is using it to manage all the communications between all its employees across Niti Aayog. But increasingly even businesses will use it as a new messaging solution. Instead of using a consumer service, this is a consumer-like service except that, in this case, the data and the security is all managed by the entity. So these are new innovations we are bringing for the Indian market.
So in a sense, you are creating an ecosystem around your cloud in India. Would you look at deepening some of the relationships with these entities in any other way?
But actually these are all pretty deep partnerships. It is not just about consumption of any of our services, it is about them building their own digital platforms on top of our digital platform. Fundamentally, the construct there is all about trust, so these are not just client relationships.
For example, a manufacturer that is using our IoT (Internet of Things) technology to improve productivity is not looking at us (as) a provider of technology but it is at the core of their business. A hospital or diagnostic care is improving efficiency so it becomes much more critical.
By the way, one other segment which is fascinating to see and I’m enthused by is the public sector. Elections in Uttar Pradesh and Tamil Nadu were all using cameras to monitor the polling stations where all the data was going to a public cloud. But here is the real interesting thing. After the election, they were able to bring down the stakes, so in other words they were able to use the taxpayers’ money very efficiently without putting in a lot of capital because elections come only once in a while. It’s not a continuous process.
Similarly in Andhra, they used data to be able to do high school dropout predictions so that they can take the scarce state resources and use it to manage better outcomes for high school students. Now it is of course going to other places like Jharkhand and other places. In Punjab they used speech analysis—took the call centre speech samples and looked at them to see which processes of Punjab should be more automated so that the citizens of Punjab get better service from the government.
And also it’s not (just) public sector, it crosses between (the) public and private sectors. For example, ICRISAT (International Crops Research Institute for the Semi-Arid Tropics), which is a research organization, did a study using IoT technology in the field and again using advanced machine learning in AI (artificial intelligence) to improve crop yield.
They experimented in Andhra and proved they can improve crop yield. Now Karnataka has taken that up. But even other corporations who are in the agri-science business are going to take the same technology and apply it in their work. L.V. Prasad Eye Institute took all their data and said, how we can use it and to do better eye care after a surgery, how can we take eye care to remote locations. Now we have a consortium of all of the eye care institutions in India pooling their data to fundamentally improve eye care in India.
These are some great examples, because to me, that is the real message here in terms of using our cloud, and we are not celebrating the fact that we just have a cloud here or it’s our investment but what people are doing on top of it.
Given that, where do you see Microsoft in India over the next 10-20 years? What is your vision?
If I go back to the birth of our company, we started out when Bill (Gates) and Paul (Allen) first created the basic interpreter for the Altair. And a lot has come and gone but our fundamental identity (is) as a provider of tools and technology—whether it’s students writing term papers, whether it’s small businesses trying to improve productivity or large businesses trying to become more competitive, or public sector trying to become more efficient, our goal is to provide them that technology.
Today it is cloud, tomorrow it is AI, the day after it will be AR (augmented reality) and VR (virtual reality)... technologies will keep coming and going but our identity of empowering individuals and organizations will remain, so when you ask me, 10 years from now, we will be talking about some brand new technology but what will not be different will be the examples I will be telling you—about what Indian institutions and individuals are doing with that.
Did Microsoft lose sight of it for some period before you took over?
The way I look at it is that I am a consummate insider, I have spent my entire adult life at Microsoft—25 years and I am proud of every one of them. Because if you look at it overall, here we are, 42 years after inception, competing with a whole host of new entrants but as relevant as ever. And that doesn’t happen if you are not in fact betting it all every day, because in the tech business it is not about the past but about the future, and your ability to lean in the future long before it is conventional wisdom.
It it is clear that you are not going to have a 100% batting average. No one is Don Bradman, but the way I think about it is that I will be happy with a Sachin Tendulkar average and so I would say we are in a very competitive situation—able to catch some trends even if we miss some trends but we catch more than we miss. Anyone who caught one trend is fine, but ultimately the real question is what about the next one... in our case we have proven that.
But you accept that you fashioned a turnaround for Microsoft? The markets clearly say that.
Well you know, markets are always lagging indicators. The thing is, I will never claim any victory because I think the key thing for me is to stay grounded on two very important aspects for me—our mission and sense of purpose—because that is the only long-term determinant of whether we will succeed or not and staying true to it and driving that in what we do in India and the products we create.
Also, culture. Most organizations lose sight of it. It’s not just about strategy or ability to create technology if you are not committed to a learning culture. It can’t be just a poster on the wall. So that is something I have focused on. I have understood the CEO’s job, perhaps, is more importantly, not picking the technology or strategy but about culture—whether it is diversity, inclusion or the ability to work as one company, or whether it is our ability to support the notion that we have to contribute in every country we participate in, creating economic opportunity. Those are the important aspects.
With respect to what is happening in the US regarding immigration, is there anything you can suggest to the Trump administration to do things differently?
Overall, I always go back to the two principles important to us. As a multinational company, we have to work in every country and make sure that we are contributing to that country’s interest and economic opportunity because that is how we will be measured. The second principle is that we are an American company so we stand for the enduring American values especially around diversity and inclusion.
America is a land of immigrants and, in fact, I am a product of both of these, which is American technology reaching me, growing up in India that allowed me to dream the dream; and America’s enlightened immigration policy that let me live the dream and so therefore, we will always advocate for it, and to your point we will always, in the US or elsewhere, anything we talk about in our response to any policy around immigration, will always stand by these two principles.
How do you see the future of the Indian IT industry given all the challenges it is facing both at home and abroad?
Broadly, when I look at the Indian IT industry, I only see tremendous energy and tremendous prospects and opportunity. Even if you look at what is happening at the India stack, the number of start-ups that I saw yesterday, they are all thinking about healthy solutions—that impact will reach massive scale in India and after, of course, reaching massive scale in India they will even look at other markets.
Every business is becoming a digital business and the need for these services is only going to increase, so India is well-positioned both with the Flipkarts of the world and the system integrators of the world to be able to look at both the domestic demand and market as well as the international market. India will be like any other market with ups and downs but from a secular trend they are on the right side of history.