It Will be In­dia First in In­dia, Amer­ica First in Amer­ica...

The Economic Times - - The Satya Nadella Interview -

One of the big bets you have made to re­shape Mi­crosoft is the cloud. What was the ra­tio­nale? There are three ma­jor parts to what we have been up to in the past three years. Quite frankly, it starts with be­ing very clear about the sense of pur­pose, your iden­tity and why you ex­ist as a com­pany, and be­ing able to an­swer that very crisply. Mi­crosoft was cre­ated first when Bill (Gates) and Paul (Allen) built the BA­SIC in­ter­preter for the Al­tair. Ob­vi­ously a lot has hap­pened since then in terms of tech­nol­ogy. But, the core sense of pur­pose and the iden­tity that is there in our ge­n­e­sis is very rel­e­vant. It is about putting tech­nol­ogy in other peo­ple’s hands so that they can go on to cre­ate more tech­nol­ogy. That’s how I think about plat­forms and tools and any­thing we do. We think about peo­ple, and in­sti­tu­tions that peo­ple build to out­last them. We think about this on a global scale.

My story wouldn’t have been pos­si­ble if it was not for Mi­crosoft tech­nol­ogy reach­ing me while grow­ing up in In­dia. We think about that go­ing for­ward.

But the last piece is per­haps the most im­por­tant. It’s not about our tech­nol­ogy at the end of the day. It is what you do with our tech­nol­ogy — be it a stu­dent writ­ing a term pa­per, or a small busi­ness be­com­ing more pro­duc­tive, a large busi­ness be­com­ing more com­pet­i­tive, a pub­lic sec­tor or­gan­i­sa­tion be­com­ing more ef­fi­cient. That’s what we want to cel­e­brate. To be that, is at the core.

Change doesn’t start by just mak­ing a tech­nol­ogy bet. It starts be­ing very clear when your sense of pur­pose drives you.

In to­day’s world, you got to have a first-class view be­ing a tech com­pany on what is the tech­nol­ogy par­a­digm that you are go­ing to in­no­vate in. And that’s what I de­scribe as cloud-first mo­bile-first.

It is not the mo­bil­ity of one de­vice, it’s the mo­bil­ity of the hu­man ex­pe­ri­ence that spans across all your de­vices. Even to­day, when we were look­ing at all the star­tups, you can in­creas­ingly see it. Take the in­ter­net of things, the fact that there is go­ing to be data com­ing from all the com­put­ing is be­com­ing ubiq­ui­tous. Now, the cloud is what is go­ing to en­able that mo­bil­ity.

That’s what we felt build­ing out the cloud in­fra­struc­ture for what are the emerg­ing trends of dis­trib­uted com­put­ing. And also, the re­al­i­ties of run­ning a world­wide cloud in­fra­struc­ture. We are in more re­gions than any­body else. We run with more com­pli­ance and data res­i­dency than any­body else.

We will also al­ways have the hy­brid cloud be­cause of the Azure stack. This means that there is no lock-in. Cus­tomers care about it, gov­ern­ments care about it. So, that’s the bet and in­vest­ment that we have made to be able to re­ally bring the next gen­er­a­tion of, what I think, is the plat­form that is go­ing to fuel eco­nomic growth.

What is your over­all read­ing of the In­dia Stack and In­dia’s dig­i­tal pro­grammes? It is very very ex­cit­ing, I must say. In­dia Stack’s vi­sion of hav­ing a pres­ence less-cash­less-pa­per­less vi­sion — which is fun­da­men­tally about bring­ing down trans­ac­tion costs in the econ­omy so that ev­ery cit­i­zen, small busi­ness and large busi­ness can all ben­e­fit. This is a grand vi­sion. We are very fo­cussed on mak­ing Of­fice 365, Dy­nam­ics 365, Win­dows 10 or Azure help In­dia Stack lever­age all of our tech­nol­ogy.

Would you say that In­dia is sig­nif­i­cantly ahead of other emerg­ing mar­kets in this seg­ment? Dif­fer­ent coun­tries have done dif­fer­ent things. I would say, in terms of hav­ing a very com­pre­hen­sive vi­sion of a stack — that’s pretty unique. Of course, you have to bring it to fruition, up­scale. That said, even what has been achieved, the sheer num­ber of iden­ti­ties and the trans­ac­tion vol­umes I’m see­ing is tremen­dous. In­dia over the past 8-9 years, over two gov­ern­ments — that’s an­other great sign of ma­tu­rity for In­dia to per­sist with the pro­gramme across party bound­aries, across elec­tions and to keep on build­ing.

With the ad­vent of AI, one of the in­ter­est­ing de­vel­op­ments is the talk about a Univer­sal Ba­sic In­come. Given that In­dia needs jobs, what is likely to be the ef­fect of AI on jobs? In­stead of just pi­geon­hol­ing or think­ing about just AI, if I look at it in a world­wide ba­sis, there is tremen­dous eco­nomic growth. In­dia is a shin­ing ex­am­ple of growth. But, the world, which used to grow at 4% is now grow­ing at 2%. So, we need new tech­nol­ogy break­throughs in or­der to have the type of growth we had in the 20th cen­tury. If any­thing, we need more tech­nol­ogy and AI is def­i­nitely go­ing to be in­stru­men­tal.

The ques­tion is, as sur­plus gets cre­ated how is it go­ing to be eq­ui­tably dis­trib­uted? I look back to the In­dus­trial Revo­lu­tion, the last time when there was a bit of in­equity around re­turn on labour and re­turn on cap­i­tal and that was when the labour move­ment was formed. That was when what was un­der­stood as so­cial se­cu­rity was cre­ated. I think we will have to look for­ward to the new mech­a­nism.

I know that in In­dia there is a talk of ‘what is a Univer­sal Ba­sic In­come’? But more than the so­cial sys­tems, the skilling... One of the other things that econ­o­mists would call the ‘lump of labour fal­lacy’ has al­ways been dis- proved. It’s not that there is only fixed amount of labour needed. There will al­ways be dif­fer­ent type of labour that is needed.

Maybe it is in fact, hard dis­place­ment from man­u­fac­tur­ing to ser­vices. Then you have to train peo­ple for th­ese new jobs. Con­tin­u­ous learn­ing and skilling, not just high-end, but even mid skills, vo­ca­tional train­ing with ma­chines and AI be­comes im­por­tant.

Over­play­ing, as if we al­ready have ar­ti­fi­cial gen­eral in­tel­li­gence is a bit of a red-her­ring. It’s bet­ter for us to deal with to­day’s is­sue. I look at who is AI help­ing in In­dia? The gov­ern­ment of Andhra Pradesh uses AI to de­tect high school dropouts so that they can take th­ese scarce re­sources of the state and ap­ply it in smarter ways. Now, the same is go­ing to Jhark­hand and Pun­jab.

I think, there is the good that comes with it, but also very mind­ful of the dis­place­ment of hav­ing both the pol­icy frame­work and the skilling frame­work that goes with it, is very im­por­tant.

Are you say­ing that his­tory says that all new tech­nolo­gies cre­ate more jobs than they de­stroy? Just that we don’t know what’s the na­ture of th­ese jobs? Yes, that is one. And also his­tory proves that if there is that great grand fu­ture that has at least not hap­pened so far where there are no jobs, then there is no need to cre­ate things like ba­sic in­come be­cause sur­plus will still be there. Then, the ques­tion is how are peo­ple us­ing it? The other thing I look at is in a coun­try like In­dia, where there is go­ing to be a ser­vice led econ­omy, there are go­ing to be many jobs. There are many things AI will never be able to do such as show em­pa­thy.

When there is a lot of ar­ti­fi­cial in­tel­li­gence, real in­tel­li­gence will be scarce, real em­pa­thy will be scarce, real com­mon sense will be scarce. We can have new jobs that are ac­tu­ally pred­i­cated on those at­tributes.

Do you see a case for labour mo­bil­ity, es­pe­cially with in­creas­ing pro­tec­tion­ism? In tech, there is a lot of worry about mo­bil­ity to the US… The way I look at it, as an MNC our first and fore­most job is to op­er­ate ev­ery­where in the world and make sure that we con­trib­ute to that mar­ket in a fun­da­men­tal way. When I think about In­dia, we do not mea­sure suc­cess based on our top and bot­tom line.

None of that top or bot­tom line is go­ing to be sta­ble if we are not cre­at­ing em­ploy­ment. Our own di­rect em­ploy­ment is one mea­sure. What is the em­ploy­ment in the part­ner ecosys­tem, around Mi­crosoft.

There is no rea­son we come in as rent seek­ers. We have to cre­ate op­por­tu­nity. There are over 10,000 part­ners, the health of those part­ners, how are they cre­at­ing em­ploy­ment, what is their busi­ness model evo­lu­tion. How are we help­ing be it in ed­u­ca­tion or in health, or in pub­lic sec­tor, small and large busi­ness? That’s at the core. The over­all labour mo­bil­ity in the world is go­ing to be de­fined by ev­ery coun­try’s im­mi­gra­tion pol­icy, ev­ery coun­try’s trade deal or pro­tec­tion­ism. Ev­ery coun­try right­fully so, should think about their own na­tional in­ter­est first.

It’s go­ing to be In­dia first in In­dia, UK first in UK, Amer­ica first in Amer­ica. Our job is to op­er­ate in all of th­ese coun­tries with th­ese prin­ci­ples of lo­cal op­por­tu­nity cre­ation.

Amer­ica is a unique so­ci­ety, where some­one like you or Sun­dar Pichai, purely on merit can go on to head iconic Amer­i­can com­pa­nies. Do you see that chang­ing? As I said, there are two core prin­ci­ples that I keep in mind when we think of our own op­er­a­tions. One is, as I ref­er­enced, MNC op­er­at­ing in ev­ery coun­try and be­ing a re­spon­si­ble op­er­a­tor where you mea­sure your­self by the lo­cal op­por­tu­nity you cre­ate.

The sec­ond thing is to truly im­bibe the Amer­i­can val­ues — af­ter all we are an Amer­i­can-based multi­na­tional — and the Amer­i­can val­ues have al­ways been about in­clu­sion and di­ver­sity. It’s a land of im­mi­grants. And I am a prod­uct of both.

The first prin­ci­ple at play was Amer­i­can tech­nol­ogy reach­ing me in In­dia which made it pos­si­ble for me to dream the dream. And then the en­light­ened Amer­i­can pol­icy is what led me to live the dream. I think those are the things that we will al­ways ad­vo­cate for.

Your point about ‘will things change or not change?’ I think, Amer­i­can in­sti­tu­tions and Amer­ica as a coun­try has al­ways stood for its en­dur­ing val­ues and will al­ways stand. There may be some pol­icy changes. It’s right for any gov­ern­ment to look at their na­tional se­cu­rity in­ter­ests, their im­mi­gra­tion poli­cies in that con­text. At the end of the day, the Amer­i­can dream and the Amer­i­can en­light­ened im­mi­gra­tion pol­icy es­pe­cially for high-skilled work­ers is some­thing that I’m op­ti­mistic about. Do you have any ad­vice for Uni­corns in In­dia now that some are in a bit of trou­ble? Ul­ti­mately, cre­ation of any­thing new is per­sis­tence. It’s be­ing able to stick with it and not swing with the moves. As al­ways, things get over hyped and you go neg­a­tive too quickly. You can’t be hi­jacked by ei­ther of the two moods. You got to be fo­cussed on the busi­ness and cus­tomer value.

Even the way Binny (Bansal) talked about, al­ter­nately is about tak­ing some­thing like fash­ion. How can they in­no­vate in fash­ion to meet the needs of the In­dian con­sumer? That’s what is go­ing to de­fine suc­cess or fail­ure.

Hav­ing a real tech­nol­ogy agenda, in­vest­ing in the right ar­eas, get­ting the max­i­mum lever­age, be­ing smart about the part­ner­ships you form, that’s what I would look at. The en­tre­pre­neur­ial chaps in In­dia — the am­bi­tion, the qual­ity of their man­age­rial ca­pa­bil­ity, their tech­ni­cal prow­ess are world class.

Com­pe­ti­tion only makes you stronger. When was the last time In­dian com­pa­nies were able to com­pete with global multi­na­tional on equal terms? That it­self is a break­through.

Some of them have taken to ad­vo­cat­ing Chi­nese-style poli­cies. The own­ers of Flip­kart and Ola have openly ad­vo­cated their pol­icy stand. What is your view? For In­dia, it is for the In­dian gov­ern­ment to opine on an In­dia-first strat­egy. ‘Make in In­dia’ and ‘Dig­i­tal In­dia’ are great ex­am­ples of things that are the state poli­cies of this coun­try. So, whether it is the lo­cal en­tre­pre­neur or the for­eign cap­i­tal that is com­ing in, both will be in ser­vice of those par­tic­u­lar set of poli­cies.

In our case, we have in­vested sig­nif­i­cantly in data centres that are help­ing In­dian en­trepreneurs and pub­lic sec­tor or­gan­i­sa­tions. There is good­ness in that. Any coun­try where for­eign cap­i­tal is only com­ing in to ex­tract rent, any pol­icy that al­lows that, is prob­a­bly not a good pol­icy. There needs to be that level of in­dus­trial pol­icy that peo­ple who gov­ern In­dia and other places are def­i­nitely think­ing through. N NARASIMHA MURTHY & AGEN­CIES You are turn­ing au­thor with your book ‘Hit Re­fresh’. What’s it about? Most times, busi­ness books at least are writ­ten af­ter one’s ten­ure. I thought may be as I’m in the job, how can I es­sen­tially write about what I would say ‘my med­i­ta­tions’ on both my story and how are we at Mi­crosoft ap­proach­ing our own re­newal. And what the world is go­ing through as a sit­ting CEO of an MNC in an ex­cit­ing time of tech­no­log­i­cal change, geopo­lit­i­cal change, and cul­tural change at Mi­crosoft. That’s sort of what I’m writ­ing about.

Lit­tle did I re­alise that it’s one thing to say you are go­ing to write it, and then you got to write it. I’m on the throes of it. So, let me fin­ish and then talk more about it. Who do you lean on for ad­vice? One of the things I’ve been lucky is to have a wide cir­cle of peo­ple who I can go to for ad­vice, who have been great men­tors. Ob­vi­ously, if it’s some­body like Bill (Gates) with whom I’ve have worked very closely for a very long time and there are very few peo­ple of that qual­ity who can think about any is­sue across tech­nol­ogy or non-tech­nol­ogy and have a long-term view on it.

But I’ve also learnt from other CEOs. Jef­frey Im­melt is an ex­am­ple. What does it mean for an MNC to op­er­ate re­spon­si­bly ev­ery­where in the world. Jef­frey Im­melt has spo­ken very elo­quently about that. And peo­ple like Reid Hoff­man, one of the founders of LinkedIn, who thinks deeply about tech­nol­ogy trends but also the so­cial im­pact of tech­nol­ogy trends.

It’s fas­ci­nat­ing to talk and learn from peo­ple like Nan­dan Nilekani, who has thought deeply hav­ing worked both in the pri­vate and the pub­lic sec­tor, on what does it mean to build plat­forms for the gov­ern­ment. This has got lot to do with the suc­cess of In­dia Stack. It’s a priv­i­lege to learn from a wide va­ri­ety of peo­ple.

How is the LinkedIn ac­qui­si­tion work­ing out? Very, very good. We closed it in De­cem­ber and I am look­ing for­ward to go­ing and vis­it­ing our LinkedIn team in Ban­ga­lore. We are very ex­cited about the over­all growth in that busi­ness. One of the things that I think about in any ac­qui­si­tion — be it Minecraft or LinkedIn — what can Mi­crosoft uniquely bring to the prop­erty. In this case, the in­te­gra­tion with Out­look/Of­fice 365 or Dy­nam­ics 365 were fairly ob­vi­ous for any pro­fes­sional.

Mi­crosoft sees one bil­lion plus pro­fes­sion­als ev­ery­day, and this is the so­cial net­work for pro­fes­sion­als in con­nect­ing the two. We are ex­cited about the in­no­va­tions ahead and what LinkedIn and LinkedIn Learn­ing can mean in skills devel­op­ment.

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