10 Powerful Examples of Microsoft CEO Satya Nadella's Transformative Vision


CLOUD WARS – Just how valuable has Satya Nadella made Microsoft in his 3-1/2 years as CEO? One way to gauge that value is that today, Microsoft's market cap of $572 billion is greater than the combined market caps of Salesforce.com (($64.5 billion), SAP ($116 billion), IBM ($146 billion), Oracle ($212 billion) and Workday ($21.4 billion).

That achievement required Nadella and Microsoft to not only compete successfully in the marketplace, but also turn the upside-down to be able to line up against the huge opportunities for the enterprise cloud, digital transformation, AI and more.

Nadella has shredded the internal org structures and product-group silos that for too long had stifled market-focused innovation and limited the speed at which the company could move.

In his prepared remarks during last week's earnings call and also in some of his replies during the Q&A session, Nadella made it unequivocally clear that while he treasures and reveres Microsoft's people and the company's proud past, he is unconditionally committed to relentlessly reimagining and reshaping the company to match the emerging opportunities unfolding in our digital economy.

And in combination with the company's dazzling financial results in the cloud, it is that commitment to ongoing and customer-centric transformation that has enabled Nadella and Microsoft to put a stranglehold on the #1 spot in my Cloud Wars Top 10 rankings.

Bob Evans

Look once more at those numbers in the opening paragraph above. Those five companies whose combined market caps add up to less than Microsoft's are among the world's most powerful and successful enterprise-tech companies: on my Cloud Wars Top 10 list, Salesforce is tied for #2 with Amazon, SAP is #4, IBM is #5, Oracle is #6, and Workday is #8.

Each has made huge and impressive strides in the cloud, yet Microsoft is outperforming all of them. Each of them has impressive sets of cloud services and technologies, yet Microsoft's is broader and deeper and more-established than any of the others.

For its fiscal year that began on July 1, Microsoft is projecting it will reach $20 billion in commercial-cloud ARR (Annual Recurring Revenue), and it is certainly possible that the company's overall revenue will top $100 billion for the fiscal year. It's more profitable than ever before, it has completed the divestiture of unsuccessful or irrelevant product lines from the Steve Ballmer era, and every sector of its far-flung business—from games to the data center—is growing.

What is so impressive about Nadella's achievements as CEO, however, is that he's achieved all of those striking financial results while also retooling the company for the future—a future that Nadella says will require constant transformation and a relentless re-imagining of how it does research, how it creates products, and how it goes to market.

In doing so, Satya Nadella has made Microsoft into that most formidable of competitors: while it can surely float like a butterfly, it can also develop products faster than ever before, put more resources in front of partners and customers, plow more investments into promising technologies, share more world-class ideas, and tie its customers vast and disparate "digital estates" together seamlessly in ways no other enterprise-tech company can come close to matching.

And Nadella does so in a style that is visionary, emboldening, insightful, and eloquent—he's a leader who fearlessly tells his troops that the way forward will be brimming with change and disruption and challenges, while also inspiring them to be not just willing but in fact eager to make that journey with him.

In that context, here are 10 of my favorite comments from Nadella from the July 20 earnings call (I've added some italics to emphasize particularly powerful phrases):

  1. Relentless Transformation Inside Microsoft: "Overall the approach we have taken for multiple years now is to transform everything that we do inside the company, whether it's about creation, how we are organized in the R&D, how we think about breaking down any silos and category definitions we may have had in the past, how we think about even marketing and the marketing approach and then, of course, even with the go to market. And this transformation is ongoing.This has been happening over multiple years, but we now have got very good customer momentum, because ultimately this is all driven by the opportunity at hand, which is much bigger than anything that we have participated in the past, so the total addressable market is much bigger. And second, our customer expectations and our partner expectations of how we show up with them has changed. And so over the years we have been making changes and now that we have a lot more momentum and critical mass we're going to that next phase and that's what you are seeing us in terms of changing the skill sets, changing the scope of how we show up to support the digital transformation needs of both large customers, as well as small businesses."
  2. A Tangible Expression of that Transformation: "The workplace is transforming — from changing employee expectations, a need for more diverse skills and globally distributed teams, and an increasingly complex threat environment. Only Microsoft gives customers a comprehensive approach for this new culture of work. Earlier this month we introduced Microsoft 365, which brings together Office 365, Windows 10 and Enterprise Mobility & Security in a complete, secure solution to empower employees, safeguard businesses and simplify IT management. Microsoft 365 is a fundamental shift in how we design, build and go-to-market to address customer needs. Fortune 500 customers Fed-Ex, Dow Chemical, Staples and Progressive Insurance all chose Microsoft 365. The success of our Secure Productive Enterprise offering with its triple-digit seat growth is one reason we are investing in Microsoft 365 for businesses of all sizes."
  3. Microsoft's End-to-End Approach: "Our technology world view of an Intelligent Cloud and an Intelligent Edge is resonating with businesses everywhere. Every customer I talk to is looking for both innovative technology to drive new growth as well as a strategic partner who can help build their own digital capability."
  4. The Business Value of AI: The core currency of any business going forward will be the ability to convert their data into AI that drives competitive advantage. It all starts with having support for the comprehensive data estate spanning Azure Database, Cosmos DB, Data Warehouse and Data Lake, combined with SQL Server. Azure Cosmos DB is the industry’s first globally distributed database service. It enables customers to securely and reliably power data-intensive applications at unprecedented scale and performance, from IoT to AI to mobile and much more. Retailer Jet.com is using Azure Cosmos DB to process trillions of transactions every day. Customers are infusing AI into their products & services using Azure AI infrastructure and services such as Bot Framework and Cognitive Services. Sabre, a leading technology provider to the global travel industry, is piloting AI-powered solutions for travel agencies to better serve customers. And Dixons Carphone is using Azure and our Cognitive Services to boost customer engagement and provide a more consistent, seamless experience across online and in their stores."
  5. "Our Sense of Purpose." "As technology disrupts every industry and has the power to make a difference in the lives of everyone, we strive to create local opportunity, growth and impact in every country around the world. Our platforms and tools help drive small business productivity, large business competitiveness and public sector efficiency. They also support new startups, improve educational and health outcomes and empower human ingenuity. Our sense of purpose lies in our customers’ success. Transformation is a continuous process of renewal and reinvestment. We will continue to invest in the highest growth opportunities, lead innovation in the cloud and AI, and bring our technology and products together into experiences and solutions that unlock new value for customers."
  6. Unifying Cloud with On-Premise. "We don't think of our servers as distinct from our cloud. In other words, this intelligent cloud and the intelligent edge is the architectural pattern for which we are building, whether it's SQL Server 2017 or it's Windows Server, the container service, everything that we do assumes the distributed computing will actually remain distributed. And it turns out that it's helpful to think about it that way, both for customers who are rationalizing their portfolios of apps that the lift-shift modernizes to what they run in their data centers, or in our data centers, but also forward-looking new workloads. If you look at some of the most exciting things that are happening in the cloud it is cloud applications that actively require an edge. Azure IoT and Azure Stack are becoming the run times of the edge, where you do need not only the ability to do compute and storage but to run the AI inference at the edge."
  7. LinkedIn + Dynamics = AI. "I’ve talked about the opportunities with Dynamics and LinkedIn. Earlier this month, we launched the Microsoft Relationship Sales solution, bringing together LinkedIn Sales Navigator and Microsoft Dynamics, as well as Dynamics 365 solutions for Retail and Talent. In a world where customers are increasingly digitizing every business process, we continue to invest in and expand our portfolio of modern, modular business applications that are infused with AI."
  8. The Power of Offering IaaS, PaaS and SaaS. "I'll just say that nothing shows up in just one quarter. We've been working on this for a long time, whether it's the product and the approach we have taken from IaaS to PaaS to SaaS, even the diversity of our SaaS offerings, and also how we think about going to market. All of these have been multiple years of hard work and clearly, there is momentum across the board, and that I think is what you're seeing. And we're excited about this quarter's execution and performance. And I think it bodes well for what we do in the future. But the key is for us to recognize that this is about sort of long-term commitment to a big opportunity and making sure that you line up your execution against that."
  9. Huge Opportunity in IoT at the Edge. "Azure IoT Edge extends cloud intelligence to edge devices. This means IoT devices can act locally, at the edge, while taking advantage of the cloud for global coordination and machine learning at scale. Azure is the first cloud to provide true hybrid support that customers predominately choose. Azure Stack extends Azure to enable developers to build and deploy applications the same way whether they run on the intelligent cloud or at the intelligent edge, so customers can meet any regulatory requirement and bring cloud applications to remote or disconnected locations like cruise ships or oil rigs."
  10. Reaching $20 Billion in Cloud Revenue. "This quarter’s cloud growth puts us squarely on track to reach the goal we set a little over two years ago, of $20 billion in commercial cloud ARR in fiscal 2018. More than ever before, customers are placing their trust in the Microsoft cloud. Azure revenue accelerated this quarter, growing 97 percent year-over-year. CIOs and Business Decision Makers increasingly prefer Azure as they make decisions about their cloud strategy. They value our hybrid consistency, developer productivity, AI capabilities, and trusted approach. And we keep investing in cloud computing to create broader economic benefit and opportunity, as we’ve done with our South Africa data center expansion, bringing Azure to 40 regions globally – more than any other cloud provider."
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