Microsoft’s Scott Guthrie Discusses Cloud’s Future, Asia And More

Microsoft is on a monster win streak. Its stock price, which had barely risen above its 2000 peak prior to 2017, has now risen almost threefold in the past three years. On any given day, Microsoft or Apple stands as the world's most-valued company, at close to a trillion-and-a-half dollars.

Behind the surge is CEO Satya Nadella's transformative bet on cloud computing, which he announced upon taking the post in 2014. The risk was huge, since Microsoft's cloud computing engine, Azure, was then far behind cloud pioneer and leader Amazon Web Services (AWS), IBM and others.

Nadella gave his old job, executive vice president of Microsoft Cloud+AI Group, to Microsoft executive Guthrie and asked Guthrie to make Azure competitive with giant AWS. Guthrie has succeeded. Microsoft's cloud business reported $12 billion in sales in 2019, with Azure growing 62% in the latest quarter. Forbes has called Guthrie arguably the second most-powerful executive at Microsoft after Nadella.

In late January I sat down with Guthrie, wearing his trademark red polo shirt and jeans, at Microsoft headquarters in Redmond, Washington. Below are edited highlights of Guthrie's remarks.

On the shift to cloud computing:

“We made a pivot six years ago, when Satya became CEO, to be a cloud-first company. Our goal was to accelerate digital transformation for our customers. Give them cloud as a way to let them advance their business and add more tech intensity to their organization.”

On the cloud's future:

“We see a faster rate of evolution in the digital space. Cloud lets us scale up at the pace of Moore's Law, but also scale out rapidly and use less infrastructure. The physical world is going digital. Everything has an IP address. Everything will be connected at 5G speed. The ability to link physical and digital processes transforms the amount of data you can collect and the insights you will have. We see every business out there retail, logistics, finance, manufacturing, everything reinventing their business processes and revenue models because of that change.”

On Asia's potential:

and India are among our fastest-growing regions for Azure. This growth comes from large companies, like LG and Samsung, and from newer companies like Flipkart, Ola Cab and Jio Phones in India. Singapore is one of our largest regions of Azure, what we call a hub region. Similarly, if you look at Hong Kong and Australia and the customers across Malaysia, Indonesia, Vietnam, and Thailand, those are all big markets for us. We see tremendous growth.”

On Microsoft's competitive advantage:

“Microsoft has 56 Azure regions around the world and more cloud regions in Asia than any other cloud provider. So, for issues such as data residency and very local compliance certifications, we can work in countries that other cloud vendors can't. All of that makes a big difference to companies as they look to expand and transform their business.”

On the cloud as an equalizer:

“We see great companies in these regions. They aspire to be global companies and reach every market around the world. The cloud is a great equalizer. It lets a company in any country expand outside their region. An Azure customer in Jakarta, Singapore or Bangalore can, with a push of a button, deploy their products and services in Europe. North America, the Middle East or Africa while meeting local regulations and compliance.”

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