In a freewheeling exclusive interview with CNBC-TV18‘s Shereen Bhan, Microsoft CEO Satya Nadella talked about a number of issues, including cloud and artificial intelligence technologies and outlined his views on US President Donald Trump‘s controversial immigration policies and how he sees Microsoft‘s future.
The rapid advancements taking place in the technology sector offer the potential to not only help companies boost productivity and improve margins, they can also take governance systems to a new level and help change lives, according to Microsoft CEO Satya Nadella.
In a freewheeling exclusive interview with CNBC-TV18’s Shereen Bhan, Nadella who is India for a visit, talked about a number of issues, including cloud and artificial intelligence technologies and outlined his views on US President Donald Trump’s controversial immigration policies and how he sees Microsoft’s future.
“We are thrilled about bringing cloud and world class AI technologies to India. The era of cloud will further amplify growth opportunities in India across sectors. Even public sector companies can use the cloud to bring in next level of efficiencies,” Nadella said.
“Ultimately tech is about lowering friction and removing costs. Data is clearly the new currency, whether it’s industry, education or the public sector. The function is not just collecting data but drawing insights from it.”
The Microsoft chief added he expects governments, PSUs, private companies and startups take up computing in a big way, pointing out that state-owned lender SBI had taken large steps towards adopting the cloud, and said it was a “big milestone” for a regulated entity.
“SBI’s move to cloud will user in a new era of productivity for the bank’s staff,” he said.
Microsoft is working with the Indian government in a “strategic way”, Nadella said. For instance, the company will soon launch Skype with Aadhaar authentication using its Stack cloud platform. “Leveraging the India Stack will let people access bank accounts, ration shops via Sykpe.”
He said that he had seen tremendous change in India when it comes to using technology. “The government’s Aadhaar system and the move to a more digital economy are enlightened steps.”
On Donald Trump’s immigration policies, Nadella said America was a “land of immigrants” and stands for inclusion and diversity.
“I benefited from USA’s enlightened immigration policy. I believe that every country will come to the conclusion that none of us can live in isolation.”
Below is the verbatim transcript of Satya Nadella’s interview to Shereen Bhan on CNBC-TV18.
Q: We know you are excited about India, you are excited about the entrepreneurial energy in India, what does all of that lead to in terms of the contribution that India is likely to make over the next three to five years for Microsoft, both topline and bottomline?
A: For me it is all about the cloud and what we are doing here, not as much in fact just about our technology. We are very thrilled about having opened up our data centers here and bringing some of world class artificial intelligence (AI) and cloud technology. However, what is happening with that technology is what excites me, it is the entrepreneurs, startups and in some sense even scaled up organisations like Flipkart using it to become competitive, to come up with their ideas, public sector using the cloud to bring about next level of efficiency whether it is the government of Andhra Pradesh (AP) doing high school dropout predictions using the cloud, or the government of Punjab analysing speech samples in their call center to improve their services. It is that tremendous public sector, big business, small business work that is happening that is the most exciting thing for us.
Q: In terms of the growth projections for India and I know data is the new currency which is why I am trying to pin you down to give us some color on what we could expect in terms of growth as far as the India business is concerned given the opportunities that you are seeing?
A: To us we don’t break down on by country but the thing that I would say is we have always said for every dollar we have made in India, we would have at least USD 3-4 that are made by the channel and others in India. Now take that opportunity and in the cloud era that in fact is just going to get further amplified and just because -- take the public sector, in the past, public sector organisations were just not able to consume some of the new technology we had because it required a lot of capital investment whereas now when you are doing elections in the UP, they are in fact able to put cameras on polling stations, stream that into the cloud, analyse and monitor the polls, and after the elections, they can dehydrate it all.
So, it is much more accessible for the small business, the large business, and the public sector. So, I envision whatever business which we have built over the last 30 years in India is only going to accelerate because from a secular perspective, there is going to be more computing and more use of that computing.
Q: More strategic partnerships like the sort we have seen you ink with Flipkart, you did one with Tata Motors to push your connected technologies with in-car connectivity, what can we then expect in terms of strategic partnerships in India?
A: In fact tomorrow we will be even talking about another new initiative with State Bank of India (SBI). SBI as you know, one of the largest bank in India is all moving to the cloud. As a regulated entity this is I think a very big milestone for them to adopt the cloud, bring the next level of productivity tools for all employees of the bank and how they in fact work with their customers. So, that is another big initiative.
We are also working with the India Stack in a very strategic way. So when we bring in our cloud, it is not just about our cloud, but about how does it compose or work with and integrate with the India Stack. We in fact are going to launch Skype with Aadhaar authentication. So, you can as a consumer now not only use Skype but you can in fact use Skype to access whether it is bank accounts, or it is the ration shop or anything else because of the ability to have the India Stack come to their work right in Skype.
Q: Since you are talking about leveraging the India Stack, what is the experience been like working with the government, you are working with the central government, you are working with state government's individually as well, what is that experience been like and what have been the lessons learnt?
A: It has been a tremendous change in India when it comes to technology. In fact I would say what the government has done in terms of building out the Aadhaar infrastructure and even the vision of going from presence less to paperless and so on. It is just very enlightened.
So, the way at least we look at it is if anything -- how does the technology adoption across the broad spectrum of the industry and the economy get facilitated by the work we do as well as the work the government does because ultimately it is about removing friction and lowering cost so that there can be more computing that can help every Indian and every Indian organisation.
Q: For 2017 what does the outlook look like both in terms of the demand environment -- you are here to talk about future decoded. In terms of disruption what would be the next big areas for tech disruption?
A: I think the biggest change that is happening whether it is education, whether it is healthcare, manufacturing, the new currency or public sector, clearly the currency is data. Not just about collecting data but how do you create intelligence insights from that data and directly tying that to the topline, bottomline improvements whether it is crop yield improvement or factory floor improvement, that is how people are going to measure it, they are not going to measure it by just any new technology and the buzzword but ultimately how is technology being used to build better margin in cars, better margin in any widget, or in agricultural crop production or public service. That is I think what is exciting where technology has to show up as true productivity gains in the economy and reducing the transaction cost and I think the combination of India Stack and some of the work we are doing can truly absolutely make it happen.
Q: Since we are talking about productivity, the debate also centres now around what does this disruption mean in terms of employment, in terms of under-employment, in terms of jobs creation. When we talk about AI and we talk about living in an AI world, this is something that governments around the world are concerned about including what is happening in the US. How do you address some of those issues and what do you see in terms of hiring prospects for instance in the creation of new-collared jobs as we like to call them?
A: No, it is absolutely a real issue in the sense that whenever there is new technology, there is always going to be displacement. The real challenge in front of all of us is how do we commit ourselves to doing some of the very best work in upscaling people, whether it is students graduating from college, acquiring the absolute right skills for the new jobs that are getting created or even some mid-career workers who get displaced. How do we acquire new skills?
We are very excited about LinkedIn and what LinkedIn can do and especially around the white-collar workers, LinkedIn already has that very efficient closed loop between skills you need, the jobs that you aspire to get and how do we match the two. So we now in fact, will be announcing tomorrow about our new project, Project Sangam which is an extension of what we have done with LinkedIn to more of the middle-collared, new-collared workers. So for example, hospitality can be a great source of employment going forward but the question is how do we train people in the hospitality industry. So we are building out these open platform so that the people with the skilled training capability can pour their training, people with the jobs, corporates and others can put their jobs in it and we would bring essentially the same technology we had in LinkedIn to help both upscale the workforce for these various vocational training jobs and then also find the jobs that they aspire to get.
Q: I want to talk to you about US. The Indian IT industry is concerned about what could happen in the US with the Trump administration, it is surprising especially in India to see CEOs of large corporations come out and speak up publicly against an executive order, which is what companies like Microsoft and you specifically have done. How do you see this playing out?
A: Overall for me, I always go back to the two core principles for us. As a multinational company for us, we want to make sure we do our very best work in creating economic opportunity in every country that we participated. For example in India I have to be able to talk about India first. What have we done for India's economic growth. In America, it is America first and in the UK, it is UK first.
The second principle for us is as an American company, we will always stand forward, I think enduring values of America, it is a land of immigrants. We stand for inclusion and our diversity. These are the two core things that will drive how we advocate for any policy or against any policy in any country for that matter.
So I always go back to these two guiding principles and I am a perfect example of that because if it is not for American technology reaching me growing up in India, I wouldn't have been able to dream the dream and I wouldn't have been able to live the dream if it is not for the enlighten immigration policy of the United States. Having benefited from those two and that personal experience is what informs what we do.
Q: When you talk about as a corporation, you are looking at America first, you are looking at India first and that defines your business strategy for a particular region but when you have politics that demands companies to say it has to be America first, we have to create jobs in America, we look down upon you or we will impose tariffs and barriers and so on and so forth, if you move jobs out of America, how does that impact business decision?
A: Ultimately, we are all subject to the laws of the land. So if any country has policies that dictate economic opportunity creation that is specific to that country, we have to essentially deliver on that because ultimately, I believe what is going to happen is every country, as it looks at their own national interest, will also come to the conclusion that we none of live in isolation, they will look for fair trade deals and in the context of fair trade deals, they will want to get world class technology to be part of their economy. So I don't take any swing towards nationalism or globalisation as a permanent swing. These are all both have to be kept in balance and that is what we are seeing out there.
Q: The headlines, Microsoft has got its mojo back under Satya Nadella, what kind of pressure does that put on you?
A: To me, I think really the two things that I always think about, in fact what is my job, one is that sense of purpose. We are 42 years since we were founded, we really want to stay true to the reason we were founded which is to create technology so that others can create technology and culture because I think most large organisations sometimes after success forget that perhaps the culture that you have today and tomorrow is more a determinant of future success versus any past success you had. As long as we stay focused on really renewing that learning culture and sense of purpose that we have, I think we will remain competitive and more importantly relevant in contributing.