Yes, we’re on cloud nine and moving fast

As Microsoft turns to artificial intelligence as its battle cry, tech veteran Cally Chan sees the digital transformation trend accelerating, helping to build a smarter, brighter Hong Kong. She talks to Evelyn Yu.

There’s huge demand in this market, and I think there’s room for all of us.” Cally Chan,

In an hour-long chat with Cally Chan Shanshan, the head of the Hong Kong and Macao unit of global software colossus Microsoft skipped outright their new Surface Pro and Window system, gushing about their prowess in the tech world’s a la mode artificial intelligence (AI).

At the rear of the hall where the China Daily interview was held, a jumbo screen showed bustling road traffic scenes in various Chinese mainland cities, where Microsoft’s AIbacked traffic surveillance system could be applied to recognize and analyze the features of vehicles and passengers, including the colors and types of vehicles, and spot breaches of traffic rules.

The question then pops up: Since when has Microsoft — the US tech titan set up in 1975 that has been making most of its money shipping Windows, Office and personal computers worldwide — turned into an AI oracle?

Chan, general manager of Microsoft Hong Kong and Macao, gleefully answered that question without much fuss. She talked of the exciting times when Microsoft was shifting from its traditional domain in software and PCs to an AI solution provider that answers to the huge demand from digital transformation in the corporate world.

An IT veteran who has been closely associated with the field for nearly three decades, Chan is dedicated to ensuring that such a mega plan could be successfully rolled out in Hong Kong and Macao, stressing that the idea is not just to cash in on the digital change momentum, but to “democratize” the technology that makes it accessible to everyone, and to empower employees, enhance efficiency, cut costs and build a smarter, brighter Hong Kong.

The transformation comes at a time as the indisputable “king” in the software kingdom battles stiff competition and stalled growth — with global PC shipments peaking and declining, its Window system gravely undercut by the Android and Apple operating system, and Microsoft’s acquisition of Nokia resulting in a heartbreaking write-off and the loss of more than 1,800 jobs in 2016.

The rise of Microsoft’s cloud unit, Azure, saved what seemed like a giant “sinking boat”. According to the company’s 2017 annual report, commercial cloud services raked in nearly $19 billion, or 20 percent of its total revenue.

It all happened three years ago when Microsoft’s new chief executive officer Satya Nadella, who was brought into the board in 2014 alongside Bill Gates and Steven Ballmer — the only two previous CEOs in the group’s 40-year history — launched his big cloud services push.

Shot in the arm

“Microsoft had been very strong in productivity but, in the past, we had been talking about individual productivity. Everyone was using his or her own Word and PC, and he (Nadella) was thinking how we could put everything in the cloud system and connect different data together and turn that feedback into insights,” says Chan, who attributes most of the credit to the visionary Microsoft chieftain.

The transformation has indeed paid off, with the success of the cloud business providing a shot in the arm for the blue chip’s stock price, which has been treading water for years. Microsoft saw its market capitalization double from $343 billion in 2014 to $755 billion as of May this year.

Since taking over as general manager at the Hong Kong and Macao unit in August last year, Chan has wasted no time in churning out a big client base in Hong Kong with its AI solutions applied in real business scenarios.

“People always believe that AI is just for big companies, but we want to make it available to small and mediumsized enterprises, or everyone else,” she says.

Real-estate brokerage Ricacorp Properties — one of Microsoft’s clients in Hong Kong — started a new sales platform Recap +, using AI on Microsoft Azure, in January this year.

After digitalizing all the property details and having them stored on cloud, property agents, who have been chained to their desks strenuously poring over paperwork to locate suitable properties for clients, can now count on their new platform, whose machine learning and big data features can automatically find the best properties that match their customers’ need.

The brokerage sees profits doubling by using AI to bring operational costs down and better understand clients’ demands.

For work that’s “less art than science”, AI is really in the right position to help, Chan reckons.

About one or two years ago, pitching AI could be a tedious job, she reminisces, with AI solution providers having to identify and approach potential clients and educate them what the technology is. But, things have fared well as many corporations have come to realize the importance of digital transformation, and are fretting over how to adapt themselves to the ever changing world.

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“Every two weeks, I get calls from CEOs, saying they want to do something about AI and if I can help,” Chan reveals.

Gigantic market

These partnerships have quickly grown into a wide range of sectors — from working with physicians to better identify liver cancer and offer more effective treatment options, to building an intelligent platform for shipping companies that could automatically design the optimal routes to make the best use of their containers.

The big drive by companies to digitalize their operations has opened up a gigantic market for cloud services providers. A report of IDC — a market research company commissioned by Microsoft — predicts that some 60 percent of Hong Kong’s GDP would come from digital products or services by 2021 — compared with 5 percent in 2017.

The pie is big, but the competition is fierce too.

Amazon still holds a dominant position in cloud services, commanding more than one-third of the global market share as of the first quarter of 2018, according to Synergy Research Group.

Microsoft continues to eat into Amazon’s lead, grabbing an over 10-percent market share during the same period, followed closely by IBM, Google and Chinese mainland e-commerce giant Alibaba, who are neck and neck in the world market race.

“There’s huge demand in this market, and I think there’s room for all of us,” says Chan.