Dear Satya: As you begin your ninth year as Microsoft CEO, your new obsession with artificial intelligence (AI) — what you’ve recently called “a new computing platform” and “the next major wave of computing” — raises some very serious questions about your $100-billion Microsoft Cloud.
Here are the three biggest questions that have, in the AI-above-everything environment you have created, arisen — and that your company, for some bizarre reason, is unwilling to address. But more on that in a moment — first, the questions.
- If AI is, as you have very publicly declared, “a new computing platform” and “the next major wave of computing,” then is the Microsoft Cloud the now-obsolete old computing platform that’s being sent out to pasture? Your recent fiscal Q2 earnings-call remarks raised this issue: “Microsoft CEO Nadella Comes Out Swinging: ‘We Will Lead AI Era’.”
- If, as you have very publicly stated, “the age of AI is upon us,” and AI is the “new computing platform,” then what exactly is the Microsoft Cloud, upon which your customers in calendar 2022 invested $100 billion? Again from your opening remarks on the Jan. 24 earnings call: “And the next major wave of computing is being born, as we turn the world’s most advanced AI models into a new computing platform.”
- Rolling up those first two questions, how will this “next major wave of computing” interact with the wide-ranging Microsoft Cloud? And will you call the new thing the Microsoft AI Cloud? Or, to underscore the new preeminence of AI that you have anointed, will you simply change the name of Microsoft Cloud to Microsoft AI?
I’m not trying to be difficult here — as evidenced by the hundreds of articles and dozens of videos I’ve done about you and the Microsoft Cloud over the past several years, I’m a huge fan of your vision and your strategy and your superb execution in earning, week after week against ferocious competition, the #1 spot on the Cloud Wars Top 10 for three years straight.
Maybe it’s a case of the tendency among many successful and fast-growing tech vendors to see the world from inside their own self-centered bubble. That inside-out perspective causes many tech companies to view what’s going on out in the world through their own internal and product-centric lens. In this case, that could mean that because everybody within Microsoft knows exactly how to answer those three questions above, then everybody outside of Microsoft must surely know those answers as well — don’t they?
But put yourself in the shoes of the CEO of a midmarket manufacturing company that in the past couple of years has invested, let’s say, $25 million in the Microsoft Cloud. You’ve just told that person — loudly and proudly — that AI is Microsoft’s new focus, and that AI is, again, the next computing platform. If you’re the CEO of that midmarket manufacturing company that’s just bet her/his company on the Microsoft Cloud, and you were just told that Microsoft’s got a shiny new toy that is on the verge of replacing the Microsoft Cloud, how the heck would you feel?
Of course, that hypothetical raises the 3 Big Questions at the top of this letter: If AI is “the next major wave of computing” for Microsoft, then what happens to the Microsoft Cloud?
Well, it just so happens that last week, I reached out to Microsoft to get some answers, some perspective, some illumination, or maybe even just some vague clue about what “the age of AI” portends for the Microsoft Cloud.
Here are the verbatim questions I submitted to my assigned contact person at Microsoft’s PR firm, and then I’ll share the gist of the response I got.
1) If AI is or will shortly be the next computing platform, ”what is the current platform that he is saying will be replaced or overtaken?
2) If AI is the next computing platform, how does Microsoft describe the cloud in that context? If the cloud is not the current “computing platform,” then how does Microsoft want people to think about what the cloud is?
3) How does Microsoft see AI (the next computing platform) and the cloud coexisting? How does Microsoft see the future interaction between AI and cloud?
My goal is to offer a broader and deeper understanding of Microsoft’s intentions as it aspires to be the leader in AI (Satya’s words: “we’re going to lead in the AI era”) and as it has become the first cloud provider to exceed $100 billion in annual cloud revenue.
As I mentioned above, it is possible that everyone in the world except me knows the answers to those questions — but I sure doubt that’s the case. And since the points you were making about the ascendancy of AI — as well as the points you did not make regarding the consequent new/different/declining role of the cloud — affect many tens and possibly hundreds of thousands of businesses using Microsoft Cloud, I think Microsoft has a responsibility to provide at least some clarity.
But, apparently, your company feels it bears no such responsibility.
None. Zippo.
Because here’s the core of the reply I got from my contact person at Microsoft’s PR firm: “I checked in with the Microsoft team and they are politely declining to comment.”
(Hey, at least the refusal to clarify your highly disruptive comments about AI’s new spot at the top of the computing-platform hierarchy was offered “politely”!)
Well I know you’re a busy guy, Satya, and I’m just some doofus pecking away at a keyboard, so I’ll conclude with this: Your eight years as Microsoft CEO have been marked by your own superb communication, your unflinching commitment to seeing the world through the eyes of your customers, and your ability to talk about very complex technology in ways business leaders of every stripe can understand.
But you — and by extension your company — have missed the boat on this one very badly. When you laid off 10,000 people, you communicated the why and how of that decision in very clear terms.
But in crowning AI as the next and only Big Thing, and anointing it “the next major wave of computing” while saying absolutely NOTHING about where that leaves the Microsoft Cloud, you have created enormous confusion in the market and particularly among Microsoft customers who, after all, collectively forked over $100 billion to your company in 2022 for Microsoft Cloud services and innovation and security and capability.
And those customers deserve to know, from you, the answers to those three questions above.
PS: My guess is that during every single hour of every single day that goes by with no clarification from you, Amazon and Google and Oracle will be stepping in to act on your behalf and will definitely be answering those questions for you in customer conversations.
All the best,
Bob
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