In the midst of these troubled times, a cartoonist drew the Microsoft organization chart as warring gangs, each pointing a gun at another. As a twenty-four-year veteran of Microsoft, a consummate insider, the caricature really bothered me. But what upset me more was that our own people just accepted it. Sure, I had experienced some of that disharmony in my various roles.
But I never saw it as insolvable. I told them I was committed to ruthlessly removing barriers to innovation so we could get back to what we all joined the company to do—to make a difference in the world.
I surmised he wanted me to get my confidence back. It was early in the season and he needed me to be effective all year. He was an empathetic leader, and he knew that if I lost my confidence it would be hard to get it back. That is what leadership is about. It was a subtle, important leadership lesson about when to intervene and when to build the confidence of an individual and a team. That team captain went on to play many years of prestigious Ranji Trophy competition, and he taught me a very valuable lesson.
My approach has never been to conduct business as usual. The culmination of these experiences has provided the raw material for the transformation we are undergoing today—a set of principles based on the alchemy of purpose, innovation, and empathy. His suffering from asphyxia in utero, had changed our lives in ways we had not anticipated.
Instead we had to learn to cope. When Zain came home from the intensive care unit ICU , Anu internalized this understanding immediately. There were multiple therapies to be administered to him every day, not to mention quite a few surgeries he needed that called for strenuous follow-up care after nerve-racking ICU stays.
I noticed just how many of the devices ran on Windows and how they were increasingly connected to the cloud, that network of massive data storage and computational power that is now a fundamental part of the technology applications we take for granted today.
It was a stark reminder that our work at Microsoft transcended business, that it made life itself possible for a fragile young boy. It also brought a new level of gravity to the looming decisions back at the office on our cloud and Windows 10 upgrades. And I do this both at home and at work. Being an empathetic father, and bringing that desire to discover what is at the core, the soul, makes me a better leader. But it is impossible to be an empathetic leader sitting in an office behind a computer screen all day.
An empathetic leader needs to be out in the world, meeting people where they live and seeing how the technology we create affects their daily activities. So many people around the world today depend on mobile and cloud technologies without knowing it.
It has the power to transform lives, companies, and societies. Both in the state where I was born and the state in which I now live, schools use the power of cloud computing to analyze large amounts of data to uncover insights that can improve dropout rates. The problem is lack of resources, not lack of ambition. Cloud technology is helping improve outcomes for kids and families as intelligence from cloud data is now predicting which students are most likely to drop out of school so that resources can be focused on providing them the help they need.
Thanks to mobile and cloud technologies, a startup in Kenya has built a solar grid that people living on less than two dollars a day can lease to have safe, low-cost lighting and efficient cookstoves, replacing polluting and dangerous kerosene power.
A university in Greece, leveraging cloud data, is working with firefighters in that country to predict and prevent massive wildfires like the one in that killed eighty-four people and burned , acres. In Sweden, researchers are using cloud technologies to ensure that children are screened earlier and more accurately for dyslexia, a reading disorder that impacts educational outcomes for millions.
Eye movement data analyzed at schools today can be compared with a data set from those diagnosed with dyslexia thirty years ago. Diagnostic accuracy rates have increased from 70 to 95 percent, and the time to get a diagnosis has decreased from three years to three minutes.
This means students, parents, and schools are prepared earlier and struggle less. In Japan, crowd-sourced data collected from hundreds of sensors nationwide helped the public monitor radiation from the Fukushima nuclear plant to reduce risks to food quality and transportation. The 13 million measurements from five hundred remote sensors generated a heat map that alerted authorities to threats to local rice production. And in Nepal, after the devastating earthquake there in April , disaster relief workers from the United Nations used the public cloud to collect and analyze massive amounts of data about schools, hospitals, and homes to speed up access to compensatory entitlements, relief packages, and other assistance.
The aging Rocky looks skyward. What cloud? But just a few years ago, that outcome seemed very doubtful. By , storm clouds were gathering over Microsoft. Meanwhile, Amazon had quietly launched Amazon Web Services AWS , establishing itself for years to come as a leader in the lucrative, rapidly growing cloud services business.
The logic behind the advent of the cloud was simple and compelling. The PC Revolution of the s, led by Microsoft, Intel, Apple, and others, had made computing accessible to homes and offices around the world. But the cost of maintaining servers in an ever-growing sea of data—and the advent of businesses like Amazon, Office , Google, and Facebook —simply outpaced the ability for servers to keep up. The emergence of cloud services fundamentally shifted the economics of computing.
It standardized and pooled computing resources and automated maintenance tasks once done manually. It allowed for elastic scaling up or down on a self-service, pay- as-you-go basis. Cloud providers invested in enormous data centers around the world and then rented them out at a lower cost per user.
This was the Cloud Revolution. Amazon was one of the first to cash in with AWS. They figured out early on that the same cloud infrastructure they used to sell books, movies, and other retail items could be rented, like a time-share, to other businesses and startups at a much lower price than it would take for each company to build its own cloud. By June , Amazon already had , developers building applications and services for their cloud platform. Microsoft did not yet have a commercially viable cloud platform.
All of this spelled trouble for Microsoft. Even before the Great Recession of , our stock had begun a downward slide. But others were leaving, too. Always a bold, courageous, and famously enthusiastic leader, Steve called me one day to say he had an idea.
For context, search engines generate revenue through a form of advertising known as an auction. Advertisers bid on search keywords that match their product or service; the winning bid gets an opportunity to display a relevant advertisement on the search results page.
Search for a car and a car dealership has likely paid to be displayed prominently on your results page. Delivering that purchase experience both from the consumer and the advertiser perspective is computationally expensive and sophisticated. And while Microsoft was struggling with low market share in search, Steve had invested in it because it would require the company to compete in a sector beyond Windows and Office and build great technology—which he saw as the future of our industry.
This was the business he was inviting me to join. You may just crash with it. Despite the warning, the job sounded intriguing. I was running an emerging new business within Microsoft Dynamics. I had taken over from Doug Burgum who later would become the governor of North Dakota.
Doug was an inspirational leader who mentored me to become a more complete leader. Some of the lessons I learned from Doug are today an important part of who I am as a leader. Leading the Dynamics team was a dream job. For the first time, I was getting the chance to run a business end to end.
I had spent nearly five years preparing for this job. I had all the relationships, inside and outside Microsoft, to drive the Dynamics business forward. So one night, after a long day at work, I decided to drive over to Building 88, which housed the Internet search engineering team. I wanted to walk the hallways and see who these people were. How else could I empathize with the team I was being asked to lead?
It was about 9 p. But what I observed caused me to wonder: What gets people to work like this? Something important must be happening in Building Seeing the team that night, their commitment and dedication, clinched it for me. I was entering a new world, and the move proved to be fortuitous. Little did I know it would be my proving ground for future leadership and the future of the company.
Very quickly I realized we would need four essential skills to build an online, cloud-based business that would be accessed primarily from mobile phones rather than desktop computers. First, I thought I knew a lot about distributed computing systems, but suddenly I realized I had to completely relearn these systems because of the cloud. A distributed system, simply put, is how software communicates and coordinates across networked computers. Imagine hundreds of thousands of people typing in search queries at the same time.
If those queries landed in just one server somewhere in a room on the West Coast, it would break that server. But now imagine those queries being distributed evenly across a network of servers. The vast array of computing power would enable delivery of instant, relevant results to the consumer. This elasticity is a core attribute of cloud computing architecture. Second, we had to become great at consumer product design. We knew we needed great technology, but we also understood we needed a great experience, one you want to engage with time and again.
Modern software design involves online products updated through continuous experimentation. User scorecards determine which is the most effective. Sometimes, seemingly tiny differences can mean a lot. Something as simple as the color or size of a type font may profoundly impact the willingness of consumers to engage, triggering behavioral variations that may be worth tens of millions in revenue. Now Microsoft had to master this new approach to product design.
Third, we had to be great at understanding and building two-sided markets—the economics of a new online business. On one side are the consumers who go online for search results, and on the other side are the advertisers who want their businesses to be found. Both are needed to succeed. This creates the auction effect I was describing earlier. Both sides of the business are equally important, and designing the experience for both sides is crucial.
Attracting more and more searchers obviously makes it easier to attract more and more advertisers. And showing the right advertisements is crucial to delivering relevant results. Finally, we needed to be great at applied machine learning ML.
ML is a very rich form of data analytics that is foundational to artificial intelligence. Ultimately, Bing would prove to be a great training ground for building the hyper-scale, cloud-first services that today permeate Microsoft. Building Bing taught us about scale, experimentation-led design, applied ML, and auction-based pricing. But we started very much behind in search; we had yet to launch a product that could compete with Google. So I hit the road, meeting with executives from Facebook, Amazon, Yahoo, and Apple to evangelize our emerging search engine.
I wanted to make deals, but I also wanted to learn more about how they engineered their products to stay fresh. I found that the key was agility, agility, agility. We needed to develop speed, nimbleness, and athleticism to get the consumer experience right, not just once but daily.
We needed to set and repeatedly meet short-term goals, shipping code at a more modern, fast- paced cadence. To accomplish this, we needed to periodically gather all of the decision makers in a war-room setting. In September I called together the search engineers for the first of these meetings, which we casually called Search Checkpoint 1. We had decided to launch Bing in June —a new search engine and a new brand. I learned a lot about creating urgency and mobilizing leaders with different skills and backgrounds toward one common goal in what was a new area for Microsoft.
I realized that in a successful company it is as important to unlearn some old habits as it is to learn new skills. My learning during this time was greatly accelerated by the hiring of Dr. Qi Lu as head of all online services at Microsoft. Qi had been an executive at Yahoo and was intensely recruited throughout Silicon Valley.
So, I did not hesitate in supporting the hiring of Qi to Microsoft, even though in some sense it was stalling my own promotion. I realized that my own professional growth would come from working for and learning from Qi during my time in our online business.
Later Qi would become an important member of my senior leadership team during the first few years I was CEO. Qi eventually left the company, but he continues to be a trusted friend and advisor. Over time, Yahoo integrated Bing as its search engine, and together we powered a quarter of all U.
The search engine that many had said should be shuttered in its early days of struggle continued to win an expanding share of the market, and today it is a profitable multi-billion-dollar business for Microsoft. Just as important, though, was how it helped to jump-start our move to the cloud. As was so often the case at Microsoft, there were other experiments elsewhere in the company aimed at the same problem, leading to internal competition and even fiefdoms. Since , Ray Ozzie had been incubating a highly secretive cloud infrastructure product with the code name Red Dog.
At some point during my time at Bing, I met with the Red Dog team to explore how we might work together. They were the deep distributed systems experts. They lacked the feedback loop that comes from running an at-scale cloud service.
And the Red Dog team was a side effort that was ignored by the mainstream of the STB leadership and organization. In late , Ray Ozzie announced in a long internal memo that he was leaving Microsoft. But even though engineers were working on cloud-related technologies, a clear vision of a Microsoft cloud platform had not yet surfaced—to say nothing of a real-world revenue stream. I was given this news of my new role not even a week before I got the job.
Steve had a sense that we needed to move faster to the cloud. He had personally and aggressively driven the transformation of our Office business to the cloud.
He wanted us to be equally bold when it came to cloud infrastructure. When I took over our fledgling cloud business in January , analysts estimated that cloud revenues were already multi-billions of dollars with Amazon in the lead and Microsoft nowhere to be seen.
Meanwhile, revenues from our cloud services could be counted in the millions, not the billions. Although Amazon did not report its AWS revenues in those days, they were the clear leader, building a huge business without any real challenge from Microsoft. In his annual letter to shareholders in April , just as I was beginning my new role, Amazon CEO Jeff Bezos gleefully offered a short course on the computer science and economics underlying their burgeoning cloud enterprise.
He wrote about Bayesian estimators, machine learning, pattern recognition, and probabilistic decision making. Amazon was leading a revolution and we had not even mustered our troops. Years earlier I had left Sun Microsystems to help Microsoft capture the lead in the enterprise market, and here we were once again far behind. I would miss working with colleagues at Bing, but I was excited to lead what I sensed would be the biggest transformation of Microsoft in a generation—our journey to the cloud.
I had spent three years, from to , learning the cloud—pressure-testing its infrastructure, operations, and economics—but as a user, not as a provider of the cloud. That experience would enable me to execute with speed in my new role. The server and tools business was at the peak of its commercial success and yet it was missing the future.
The organization was deeply divided over the importance of the cloud business. There was constant tension between diverging forces. I had a very good idea about where we needed to go, but I realized that my real task was to motivate the pride and desire in the STB leaders to go there with me. Only then could we go boldly together to a new and better place. Leadership means making choices and then rallying the team around those choices.
The choice of leading through consensus versus fiat is a false one. Any institution-building comes from having a clear vision and culture that works to motivate progress both top-down and bottom-up. What I remembered was the lesson that went unheeded: the urgent need to build shared context, trust, and credibility with your team.
The lead firefighter, who ultimately escaped the blaze, knew that he had to build a small fire in order to escape the bigger fire. But no one would follow him. His team paid the ultimate price. I was determined not to make the same mistake. To win their support, I needed to build shared context.
I decided not to bring my old team from Bing with me. It was important that the transformation come from within, from the core. The team I inherited was more like a group of individuals. Each leader in the group was, in essence, CEO of a self-sustaining business. Each lived and operated in a silo, and most had been doing so for a very long time. My portfolio had no center of gravity, and to make matters worse, many thought they should have gotten my job.
To break out of this impasse, I met with everyone on the STB leadership team individually, taking their pulse, asking questions and listening. Together we had to see that our North Star would be a cloud-first strategy. Though we would be cloud-first, our server strength would enable us to differentiate ourselves as the company that delivered a hybrid solution to customers who wanted both private, on-premise servers and access to the public cloud.
This new framework helped reshape the argument, breaking down the resistance to going all-in on the cloud. I began to notice a new openness to innovation and a search for creative ways to meet the needs of our commercial customers. Unfortunately, Red Dog, which had become Windows Azure, was still struggling.
They were trying to leapfrog with a new approach to cloud computing, but the market was clearly giving them feedback that they first needed to meet their current needs. We needed to infuse more resources into the team to execute on that road map.
It was time to move Azure into the mainstream of STB rather than have it be a side project. People, the human element of any enterprise, are ultimately the greatest asset, and so I set about assembling the right team, starting with Scott Guthrie, a very accomplished Microsoft engineer. He had spearheaded a number of successful company technologies focused on developers. Over time, many others from both inside and outside the company joined our effort. Net and Visual Studio, joined to lead the core Azure infrastructure.
We recruited the highly regarded Big Data researcher Raghu Ramakrishnan from Yahoo and James Phillips who had cofounded the database company Couchbase. We relied heavily on the expertise of Joy Chik and Brad Anderson to advance our device management solutions for the mobile world. Under their leadership we made our first major steps in providing business customers the technology they need to secure and manage Windows, iOS, and Android devices. Julia Liuson took over our Visual Studio developer tools, evolving it to be the tool of choice for any developer regardless of platform or app.
Complementing these world-class engineers was world-class business planning and modeling. Takeshi had been an important member of the team that had strategized and executed the transformation of Office products to a cloud-based, subscription model. And in his role as business lead for STB, he set about building the new commercial model that was based on creating meters to measure consumption of cloud services and inventing new ways to package our products for customers.
One of the early decisions I made was to differentiate Azure with our data and AI capabilities. Raghu and team designed and built the data platform that could help store and process exabyte-scale data. I wanted us to make this capability available to third-party developers as part of Azure. Joseph had been passionately working in ML for all his professional career, and he brought that passion to his new role at Microsoft. Now our cloud not only could store and compute massive amounts of data, it could also analyze and learn from the data.
The practical value of ML is immense and incredibly varied. Take a Microsoft customer like ThyssenKrupp, a manufacturer in the elevator and escalator business. Using Azure and Azure ML, they can now predict in advance when an elevator or escalator will need maintenance, virtually eliminating outages and creating new value for its customers. Similarly, an insurer like MetLife can spin up our cloud with ML overnight to run enormous actuarial tables and have answers to its most crucial financial questions in the morning, making it possible for the company to adapt quickly to dramatic shifts in the insurance landscape—an unexpected flu epidemic, a more-violent-than-normal hurricane season.
Whether you are in Ethiopia or Evanston, Ohio, or if you hold a doctorate in data science or not, everyone should have that capability to learn from the data. With Azure, Microsoft would democratize machine learning just as it had done with personal computing back in the s.
To me, meeting with customers and learning from both their articulated and unarticulated needs is key to any product innovation agenda. In my meetings with customers I would usually bring other leaders and engineers along so that we could learn together. On one trip to the Bay Area, we met with several startups.
It became clear that we needed to support the Linux operating system, and we had already taken some rudimentary steps toward that with Azure. But as Scott Guthrie and our team walked out of those meetings that day, it was certain that we needed to make first-class support for Linux in Azure.
We made that decision by the time we got to the parking lot. This may sound like a purely technical dilemma, but it also posed a profound cultural challenge. Dogma at Microsoft had long held that the open-source software from Linux was the enemy. We had to meet the customers where they were and, more importantly, we needed to ensure that we viewed our opportunity not through a rearview mirror, but with a more future-oriented perspective.
We changed the name of the product from Windows Azure to Microsoft Azure to make it clear that our cloud was not just about Windows. But with Azure we were now powering thousands of other businesses every minute of every day. The operational culture was as important as any key technology breakthrough. We would have on a single Skype call dozens of engineers plus our customer-facing field teams, all of whom would swarm together to coordinate and fix any problem.
And every such incident would lead to rigorous root-cause analysis so that we could continuously learn and improve. I would, from time to time, join these calls to see our engineers in action. The key is to not have the top leaders infuse fear or panic but to help foster the actions that fix the issue at hand and the learning from it.
We had looked beyond the packaged products that had made Microsoft one of the most valuable companies in the world to see greater opportunity in our cloud platform, Azure, and cloud services like O, the online version of our hugely popular Office productivity suite. We are investing in and improving these new products, building new muscle as a service provider, and embracing Linux and other open-source efforts, all while keeping focus on our customers. The cloud business taught me a series of lessons I would carry with me for years to come.
Perhaps the most important is this: A leader must see the external opportunities and the internal capability and culture —and all of the connections among them—and respond to them before they become obvious parts of the conventional wisdom.
And a leader will not always get it right. But the batting average for how well a leader does this is going to define his or her longevity in business. Over the Thanksgiving break I had banged out a ten-page memo responding to several questions the board of directors had posed during the search process. The questions required a lot of soul-searching. What is my vision?
What is the strategy to achieve it? What does success look like and where to get started? Now, a few months later, I reflected on what I had written and the process that led to this day. Finding the next CEO had been a long journey. Throughout the fall, reporters routinely speculated about who would be named as his replacement. Several of us were asked to put our ideas on paper for the board of directors as a sort of audition for the job.
He encouraged me to be my own man. Bill and Paul Allen founded Microsoft. Bill and Steve built Microsoft. As founder, Bill had famously recruited Steve out of Stanford business school in to become his first business manager. Not only did they build great products, but they shaped hundreds of executives who today run global businesses everywhere, including me.
They had given me more and more responsibility over the years, and taught me that our software can impact not just the lives of computer hobbyists but entire societies and economies. He was inviting me to throw dogma out the window. He knew more than anyone that the company had to change, and he selflessly stepped out of his role as CEO to ensure the change happened in a deep way. This means humans will interact with experiences that span a multitude of devices and senses.
It would be only too easy to continue to live off our past successes. We had been like kings, albeit now in a threatened kingdom. There were ways to cash- cow this business and drive short-term return, but I believed we could build long-term value by being true to our identity and innovating. I pulled into a parking space outside Studio D, home of our Xbox development team. I knew they were hopeful but also skeptical. One had only to look at a few industry charts to see why.
After decades of steady growth in worldwide PC shipments, sales had peaked and were now in decline. Quarterly PC shipments were now around 70 million, while smartphone shipments were reaching over million. This was bad news for Microsoft. Every PC sold meant a royalty payment to Microsoft. To make matters worse, not only were PC sales soft, but so was interest in Windows 8, launched eighteen months earlier. We have therefore made the book available to you as a cheaper version online or as a free download due to this.
This book is available along with other best marketing strategy books In addition, you can find the best places to read it online for free or for a stipend. As well as other books by this author, you can find free audiobook versions in mp3, youtube, or otherwise. The New York Times bestseller Hit Refresh is about individual change, about the transformation happening inside of Microsoft and the technology that will soon impact all of our lives—the arrival of the most exciting and disruptive wave of technology humankind has experienced: artificial intelligence, mixed reality, and quantum computing.
Satya Nadella explores a fascinating childhood before immigrating to the U. Microsoft is a leading most company in the world due to the continuous transformation of the company.
This is an amazing book which shares the history of Microsoft from the old days to modern. You can also download Tim Cook by Leander Kahney. Who Was Catherine The Great?
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