The beginnings of Microsoft Azure

Let’s start by going back a little further, maybe to the beginning of the cloud and what seems like a story of the begining.

Oh, wow.

It was…

The day you were born! [laughter]

…an awesome day in 2014.

I’m just kidding. [laughter]

It was Satya’s first CEO appearance, roughly, unveiling what I think – so I’m hoping you can share more of the story… It seems like maybe that was the beginning of what is now Microsoft’s cloud. Office was the first thing rolling out in terms of a cloud-based application to different devices, you were his co-presenter…

Oh, that day, yes.

You’re jacked, you’ve got a lot of press, as much as you did… Take us back to those days, take us back to that story, those days in the cloud.

Yeah, so that day was big, for a lot of reasons. We had already been in the cloud, but I think people kind of woke up and really realized we were serious.

The messaging started…

Yeah, I think it started sinking in… But we’d put a lot of the groundwork down, which was important, so that when people started paying attention, we were ready. But as much as anything, I think that when Satya came to the helm - and starting with that day, but it’s continued on since then - it was a real clear pivot of what mattered. The choice to at that moment launch the Office apps on iPad, which was what blew everyone’s mind…

Like, “Whaat…?!”

…it was an important thing, right, but it was just a symbol…

Yeah, crossing over…

…of “Hey, all those things you thought we’d never do - it’s gone. It’s the new norm, break all the rules.” Just shortly after that I think he stood up and had that “Microsoft loves Linux” moment - similarly, just really trying to set down clear guidelines of like “This is where we’re going. We’re gonna go where our customers are, and we wanna make them successful whatever they choose to use”, which is obviously a big shift.

[03:58] I wanna pin one thing down too, because in this keynote – I think it was Scott Guthrie’s keynote, where he said “Microsoft loves open source.” So you’ve got the Linux moment there, but I think what’s interesting is that, you know, this is the beginning of the cloud for you, but you’ve been with Microsoft for a long time, so I wanna share that story because you’ve got such a history, and you’ve seen Microsoft maybe in a day where developers didn’t – maybe open source developers, any developers had less love, or maybe there was a different… What did Julia Liuson say, how did she frame it? “A different lens” I think is what she said for the way Microsoft’s perspective was.

Yeah.

You’ve been here for a while, so that was that turning moment… How has maybe the vision/perspective of Microsoft, changed since the beginning for you? You’ve been here for a while.

I know, 17 years… It makes me wince a little bit when I say that. [laughter]

Well, 2001 was the year I got out of the military, so…

Oh, okay, so there we go, right?

Long time ago.

It was a long time ago.

So you feel it, too. [laughter] It feels like yesterday, but it wasn’t at all.

It was not yesterday.

No, no. Well, back when I started 17 years ago I remember we had the anti-Linux campaign. It was one of the big – I remember the guy leading it, and it was like “Linux is free like a puppy”, all those crazy campaigns. And it’s so funny now, I remember I did the Red Hat keynote three years ago now, and I remember thinking “God, that’s different.” Like, “Here I am, talking about our great partnership” and “This is amazing!” and “We love Linux!”, and 17 years from now it was a very different thing… Just a big shift.

I think there was always energy there, but it was just a strong mantra of like, ya know, “Windows or bust. Windows or bust.”, and now we recognize that’s just not reality, and we don’t need to do that. We wanna be wherever our customers are.

Do you have any insight into the “Windows or bust” mentality now? Like, what the perspective is on Windows in comparison to, say, “The world is a computer.” Windows is a part of that “World is a computer”, but not THE computer. It seems like Azure, which you run, is the computer.

It’s the open platform. You can run anything you want on it. You can use whatever tools, whatever language or database… So it’s a very different – yeah, we still have a point of view, like, gosh, we think Azure is very differentiated, this growing computer for the world, but it runs anything, everything, it welcomes all developers, versus having an operating system or a toolkit perspective on top of it.

The reason why I ask these questions is because I feel like our audience, very “any developer”, very open source focused… We pretty much cover open source - the languages, the technologies, the people - and I feel like maybe they need to kind of keep getting reminded that Microsoft is changing, and someone like you can help them evolve their perspective of Microsoft.

Yeah, you know, I always talk about “Perception lags reality by 3-5 years”, and I think we’re in that place with the open source community, where what we’re doing is actually… I mean, this ironic moment - we were working with GitHub recently and looked at the contributions on what Microsoft’s doing, and it exceeds all these other companies that are know at their core to be –

Did you try that? Was that purposeful?

We tried what?

The contributions to GitHub…

To get that stat, like “We’re gonna be the number one!”

We didn’t. We didn’t say “Hey, we’re gonna be number one!” We really didn’t. I mean, to me, it’s one of those moments where you’re like “Well, it’s not something we’re faking, or trying to make it in. It just happened. It literally just happened. In terms of hey everyone (thousands of developers), go forth and do what makes you successful internally”, and this is where we got to in terms of the contributions. It’s amazing – to me, that’s like a true indicator of change. Satya set out to do it a few years back, and it actually happened, when you see that kind of stat.

One of the things that I’ve been thinking about with regards to Microsoft’s (we’ll just call it) success in open source is that open source, the mindset - and it’s an idealistic mindset that we realized doesn’t exist in reality, but there’s this meritocracy to it, where it’s like “May the best code win” or “Let the cream rise to the top”, and on our best days you can’t market, or you can’t shove, or you can’t do anything except for like show up with your software, to get the respect that people earn through open source efforts.

Right.

[08:14] And it seems like - specifically with VS Code, but there’s many other efforts as well… It’s like, maybe the 3-5 year lag is because you guys have been earning it through shipping awesome open source software that has really contributed so much to the whole ecosystem. It’s like “Wow.” What’s kind of cool is like even Microsoft has to earn it, and then you guys have.

Totally. People are like, “I don’t understand this community and how it works”, and I always start with exactly your point of “It’s absolutely earned. You can’t buy your way into it, you can’t relationship your way in…” You just earn it, which I love; at some level it’s just so true, and authentic… But yeah, it is absolutely earned. And it takes time. It’s taken a long time, but that’s okay… We’re in, we’re doing this thing. We’re committed.

I mean what I love absolutely is of course we look at other clouds out there, and I actually think we’re in a weird, crazy and ironic way being more open source friendly than the alternatives… Which is like “How did we become the best in class?” [laughs] …someone who’s been around this long; it’s interesting. But I love it, I’m like “Let’s go forward and just blow everyone’s minds.”

Anything unexpected coming up for open source? Like, anything that’s Windows, or anything that’s like– [laughter]

Someone asked me yesterday “When are you open sourcing Windows?”

That’s gonna be [unintelligible 00:09:29.29]

Let’s see… I mean, I think we are considering things that might surprise you. I don’t know exactly when and how they’ll come to light, but I think… I mean, honestly, everything’s on the table - what’s right for the future of the company, and… And again, Azure brings a different perspective to everything, of like what helps Azure grow, and what we need to use for that.

Let’s go back to the beginning of Azure a little bit, and that any platform, anything runs on Azure; old Microsoft would be Windows, right? Windows runs on Azure, and it’s gonna be Windows…

Yup.

Was that decision hotly debated? What was the conversation around “Are we gonna go this way or that?” Because that was really like a fork in the road for you guys.

It was. I mean, we started – it was called Windows Azure when we launched it, if you remember…

I do not remember that, but that makes a lot of sense.

Yeah, when we first launched it, it was called Windows Azure, and then it was – I can’t remember how many years later, under Satya, that it became Microsoft Azure, and we welcomed all.

Interestingly though, in the pivot of like “How much do we support Linux? What does it look like? How serious are we?” - it was one of those things where there was a little bit of pressure, a little bit of pressure, but then as soon as Satya came forward, it was like “Of course!” It was just this fast, absolute decision to move forward. And now actually Azure is half Linux, half Windows [unintelligible 00:10:43.28] the VM is running. So it’s perfectly even.

What’s perspective along Satya’s maybe earning it, too? Like, new CEO, new direction - how did he set the tone, how did he gain trust from the rest of Microsoft to move in those directions? Was it easy for him? What are some clear things he’s done that helped enable this new Microsoft?

You mean from an internal perspective?

Anything you can share, your perspective. You’ve been a co-presenter with him, you’ve been here for a very long time, corporate vice-president…

I made him improve his style. I want to make sure I get some points for that.

Well, the jacket… Did you end up getting a Twitter handle for the jacket?

We never did launch a Twitter handle for the jacket.

What does that jacket mean?

Yeah, tell them about the jacket.

Yeah, the jacket… So it was Satya’s first press appearance after becoming CEO, and I was his co-presenter, and I wore this leather jacket that I didn’t think was a big deal; it was just a leather jacket, like many of my leather jackets… And the internet blew up over this thing.

Because… It was so stylish?

She looked cool!

Because they loved it. They thought it was awesome.

Okay.

Apparently, it was awesome.

It was awesome.

I know, I had no idea it was –

This could be like the best purchase ever. I did not think that you will buy a nice jacket.

Right?! Someone was like “You need to put that thing in the Microsoft museum. You made Microsoft history with your jacket!” So literally for like two years after that wonderful presentation, everyone’s like “I don’t know who you are, but I know you’ve got a good jacket! I know you and your jacket.”

[12:03] I know you’re trying to – oh, there it is…

Oh, he is pulling it up, so you can see it.

I’m now seeing a picture of that.

Yeah. See, and ever since then, every keynote, people are like “Well, I’ve gotta look good, I’ve gotta look cool. There’s this new bar.” I even had our CFO, Amy Hood, who was not known for dressing up - she dressed like a 16-year old coder for most days, and she did a presentation, and she was like “I was getting ready in the morning, and I just thought What would Julia wear? What would Julia wear? That’s what I’ve gotta do…” [laughter]

I feel like maybe I should start asking myself that, because… I could use some help over here.

Yeah, the jacket is super cool. We’ll include a link in the show notes for anybody chomping at the bit to wanna see this, but…

That is a cool jacket.

A very cool jacket. I could see why. So you helped him get a better style.

Yeah, I take credit for a little bit of image improvement of the company, with that moment, and then raising the bar in all of the executives to look a little better. [laughter] So… Keeping at it.

Playing your part.

So aside from style, how did Satya change the direction for the company? What are some milestones for him that you can see that he’s done that earned trust internally, as a company?

I think nothing of this size of change happens overnight. Honestly, I think some of his magic in driving the change is just being super consistent, day in, day out. As a new conversation rises, like “Oh, should we do this, or should we do this? Should we open source, should we not? Should we contribute back or not?” Yes, lots and lots of decisions every day, very consistent on the execution. And Scott Guthrie too, it’s not just Satya.

Sure, of course. It’s a team.

Yeah, it takes a whole lot of us.

Why I asked that is because you had a different direction under the previous management, let’s just say… And not naming names, we all know them, but you know, it’s a bit shift, it’s a new Microsoft, and everybody keeps saying that. I think we’ve had conversations with different executives, different vice-presidents at Microsoft, and we keep kind of wheeling back to “Where did it begin?” and “How did it happen?” And that’s kind of where we’re getting at.

Got it. I mean, it sounds so simple, but it begins with starting with what makes our customers successful. And if you start from that point of view, versus starting with the point of view of like “Hey, here’s my agenda, and I’m gonna shove it on our customers…” Versus “Hey, what is our customers’ agenda and how do we fulfill that?” It seems really simple, but it actually just comes down to that, of like “Hey, we wanna make sure our customers are super successful. Let’s make sure we work that direction, versus the other way.”

Do you remember the first conversations around open source?

Well, an interesting thing, just from where I was - I was in the Office 365 team for like eight years, and then it was three years I moved over to Azure, so we’d already pivoted on the Azure side to embracing open source fully by the time I arrived into the Azure side of things. So in my Office life, all those conversations were “Do we support Android? Do we support iOS? How do we do that?” So that was why the Office on iPad was so pivotal for that moment… But I think it’s less about being open source, but about being cross-platform.

Sure.

It was super symbolic of “This is a new direction.” Then when I came over to Azure - we’d made the decision, we had been embracing it, we were supporting it, and I worked on this partnership with Red Hat… But we’d go out into the world and people had no idea that we were doing it, or if they had heard about us doing anything open source, they were super skeptical, and they assumed it was because of the “Embrace and extinguish.” I got told that a lot. “You’re really just gonna embrace and extinguish, I understand.”

So the conspiracy theory - so high… Which is fine, I understand. You have to earn your way out of that, which I think we have. So getting more serious… And then just kind of executing it consistently.

I never wanna keep bringing you back to the fire, so to speak, to keep saying how you earned it, but…

But I’m about to.

“Now I want something more specific.”

I’m gonna just go back to explaining why, just so – you know, our audience is very developer, very open source, very indie, and I think there’s just been this… As Julia said, this different lens, this different perspective of Microsoft that is changing, and I wanna give them a reason to see why they can begin to evolve that perspective.

[15:58] What makes it credible?

Yeah. Well, I don’t want you to keep going on about it… I’m just explaining our perspective, why we’re asking these questions.

It’s helpful to understand the lens of people listening to this, and what are they looking for. In a business sense, Azure is not gonna be successful unless we’re super successful with open source. My CFO cares, because Azure can’t grow if we’re only a Windows platform. That is a very limited growth. We can have a much, much bigger growth opportunity, so just dollars and cents-wise, we have to do it. We need to do it, we want to do it, on that front.

And then the other thing – we’re so developer-oriented internally; we’re super dev culture, and they’re out there like “I wanna build fast, I wanna build efficient, I wanna contribute…” Gosh, open source is a super efficient way to do that, and it just happened. When you said “Go for it, use whatever you want. Innovate however you want”, it just happened, because the developers went there, and saw the efficiency of it and how useful it was to use all this different open source code and bring it into our products.

In my perspective, Microsoft has for a very long time - I would say “always”, but I don’t know the entire history of the company… But it has for a very long time been developer-centric, but it was always the developers on the Windows platform. So there’s like this huge swathe of developers outside of the sphere, and so there was no developer-centric for them. But now, because of this shift to services, with Azure at the forefront of that, well now it’s everywhere, all developers.

Right, that’s the thing - we used to be about our Windows platform, and getting developer engagement on our Windows platform; we had a very specific point of view, kind of to Julia Liuson’s point of view - it was a lens about Windows developers and how we get them. And then when suddenly you say “Hey, it’s not about a Windows platform, it’s about this Azure cloud platform”, then you’re like “Oh.” All the rules change. You’re like, “Oh, okay. I can think about things completely differently.” So yeah, it is the same developer centricity, but a totally different business lens.

A completely different business model, which allows that, and it’s interesting just the broad sweeping implications of that primary – I mean, it’s a big decision, but away from Windows platform and towards cloud platform or Azure… It just completely changes the opportunities for the business decision-making. Everything is a whole new ball game.

Let’s talk about Azure…

Yes, near and dear to my heart.

Yeah, near and dear to your heart. You know your competition better than we do; there’s lots of big players in this space…

Sure.

How does Azure stack up, and what – you said it’s differentiated. Give us some of the highlights of why Azure is differentiated.

I love that. I’ve never gotten that question before, just so you’re clear… [laughter]

Really? [laughter]

I’ve never thought about that.

[unintelligible 00:19:43.29] [laughter] “I wasn’t ready for the differentiation question…”

“Hang on, what do you mean!? There’s someone else out there?!”

“Whaat?!”

I have to say, being the number two cloud in the world, it keeps you on your toes. It’s kind of a fun place. I was in Office for all these years where we had this number one position…

The incumbent, yeah.

[20:02] Yeah, right? And it’s all about protecting the franchise, and… It was so fun to switch over to Azure, where you’re like “Oh no, we’ve gotta go, baby!” So how are we differentiated - actually, the core of it goes back to that developer experience. We spent some time, like “What’s the soul of Azure and the company?” Satya made us all spend the time, like “What’s the soul of Microsoft? Why do we exist?”, in his very interesting and philosophical approach to problems… And we did the same thing on Azure, like “What’s our soul? What do we wanna stand for?”

The thing we came back to is the developer being productive, and having that incredible developer productivity experience is part of our cloud. It’s just a developer platform, it’s what it is, so that’s our core - how do we do that differently? There’s tech - fine, we’ll just support all the same tech everyone else does, and other things, but HOW we do it.

One of the things I talk about is around serverless; event-driven came out… So AWS launched Lambda. Innovative, new, but they didn’t put a lot of support around it; you had to kind of figure it out… On the forums people were like “This is kind of complicated. I don’t get it yet.” And then when we brought out Functions, it had the whole VS toolkit ready, with SDKs, we had support and docs around it, so that you can just get going… And it’s a subtle thing, but to me it’s a good example of how we think about what we want. Every developer, whether you’ve never heard of serverless in your whole life, or whether you’re the master at it… we want you to be great at this. We wanna make sure you can be incredibly productive with building whatever you wanna build.

So as we think about the technology and how we support that delivery of it, it’s much about how we wanna be different and more helpful, frankly. And then also, there’s a little bit of – you know, Microsoft has always been great at saying “We want everyone to be on this. We wanna make it something that everyone has access to, and not have any judgment. And I look at some of the competitors and I see there’s a little bit of judgment; like, if you’re not like the leading edge developer and you don’t totally get cloud, there’s a little bit of like “Hm…”

Which is intimidating, right?

Yeah, there’s a little bit of like, “I guess you don’t get it…” And like, I don’t judge; we welcome all. I want everybody to be successful. I don’t want any kind of like “I guess you don’t get it. Too bad for you.” I don’t know, I just think that edge doesn’t work, so that’s how I wanna…

It’s interesting you got there by doing a little soul searching.

Yeah.

We’re big fans of retrospectives, big fans of iteration… In the case of Microsoft, you’ve been around long enough to re-examine who you are…

For sure.

…and even at one single service level to understand what’s the direction, because you can’t get everybody on board of a plan unless you understand who you are and what you’re gonna do, right?

Yes.

Can you maybe share a bit more about that retrospective aspect, going into who was involved, how did you get there, and what were some thoughts that came from that?

Yeah, it was a really important time, because AWS has started so many years before us; we came in second place in the delivery order (I call it)… We really had to say – we can’t just chase the leader; that strategy is the most flawed strategy you can find, right? No one wants the same technology from–

[unintelligible 00:23:01.17]

Right, no one wants that. So we had to do some just core matching the tech; so there was work to be done just to make sure we had equivalent technology from the VMs, networking storage, that kind of thing. But then we just stopped and really – and it was the entire leadership team, and it was a pretty long process, because it had to be true and authentic, because people had to buy into it. We kind of like had to earn our own stuff internally, to get everyone on board…
And we started with just what’s going on in the industry broadly, what are the topics from a trend and a technology perspective… But then it really got into these in-depth, long, over dinner sessions with customers, and we’d wallow with them… And you’d start with tech, and then you’d stop, and you start more talking about like “What about you? What do you want as a human?” Really getting on this other level of conversation with developers, with IT admins, with business decision-makers, and the thing we kept hearing was “This is a little scary and a little overwhelming.”

[24:00] After you got past the idea of like “This is awesome! There’s so much cool tech! It’s super great! I can’t wait to do event-driven! Containers are awesome!” and then they’d be like “And I think it’s a lot of work, and I don’t know which one I should be using, and everyone thinks I should know, and I don’t know, and I’m kind of scared by that.”

I remember a couple guys, they would pause and they were kind of like “I just have impostor syndrome all the time. That’s how it feels.” To me, those were gems of like, okay, there’s tech and all this stuff, but then there’s this truth, and this quiet place inside, of like “What are you gonna do about that?” So that’s what we grabbed on to… Like, “Hey, we can understand that, we can empathize with that in a way that I think other companies who are newer and haven’t been through the journey that we’ve been, and the humble self-reevaluation that we went through as a company, that gives you a new perspective on the world, versus the hubris of never making mistakes…” So I think it allowed us to hear that in a different way, so that’s where we started re-centering.

Then we had this conversation like “That’s the history of our company. That’s been true of our DNA since the beginning of time”, and one of the engineering leaders that works for Scott starts saying “Let’s help our customers fall into the pit of success. How do we find that in like this Pit of Success idea?” Anyway, so it was long – you know, we iterated, iterated, where it really started to get to the point where we’d talk to anyone across the team and you’d just see them get it, and they were like “Yeah! That’s what we are! That’s how we’re different! That’s what we stand for! That’s how we’re gonna change the world!” and it started to emotionally hook them. You kind of see it.

So that culmination over it, like the whole course of the time - it was probably nine months of really iterating, spending time thinking like is that quite right, not quite right, move forward, and kind of picking our spot.

To give you a little credit to your nearest competitor, they’d never shipped boxed software… So you kind of was born in the idea of you have to get it right, because if not it’s a recall.

That’s true, yeah.

We talked to Julia Liuson about the idea of like – what was it, recall bugs I believe is what it was… [unintelligible 00:25:56.17]

Yeah, recall class bug.

…recall class bugs, where you have to ship software to a store, in a box, and somebody buys it, buys a license of it… It’s a different world; Amazon never had to do that with AWS. There was never a box software mentality for them, so to have to reevaluate how you what you do–

They were pretty good at shipping boxes, though… [laughter]

Yes… But different kind of boxes. [laughter]

A whole different kind of box.

Yeah, a whole different kind of box.

Yeah, we remember those days of recall class bugs…

So you had to change your perspective, because you had a different DNA then, and to evolve into the new cloud-based world, everything is a computer – or the world is a computer… You had to evolve.

Absolutely. Actually, the real cloud story at Microsoft didn’t actually start with Azure, it actually started back with our Exchange Server, our email server, and it was actually Ray Ozzie, a million years ago… We happened to run an exchange server business back then, and he came into the company – I remember he would come along and sit with us, and he’d be like “I don’t know what’s going on at Microsoft here. I feel like this world is happening, and time has stood still here.”

I remember Terry Myerson actually was the engineering leader of Exchange back then, and I was leading the business side… And Ray would just say these things that were like “Oh my god, it cannot be true…” Like, this world has gone somewhere and we are being left behind. Terry would be like, “What are we gonna do about this…?”

Finally, Terry Myerson - I give him tons of credit… He was like “We’re going to cloud. We’re putting this stuff on the cloud, we’re doing it”, and everyone thought he was crazy… They literally thought he was crazy, so he actually did it in secret.

He did this thing called Exchange Labs, where he launched it as an education program for universities, as an excuse to be able to ship things in the cloud, that wasn’t gonna affect businesses, so he stayed out of the line of fire from the sales team and other things… So we started to kind of secretly out of the back closet creating this cloud service for our email system, under Exchange Labs.

[28:05] It was this crazy and insane story, and Ray Ozzie, every time someone would light up at the company and be like “What is this thing!?”, Ray Ozzie would protect it and shut him down… We were always running to Ray, like “Ray, help…!” And that’s how it started, so many years ago. I can’t even – I wanna say 10-12 years ago… A long time ago, when we put the first thing in the cloud.

I remember they came to me and they were like “How are we gonna do customer support on services? How are we gonna make money in subscriptions?” and I was like “I’ve got no idea, I’ll go figure that out… Hold on, I’ll just go figure that out.” Anyway, but we did it, and then that became over time Exchange Online, and then over time from there it became Office 365, and then right about that time was when the original Windows Azure launched… But that was our first shove into commercial cloud, it was over this interesting Ray Ozzie-sponsored side-project.

Where do you think Microsoft would be if you didn’t have Azure or the cloud direction, if you didn’t change direction? If you didn’t agree that you were stuck in time and everybody else was moving forward, so to speak - where do you think Microsoft would be if you didn’t do what you’ve done?

We’d be in a bad place. We’d be in a bad place…

I agree, yeah.

These cloud services is where the world is going, it’s unquestionable – and because it’s a better model. There’s so much truth to it. I wanna make clear when I say that - we have a clear worldview about the cloud in Edge; we talk about hybrid cloud - intelligent cloud/intelligent edge is another flavor of that, essentially, where the edge is not just your data center, your edge is this distributed thing. So when I say the world is going to a cloud model, that means the approach, not necessarily every piece of code will sit on the public cloud.

Right. It’s involved, yeah.

Yeah, but it is the center of this whole thing. So we would be in a really bad place, and it would be true for the Office franchise, as well as what we’re doing on the Azure side of things, so… Absolutely essential. We would be in a sad, sad, sad decline.

Not number three in the world.

No. No, no. That was essential. Actually, we’re doing a video for Terry Myerson’s farewell, and I was thinking, “You shoved us, kicking and screaming, into public cloud. You had the cojones to do that, where a lot of us didn’t.”

You’re a corporate vice-president at Microsoft, which is one of the largest companies in the world… We’re a budding media company. You’re effectively looking at our company. There’s more than just us…

It’s impressive, it’s impressive. [laughs]

[31:49] …so I suspect we live very different lives. I’m thinking about your work life, what it means to be corporate vice-president, and I was just thinking you have to have worlds of insight into leadership, into getting things done, pushing the ball forward… Can you share with us stuff that you’ve learned through the years about how to inspire people to do what they’re doing and how to push the ball forward at Microsoft?

We’ve all got an opinion, so I’m happy to give you mine, from the wisdom that I’ve gleaned over these years… First of all, as a leader I think authenticity is so core to everything, and I think other human beings smell bull***t (can I say that?). I have a bit of potty mouth so I’ve gotta check myself. No, but human beings smell that; if you don’t feel like that leader is being authentic and true to you, and brave, even though they don’t know all the answers, people waver… So I think that’s so, so important, staying super authentic to who you are and what you believe, and getting people to follow you and wanna work with you and be with you and take these crazy risks with you… So that’s super essential.

I think as a leader in tech particularly, you constantly have to be questioning everything you’ve done. Just because it worked last year doesn’t mean it’s gonna work next year… And that uncomfortable push of changing all the time. You know, human beings don’t love change; it’s caused us to survive all these years, being risk-averse… But that absolutely destroys you in technology, so having the willingness to be like “I know we did everything like that last year, but we’re gonna change it all next year.” Everyone’s like, “Ugh…!”, and there’s so much resistance in the system…

I remind myself constantly as a leader, like “Hey, a lot of resistance and a lot of pushback doesn’t mean you’re wrong. It just means you’re driving change, and change is hard, and there’s uncomfort to that, with all the people around you.” So being bold and courageous in those moments of heightened resistance is still super important.

I talk to teams on things like “Change doesn’t feel good, but it doesn’t mean it’s wrong. You have to separate the discomfort and being wrong, and realize those are different things… So don’t take that signal.” A lot of times I’m like, “Hey, we’ve gotta drive this change, we’ve gotta move forward” and people are like “Everyone’s upset about it”, and I’m like “And you’ve still gotta go do it…! It doesn’t matter.” [laughter] There’s good ways to do it and bad, but just know that that is the truth… And I think it took me a while earlier in my career, like “Oh, there’s a lot of resistance… I must be wrong”, and actually, no, it’s the opposite often times.

How can you detect that? Is it always in retrospect? How do you know when the resistance is because we’re wrong, versus the resistance is because there’s change?

Because you quickly become tone deaf if you’re like “I’m always right, everyone’s always wrong!” and I just jam my ideas on them.

Exactly, exactly!

So I think that combined with really truly listening… And listening with empathy, not just listening for what I wanna hear. Most people listen for what they want, and they remember that part…

Yeah, or just waiting for their chance to talk.

Yeah, or that. But Satya spent a lot of time on empathy, which to me has been so essential in my career… Really, really understanding – when someone’s saying “I hate your idea… Let me tell you why. I think you’re totally wrong” and I’m like “Okay, I really wanna know.”

It’s time to listen, yeah.

Like, “I don’t wanna be wrong… Please, that’s a gift. If you think I’m wrong, I wanna know why.”

Welcome criticism.

Yeah, and listen… Really listen, and I really try and understand where they’re coming from, and their condition of being, so I can say “You know what, from where you sit and the pressures you’re under, and what motivates you and what people are expecting of you, your perspective makes a ton of sense. Now I really understand what your point of view is and I understand why you don’t like what I’m doing.” Then I can evaluate and say “Hey, there’s real truth in there, that I have to listen to” or like “Gosh, that is a condition of being that would of course make you resistant to this. I get it. I get it.”

Or is there other people that feel the same way? Is it systemic, across the team?

Right, right.

Do we need to pause and change on thing before we change several things?

Yeah, because sometimes your idea around how you’re doing it is bad, right?

Right, sometimes you need a minor course correction, but sometimes you need a change of directions, right?

Or even expectations…

Yes.

Clarity, expectation - those are things that often lead people in… You know, lack of clarity. Sometimes you need to circle back and “Here’s the mission, here’s why we’re doing it. This is why it makes sense. I understand the circumstances, but this is the way we should move forward, and for these reasons.”

Yeah, yeah. You know, we’ve done a bunch of research at Microsoft around decision-making, human condition, emotion, reaction, and actually we had a bunch of PhD’s in brain sciences to help our leadership team in general get better…

[36:17] Is that right? Awesome.

It’s been fascinating.

You have a team of PhD’s available to you to make decisions…

[laughs]

You know, it’s nice…

Why not, right?

I love that.

There’s a few upsides in being with a big company like ours, and that’s one of them.

Can we borrow some of them?

And the leadership principles that have been laid out - they’re so beautiful and they’re so simple and they’re so true… They are clarity - which you just spent time talking about - and energy, and business results. Those three things. Everything you do as a leader kind of comes down to that - can you create clarity about where you’re going, why you’re doing it, what’s the purpose? Make people really understand it. Creating energy, meaning people wanna follow you, that people are in, they’re putting their whole selves in this…

Enthusiasm, yeah.

They’re with you, you’re getting rid of the resistance… And then delivering the results, which then of course gives you the reward of like “Hey, let’s do more of that.” Every day, literally, I come to work and I’m like “Alright - clarity, energy, results. Clarity, energy, results.” It’s so simple, yet it’s so incredibly effective.

I like that, Jerod. A lot. Clarity, energy, results.

I like that, too.

See? And you can remember it, too. It breaks it all down. Because there’s like 65 wheels of leadership, blah-blah-blah; I can’t remember that crap.

“Give me three!”

Totally!

I can operate on three.

Yeah, and if you can do a lot of other things, great, but those three are essential.

It’s interesting, we’ve spoken with you, we’ve spoken with Corey Sanders, and we also spoke with Steve Guggenheimer, upper leadership positions, and I can’t speak to the results, but across all three of you what I’ve experienced in listening and just conversing with you is clarity for sure, energy is like the number one thing – you know, there’s a lean in, there’s an excitement to all three of your guys’ responses to these questions.

Definitely!

So it manifests itself…

But of the three, I’m really the best…

Yes, of course. [laughs]

Sure. Corey, you hear that? [laughter]

On the playback. Listen, Corey.

And he’s got the worst jokes; he wins there, but you know…

If you can win for being the worst, I guess… [laughs]

What’s a day like in your day?

Never the same, I would say. Where I spend my energy is essentially making sure that people have the right direction, and then I’m getting obstacles out of their way. Like, “This is where we’ve gotta go. What do we need to get it done?” And some days that I can sit down and write something or build something… But it’s about making sure that the direction we have set is moving forward smoothly, whether that’s reviewing something, or approving something, or authorizing something, or giving feedback, or tackling a blocker… That’s kind of how I spend my time.

That’s fun, right? Tackling blockers…

It’s not bad, it’s not bad… [laughs]

Sometimes that hurts… Sometimes it feels good…

You know, I was like “Sometimes I think I’m gonna get a glutton for punishment”, but you know, it’s how it works…

Can you give an example of maybe what a blocker might be and how you tackle it? Maybe a recent, fun one for you…

Let me think of a good one…

And how maybe it was strategic in leadership.

You know, it’s super recent, so let me pick it, because it’s super recent and on top of mind… So we announced here Project Kinect for Azure, basically bringing the technology that was in the Kinect Sensor that we launched with Xbox, and into the Hololens and now essentially connected it with Azure AI services to create a new, very intelligent edge with this incredible depth sensor. So we made the decision, we’re gonna announce this, we’re gonna do this thing, and we’re gonna be part of the Azure family. Previously it was over in the Xbox team, and from the Xbox perspective they had sunsetted the product…

Right.

So there was this interesting thing of like those of us from the Azure side were like “Oh, it makes perfect sense. The intelligent edge is coming to fore, the IoT - there’s so much incredible opportunity with this world-leading tech…”

There’s a lot of technology sitting in that thing, right?

[40:03] Yeah, like unbelievable, right? But then, if you were from the Xbox team, you just made the decision to end-of-life this thing, and now you’re onto different pastures, and we work with people to move on. So there was this incredible resistance to this idea of how we do this, and why, and when, and was it gonna feel like we’re just bringing something back, and all these things… So we really had to a) provide clarity of like “What is this about?” and “What you believed this tech was for before - it’s about a whole new thing.” Yes, it’s the same tech, but a totally new use case, and a different approach, and a different way… So just getting everyone, kind of top-down, when everyone came up like “Oh my god, this is ridiculous, this is crazy!” Like, no, no, let me explain why it’s not… I spent some time making sure they understand the vision for the future.

And then also really listen to – like, I didn’t know the history, so I had to be like “What was this? Tell me. I don’t wanna do the same things again. I don’t wanna step into a big doo-doo.”

To know the history so as to not make the same mistakes. They repeat themselves.

Right.

And be sensitive to what history was, and make sure that when we talk about this thing, that people get it, and they don’t be like “Oh, this is the same thing!”

Stomping on toes, and stuff like that… You don’t wanna do that.

Yeah. So it was an area where I kind of dropped in with not a lot of information, but like the “Go get it done” kind of thing… So it was this intense moment of understanding, listening, driving, and making sure I was really hearing signal from noise, and like “That didn’t matter, that does matter, that’s relevant, that’s not relevant… Go.” So as an example…

So what does the future look like for that? …for the Kinect on – as an edge device, or as the way you’re thinking about it now.

Yeah, I can’t wait… I think it’s amazing. Like, literally, the camera can be still and you can render like a 3D understanding of an object. If I think about – whether it be retail, or healthcare, or manufacturing… So many different scenarios where suddenly what was just a camera, suddenly they’re looking for a movement, they can suddenly actually see something completely different, and help people do more efficiently… Especially in healthcare, there’s a lot of opportunities there.

I mean, we’re just early on this one, but wiring it up with our AI services, you’re like “Man, this could be a game-changer.”

So are you gonna sell it as an individual product, or are you gonna integrate this technology into new products?

We’re actually looking at all options at this point. We have great tech, and we wanna get developers’ hands on it, and work with it… I mean, again, a little bit of like, you know, new Microsoft culture… Like, “Let’s start, let’s put an idea out there. Let’s try it, and let’s see what unfolds”, in terms of –

And this is part of the open source announcement too, the IoT runtime.

So we open sourced our IoT Edge runtime, so people can take that and put it on all different kinds of devices, including this new Project Kinect for Azure… It’s gonna be one of the places. But then what we can do with this incredible depth sensor that we have, in addition to those IoT and AI services - it just gives a new technology to the stack.

So we served you the softball on the differentiation question… Are there any other questions that we didn’t ask that you’ve just been waiting for? You’re like “I can’t wait till they ask me about this, so I can answer that…” What didn’t we ask you?

I actually expected you to ask more about this intelligent edge, and hybrid, and in that area… I don’t know if that’s as relevant – it’s more about build, and I don’t know if that is relevant to your audience, though.

Go ahead and tell us about it, I mean…

You’re like, “We’ll find out…” Satya is a brilliant man, for real. Like, the real deal. And he has these ideas that are so deep and so long-term that sometimes people are like “I don’t know what he said.” [laughter]

“Let’s just follow him anyways…”

I’m sure it’s right, but… But you know, the worldview that he’s created, of intelligent cloud, intelligent edge, and he spent some time on this keynote talking about intelligent cloud, intelligent edge, and I’ve gotten a lot of questions like “Okay, so is that IoT? Does that mean hybrid? What exactly is that thing that he’s talking about?” So I tried to break it down for folks… It literally is his point of view and a shared point of view that every application type that we build moving forward will be this combination of the technology that is the public cloud, and the technology like compute and data sitting on these edge nodes; and the edge nodes, if you think about it today, the biggest edge nodes are these giant data centers, or technologies running, and they’re using the cloud, and most people call that hybrid.

[44:12] But that data center is gonna evolve into a huge set of distributed connected devices, from cars to tiny little sensors in refrigerators and thermostats and that type of thing, and each one of those will hold application code, and will be running local processing, local compute and AI and make meaningful things, not just dumb sensors that ping back to the cloud, and just ping on a regular basis.

So the edge is gonna become maybe just as powerful as a data center, but a far more distributed technology set… So how do we think about it as a developer, how do you think about “Okay, my world is gonna look like that, and every application is gonna have a cloud and edge component to it. How do I start thinking about that?” And the most obvious way that happens today is IoT. So we bring it right back to like “Okay, is IoT, is this a use case people can kind of get their head around today, right now, and understand it?” But I do believe that IoT and edge will converge over time into this – just an example of what this intelligent edge looks like.

I thought we crossed this chasm of like application developers, web developers, to now not just delivering an application to, say, the web, and an application on a phone, or something like that… To now think like “Well, my device could actually include a drone, or a refrigerator, or the washing machine, or just various interesting things that may end up on somebody’s plate. That’s an interesting web developer to, say, a world developer.

Yeah, I like the way you put it.

Oh, a world developer… So I think I understand intelligent edge a little better now that you’ve explained it, because I’m likening it to kind of the move away from mainframes with dumb terminals, to more of a – still a client-server model in the traditional sense, but now you have the fit clients, right? So the idea is our edge points - that button in your house, or that thing in your fridge is not going to be a sensor that’s just sending data, which is what they’ve kind of been so far…

Yes, they’ve been dumb edges. Small and largely disconnected and not dumb edge.

Right. So now the idea is like “Now let’s actually move - similarly with fit client architecture - that intelligence into the edge.” Of course, still the cloud is where the bulk of the work will be – or maybe the source of truth is, but there’s lots we can in these devices; of course, smartphones is the number one example of like a very fit client, a very smart edge.

Yes, absolutely.

That’s interesting. I didn’t put that together…

See? It clicked.

I was like, the word “intelligent edge”, I was just like “It’s kind of just a buzz word”, until now it makes sense.

Yeah, that makes sense.

Well, there’s two things that are happening right now… What’s sitting on the edge, when it is even connected, is kind of dumb. It’s like “It’s hot. It’s cold. It’s hot. It’s cold. It’s off. It’s on.” That’s the amount of information being processed there and being connected with the cloud. But the potential there is gonna blow up fast in terms of what’s possible and what we can run there.

They showed a computer vision model running on that Raspberry Pi device - super simple example, but there’s a lot more you can do.

[47:15] Well, demos have to be somewhat simple to not fail in real time, right? [laughter]

It helps, too…

Right, that helps. And also approachable…

Yeah, we really tried to put it in examples people could kind of get their head around… Because it is a different way to think about the world, so you have to – you know, like, “Let me show you some ways we think about it”, to kind of bring people along.

Yeah. Well, Julia, thank you so much. I know we’ve got a hard stop here soon, so… It was a pleasure talking to you.

You guys as well!

Thank you for sharing the back-stories… I personally love hearing those. I like to have the opportunity to talk to someone like you, to lean back to this issue… Like, Microsoft is a big part of my entire life, and so to kind of like even retrospect it back into my life, and see where this company is now, where it was then, and the process you took to get there.

Yeah. It’s pretty amazing, but I love the – in any maturation there’s a lot of humble pie you eat along the way… But it makes you better, and I kind of love that about Microsoft. And I see other companies that are younger and they have a lot more hubris still, and I think “They’re gonna figure it out…” But we have this unique wisdom that I feel fortunate to be part of.