Satya Nadella

from home. Now, his focus is shifting to not just keeping those employees safe, but keeping them engaged, with the rise of Microsoft's chat product teams and a new offering called Viva. All of this as Microsoft stock has continued to rise up more than five percent during his seven years at the helm after languishing for more than a decade under his predecessors Bill Gates and Steve Balmer. He shared this key guidance with us three years ago on

Studio one Point Oh. It's not about changing everything. It's about changing what needs to be changed, and then in lies the tricks to speed. Since then, Microsoft's market cap has crossed one trillion dollars, now closing in on two trillion dollars. But with big tech scrutiny ramping up in Washington and rising tech competition in China, Nadella's next seven years at Microsoft will be just as critical. On this edition of Bloomberg Studio one point oh, an exclusive interview

with Microsoft CEO Sacha Adela. Sacha, thank you so much for doing this. It's so great to have you. Thank you so much, Emily for having me. It's great to be with you. The pandemic has underscored the power of technology in helping companies and governments and families get through this, and Microsoft Teams has been a huge part of that and has been an incredible growth story. Give us a snapshot of just how much Teams has grown through the pandemic.

As we talk a lot about remote work, but the reality is more than fifty of the workforce, whether it is in healthcare or in retail or critical manufacturing, to be uh in the at the site. And so one of the things that really got upended across industries was

how do you connect people? So if you have someone on the front lines and then an engineer perhaps working from home, how do you connect So the team's growth was not just about knowledge workers collaborating but it was in fact really helping frontline workers and knowledge workers come together to keep business continuity in our society and our

economy going. In fact, I shuddered to think even what the economic activity would have been, or what the state of services that we all you know, you know have today would have been but for the state of today's technologies and that cloud architecture and teams clearly has been a massive growth story for us, But it's mostly because of the context of the constraints and how to overcome them. Now you're onto what you believe will be your next

massive line of business employee experience. Tell us about your newest product, Microsoft Fever. The thing that the pandemic has put really shine the light on is how important the experience for the employees is, right, I mean, when you're remote in particular, you want to be staying engaged with your business and your company and its sense of purpose

and mission. You want to be able to collaborate, like as I said, between the folks on the front lines, when the knowledge workers, you want to be able to actually start learning, saying, as a new employee, I joined, how do I build that knowledge capital by learning from others? When I don't have some of the same social structures of the workplace. I need to be able to find them online learn from them as well as the learning content needs to be delivered more in the you know,

the workflow tools I use every day. We've had to introduce even things like virtual commutes and so on in order to help people with transitions. So putting these things all together, the employee engagement, learning, collaboration and well being UH into one experience platform is what Viva is all about. UH. And I think that this represents a new category creation moment. If you look at what we have, the journey we've

been on with Microsoft three six five. We started with individual tools, it became a collaboration suite UH, and now we think it's going to can really get into a new space around employee experience more holistically thinking about productivity not just narrowly as output, but all of learning and well being and collaboration. So if you spend your whole day in teams or word or outlook, are you putting all of those in one place? Is that what that would mean for the user? In fact, it's not that.

It's the exact opposite, which is to say, use the tool that you're using for, for example, any of your communication needs or deep work needs. And then in the context of that, let us bring in the other people you want to work with, the learning content that's going to make you more productive, the well being nudges you need in order to make sure that you have the transition.

So that's the main purpose of an employee experience is to not introduce one more new experience that you need to go to, but to bring an experience that you need in the tools that you're using every day as part of your work. Could this be your next ten billion dollar business? What's the total addressable market? I believe with the XP is you know HR software is there,

or HCM or human capital management software is there. But it's more about really tying what happens in the HR or people operations to the entirety of the business right whether it's in finance, whether it's in marketing, whether it's in engineering. And so we think that this can be like in the years to come, in the decades to come, we'll talk about it like a CRM or an e

RP class category. You have been very outspoken about how employee experience is suffering in the work from home environment, Microsoft teams data showing we're all take more meetings, more chats, more ad hoc calls, more chats on the weekends as well. What concerns you so much about working from home and

this remote work period as it drags on. I would say my main thing is to not just have some new dogma about any one type of work, right the reality is everything in fact, coming out of this crisis perhaps or this pandemic, we're all going to recognize the importance of flexibility. There is real reasons why people may want to work from home, but it might be in

different times and different you know, for different people. It will be different by geography, it will be different by business function, and so we need, at least from a workplace policy perspective as well as the infrastructure and the tooling perspective, build for that flexibility. So we cannot assume remote everything for all time to come, or all things

have to happen only in the workplace. So I'm more fall into the camp of let's make sure that we have built in to both the policies and the infrastructure and the tools maximum flexibility, because none of us, I think we'll want to be constrained anymore, whether it's by the place or the time or the location. Even what's been the hardest part of work from home for you

personally as a leader trying to run this company. I think for me it's been you know, the social capital that gets built, uh, you know in so many different ways when you're able to see the body language, you're able to learn from the accused people by watching people, uh, and some of that social capital is hard to create. Sometimes meetings can become very transactional. So to me that's

probably been the hardest. I'm not saying but that that therefore we should sort of think that somehow remote work is inferior. As I said, there are times when you remote work can be very productive. But at the same time, I think we need to bring in more innovation, like together more than others to start even bridging the social capital creation capabilities. Do you think work from home could

be stifling innovation? Is its stifling innovation? In fact, we're studying, We're collecting a lot of data, and the reality is, let's take our game studios right. The one place where we've seen some challenges is that the game studios do have a tough time in work from home, to be able to bring people together, to in fact collaborate, in fact watch other gamers to get the inspiration to create new content. So clearly there are some places where the

innovation does take a hit. But at the same time, when I look at what's happening with some of the data around GitHub, it's fascinating to see how the world has come together, even more so in the open source side, to create critical software for very and innovate together. So I wouldn't say there's just one answer. So if anything I'm taking away is every there needs to be some

structural change. Perhaps wherever there has been an impediment to creativity or innovation, one has to go back and ask what is that structural change that will allow us, Quite frankly, the next time there's another tail event and we have to work remotely or with other constraints, how can we continue to innovate. So I think that all the solution for every function and every industry is not there today, but I think there will be. This is my conversation

with Microsoft CEO such An Adela. Up next with big tech facing new scrutiny from the US government, is it deja vu for Microsoft, having been through it before, during what some call It's Lost decade and deep platforming. The president should companies like Facebook and Twitter have the power to say whose voices we can and cannot here. I'm

Emily Chang, this is Bloomberg Studio. At one point out it's been seven years almost to the day as we take this that you took over as CEO, and since then the stock has soared over after languishing for more than a decade across a one trillion dollar market cap. If you could pick one thing, what do you think is the single most important thing that you did, right,

It's actually stunning to me that seven years have passed. Um, if I had to sort of you know, having grown up at Microsoft, perhaps even on day one when I started, of course there is a completely new job right now, recognize that, you know, the responsibility of being a CEO is different, even that from one step removed. But I came at it, I think, Emily, from that sense of pride in what this company represented for you know, in

the world. I always felt that I joined Microsoft because of its mission, so reinforcing perhaps that mission sense of purpose and then having this culture of being the learn it alls has probably been the most important thing because they're they're very talented people. The opportunity, whether it was cloud or other technologies, was clear. And I think in any company, you know, you have to go back to the very basics of why do you exist? And if

you don't exist, would anybody miss you? Being able to ask those questions and answer those questions and having a culture that even allows you to really honestly answer those questions is the most important thing. And uh and as an insider at Microsoft, I always felt that and so that is hot I started with. And that's how do I started even my seventh year. What advice would this such an adela give that such an adela seven years ago?

I mean, the thing that perhaps was the steepest learning curve for me um as CEO was understanding what does it mean to have multiple constituents? Right? I mean people talk about it's about customers, it's about employees, it's about investors, it's about other stakeholders. And today, of course multi stakeholder capitalism is the topic that everybody is talking about. But understanding what as a CEO, what does that mean? How

do you really grapple with it? And it can't be something that I will divide my week into multiple stakeholders right in equal quantities. It's about harmonizing that into the core of your business model as well as your operations of as a business. That's probably been the thing that I would say, having a framework for it. I feel fantastic about the work the entire team at Microsoft is done around it right, because you need to have a business model fundamentally where when you do well, the world

around you is doing well. If that is broken, it's very hard to fix even if you have business performance. But if the world around you, because of your business performance is not doing well, that's a social contract that you cannot be put back together. So I would say that's the advice I would give any CEO is to ask, and you know, it's something that it's also got to be managed every day. It's not something you take for granted.

Now you're now on your third administration US presidential administration as CEO of Microsoft. If there was one thing you want this administration to do that would make a difference for Microsoft, what would it be? I think, for quite frankly,

for this administration and the last administration. Right now, the most important thing is how do we get past this pandemic because even as we speak, if you think about some of the big challenges we have around even the core logistics of delivering the vaccines, the vaccine supply chain. So I feel the price of its sector needs to do its job and do its super well. We have many capabilities, but even the government needs to do its job.

And it's really I think, if anything, we've all come to recognize the strength in our institutions in the private sector and in the public sector, and how they all both need to be coordinated and stitched together. And quite frankly, governments are the most capable coordinating agencies we have. Uh, And we just need that and more of that going forward. The power of big tech is being scrutinized by regulators around the world, lawmakers around the world, and regular people

around the world. What do you think it is that the tech industry is doing wrong that makes so many people wonder? Are they too big, too powerful and abusing that power? I'll say a couple of things. Big by itself is not bad, but competition is good. Uh. And more importantly, it's not just competition, but it's that point I made earlier, which is you need to have a big in this model um that really is aligned with

the world doing well. I think that's what's being litigated right, which is there are certain categories of products where the unintended consequences of the growth on that category or lack of competition in it creates issues. And so that's what I think people are all looking at and saying, hey, what's the fixed for that? But I don't think big

by itself is bad or but competition is good. And every business, in particular the businesses that are large and have high scale, the unintended consequences of your scale cannot be dealt after the fact. They need to be dealt while you're scaling. So when it comes to the d platforming of President Trump, for example, should a Facebook or a Twitter or Google or YouTube or Twitch have the power to say who we can and cannot hear from

and if not, who should? Yeah, I mean this is another one of those places where I think unilateral action by individual companies in democracy is like ours is just not I think long term stable, we do need to be able to have framework of laws and norms which are societal norms around even internet safety. Uh, and what is the public square that really is in alignment with

a thriving democracy. So we just need to get to a stable state, uh in that because otherwise, depending on any one individual CEO in any one of these companies to make calls that are going to really help us maintain something as sacred and as important as our democracy in the long run is just no way at least I, as a citizen would advocate for now. Slack has alleged that Microsoft combining teams into offices anti competitive. Um, what's

your response to that? How does the landscape change now that slack has been bought by Salesforce and as part of this bigger entity. I think both Slack and Salesforce have been successful. For example, I always point out that when we think about what they were able to do, I always ask the question would slack away even existed if it was not for the free access they had

on top of say, the Windows platform. They didn't have to call Microsoft, they didn't have to go through any of our app stores, they didn't have need any uh you know, off our permission. Compared to any of the other platforms that they're available on, we perhaps provide the most open platform and Windows and even on Office five. You can, in fact use all of the APIs that we expose, integrate with any application, and people use it.

If you look at even the usage reports, this slack usage and Microsoft three five years, it's so and same thing with Salesforce. So the fact that they're combining will compete with them, and they will also cooperate with them and provide them access to our platforms. And I think they should measure it by what type of success they've had on top of our platform. You worked at Microsoft through its own antitrust battles, You remember what that was like.

It's been called the Lost Decade if you will. What cultural risks do you believe these companies face, even if they're not broken up. What's happening on the inside as

these investigations play out. I don't know if there are real parallels between what happened with Microsoft and any of them, but I would say I think the core, as I always go back, is you know, if you have a business and a business model where when you are doing well around you, people are doing well, uh, and that is something that your own employees feel, then I think

things will work out culturally. When that is not true, I think It's very, very hard because one of the things I feel is, as somebody said, you've got to keep it simple. What do you say, what you do, and what you think all needs to be consistent. You can't sort of have a real distance between those three things. And that's what at least would be my advice and to anybody in starting with ourselves. You're listening my conversation with such An Adela, CEO of Microsoft, Remember Microsoft trying

to buy TikTok. Nidela tells us why, and we talk about Microsoft's future in self driving cars and what the CEO's next seven years will hold. I'm Emily Chang, this is Bloomberg Studio. At one point out stay with us. What are your biggest concerns about a rising tech industry in China. I think that first of all, there is no God given right for the say US tech companies to take for granted that they cannot be other tech

powers and text fears. So, if anything, rising competition in the world, whether it's from Europe, whether it's from China or the rest of Asia, is some thing that I think all of us, even quote and quote in the West Coast of the United States, need to be more grounded in because sometimes I think we celebrate our own advances far too much, and we should be more looking to saying what's happening in the world and how relevant

is our technology in the world. So from that perspective, I'm a more big believer that the world does better when there is real competition across the globe and there is more technology that then is diffused throughout that said, national security concerns are real concerns, uh, and that's for

nation states to really, you know, legislate on. But I think for private companies like ours, we should be thinking about how how good is our technology, how useful is our technology around the world, and welcome competition wherever it's coming from. Microsoft tried to buy TikTok and it didn't happen. Why did you want to buy TikTok? You know, it's it's it's it's I think TikTok has achieved a lot of success in being able to take take a new media format like short form video and create a very

interesting property. Here. We had a very crisp vision or for what we would want to do with it, uh, and including for example, addressing some of the very real concerns around national security, But that was the last summer

and we moved on. Would you be interested in other social media properties today have emily, whether it's Minecraft or Xbox Live or LinkedIn or even get up because it is you know, one of the things perhaps that's not as well understood in the world is we do have some very high scale, proper communities and properties like that

that we are engaged in making sure. For example, what does internet safety look like, how does the quality of the dialogue on the LinkedIn platform, what's moderation on Xbox Live look like? How can we even think about GitHub and making sure that that community is thriving. So to me, I'm very very focused on the properties we have, scaling them and scaling them with these unintended consequences, in particular around internet safety. Microsoft is now teaming up with GM

and Cruise to commercialize self driving cars. You know, talk to us a little bit more about what we'll see

here in terms of Microsoft's mobility play. It's actually an interesting combination or GM that is an incumbent and Cruise that is a new entrant, both relying and depending on Microsoft cloud computing technology to build their own computing platforms, and that's what we want to replicate quite frankly broadly in the auto industry as well as in other industries, because we think that the model that at least I have is that this is not about one wordically integrated

company called Microsoft. It's about digital technology being much more evenly spread across every tech industry. I mean, every industry becoming more like a digital tech industry. And that's what we are intend to do. Even with these partners, we're seeing a huge pushback against the establishment and centralized power. Was it whether it is the capital riot or individual investors driving up the price of game stoff, or the unionization of tech employees. Do you see it as a

fundamental shift in power from institutions to individuals? And how will these trends inform your next seven years as the CEO of Microsoft. It's a great it's a great question, Emily, And you know, you know, sort of in some sense, I'm still learning what this shift looks like. But I would say the core principle of institutions and institutional strength that fundamentally distributes power is a good thing. It's that's kind of what democracies were all about. I mean, Fundamentally,

democracies were about institutions that actually distributed power. So any institution that centralizes power will have more challenges in the long run because they won't be as resilient as distributed powers.

So from that principal perspective, I think that we can take perhaps a lot of hope from what's happening, but we'll also have to watch how this plays out so that we really make sure that now we don't swing from one to the other only to sort of recognize that there needs to be more thought given to how we transform such an Adella, CEO of Microsoft, thank you so much for joining us on this edition of Bloomberg Studio. At one point, now, thank you so much, Emily, Bloomberg

Studio at one point. I was produced and edited by Kevin Hines. Our executive producers Alison Weiss Are. Managing editor is Daniel Culperson, with production assistance from Mallory Abelhouse and editing assistance from Brian Carter gainor I'm Emily changing your host and executive producer. This is Bloomberg