Microsoft’s Satya Nadella Throws the Doors Open Ahead of Build

Microsoft hasn’t always had a reputation for being “open,” but CEO Satya Nadella and the rest of his executive team would like you to think that its approach to software has changed. Not only that it has changed, but that Microsoft has evolved its strategy during a time when some of its top competitors are selling you on software that locks you in—platforms that are so closed that “AOL will feel like a very open world compared to the kind of worlds that both Android and iOS have built,” Nadella says.

It’s this vision of openness that Nadella and his lieutenants will be selling this week at Build, the company’s annual software development conference. Like all developer conferences, Build aims to excite and incentivize developers; without them, new and genuinely inventive apps might not get built.

But, like the other software conferences happening around this time of year, Build will also be a reminder that in this era of tech, big companies can no longer operate in a vacuum. Nadella acknowledges that most people don’t work solely in a Microsoft environment, and much of what I was shown in advance of the conference stressed interoperability between Microsoft products and outside applications.

The company showcased workflow products meant to compete with the likes of Slack and Trello—while also discussing how those competitor products might eventually integrate into Microsoft’s software. I also glimpsed not-yet-released features for their new browser—which is built on Chromium, Google’s open-source web browser tech. And Microsoft believes its Azure Machine Learning Service will be a boon for developers who want to quickly generate ML models. (It’s also worth noting that Microsoft acquired the behemoth open source repository GitHub last summer.)

This is all happening against a backdrop of a different kind of openness. US tech companies are being scrutinized from the outside, while conscientious objectors within their ranks are calling out their leaders on both controversial business decisions and a stunning lack of diversity and inclusion. Microsoft is not immune. Last month, a group of workers protested the company’s treatment of women.

When asked about diversity and inclusion, Nadella insists that the whole notion of giving the “talented jerk” a pass is over. “That’s done,” he says. “In 2019, to succeed, I hope anybody joining this industry starts by saying, ‘I want to be great by honing my skills, but I want to create energy around me where people of all genders and ethnicities can contribute.’”

It’s a rosy and rather optimistic view of tech right now—and Microsoft is betting people will be open to it.

Let’s be clear: The Windows operating system is still important to Microsoft. Windows 10 alone, the most recent version of the OS, is installed on more than 800 million devices around the world. And at Build, there will be plenty of talk about Microsoft 365, the company’s relatively new umbrella term for Windows, Office, and enterprise security tools. Like any other company that has been selling software for more than 30 years, Microsoft has had to retool its strategy as the world has shifted from shrink-wrap software to downloads to cloud-based subscription services.

“The old way of working is not working any more,” says Jared Spataro, the corporate vice president of Office and Windows.

But it is Microsoft’s cloud service, Azure—which competes directly with Amazon’s AWS—that is the fastest-growing division of the company’s business. Even if Azure’s growth has slowed a bit in recent quarters, it generates billions for the company each year. (Microsoft doesn’t break out Azure-only revenue, but the whole commercial cloud business generates more than $23 billion annually.) Nadella told me that one of the biggest announcements at Build this week will be tied to Azure, and it will reinforce his oft-repeated mantra of “the cloud and the edge.”

“For the first time we’ll talk about this very big, at-scale opportunity we have around business process automation,” Nadella says. “Take the internet of things. The classic thing that happens with the internet of things is, you put in a sensor, you connect the thing, you suddenly start saying, ‘Oh wow, I can predict when this is going to break.’ But the business now needs to get the right technician with the right skills to fix it before it breaks. That’s a business process. It’s a field service.” Those businesses need a platform, Nadella insists, and that’s where Microsoft wants to insert itself.

One way to convince people to pay for recurring services is to promise them recurring improvements. Again: It’s telling them that something is broken, and that software can fix it.

Part of this attempt to create more opportunities is to fix broken workflows with a new project called Fluid. It’s the brainchild of technical fellow Steve Lucco, who has been working on Fluid, codenamed Prague, since 2016. It’s a new framework based on web technologies that was designed to break down the silos of applications, to stop us from jumping from one to another while we’re trying to get work done, or even from tab to tab.

It could also be seen as something of a defensive move for Microsoft, since the apps people are switching between on their PCs include work apps like Slack and Zoom and Salesforce and Trello. If you can offer an experience within Microsoft’s own software that makes it stupidly easy to keep working in Office or Excel or Teams, all running on the web, then maybe you keep those customers loyal to Microsoft.

Microsoft uses mind-numbing terms like “componentized” and a “distributed document model” to describe Fluid. In practice, it means that you can be working on a paragraph or table in Word on the web, decide that a portion of it needs editing, highlight that portion of the document and drop it into the Teams app (Microsoft’s answer to Slack), and it’s instantly editable. As your colleague alters the text within Teams, it also updates in the document you’re working in.

You can take a group of cells in Excel, share them with your coworker in another Office 365 app, and they can work on just that component of the project. As they’re doing so, the original document will be updated. Windows Ink projects, or those that support drawing with a Surface Pen, will also work like this.

While this is also in some way part of Microsoft’s move to “openness,” Microsoft won’t say whether Fluid is technically open source. At the start, only Microsoft’s own apps will work within the framework. Lucco says the intention is to eventually have both first-party and third-party apps offer Lego-like components in Fluid, and he mentions Trello specifically. It will work on all devices, not just Windows machines. And a senior program manager at the company insists that Microsoft has made it architecturally easy for developers to work within Fluid. But it will take time to weave it all together, they say.

“In the past we had a homogeneous approach to our stack,” Nadella admits. “But I feel like right now we are API-ing every layer, celebrating any use anywhere and knowing we’ll have more opportunities in the future. One thing I’ve learned at Microsoft is, look, platform companies are best when they can create more opportunities for others.”

Microsoft’s new browser might just be the most open thing the company plans to show off at Build. It’s not entirely new; the company revealed last December that it planned to launch a new browser, and developer versions of it have already been in use.

But even this new browser’s existence is kind of jaw-dropping, especially for those who remember the days of a monopolistic Microsoft, one that wanted to insert proprietary elements into its browser and convince users that they needed that browser in order to run Office optimally. Even more recently, Microsoft was called out for trying to dissuade Windows PC users from using anything but the Edge browser on their machines.

Enter the new browser, the one that’s built on Chromium. Yup: Microsoft’s new browser is built on Google’s open source technology. The company is phasing out Edge, which still doesn’t claim as much market share as Internet Explorer, the old Microsoft browser, and conceding defeat to Chrome, the most popular browser in the world.

Phuc Pham

Though Joe Belfiore, a longtime Microsoft executive who runs the “essential products” group—Windows 10, browsers, OneNote, and Microsoft’s apps on mobile—doesn’t see it as defeat. He sees it as a better allocation of resources and “a significant leap forward in compatibility.” Microsoft’s Edge browser was spun up as a distinct thing for the launch of the Windows 10 operating system, but it was still using a proprietary browser engine (EdgeHTML) that limited compatibility. If you’re a website developer using a Mac, you basically couldn’t test how your app would run on the Edge browser.

Belfiore’s team went through cycles of scrambling to match the compatibility of other browsers. “And then we made a decision that it would be better if we switched to open source,” he says. Belfiore insists this will help the whole browser market and, ultimately, Windows. He cites battery efficiency and security as examples of this—as they implement these in Microsoft’s own browser, they’ll be shared more broadly with the Chromium community.

The new Edge browser on Chromium is very … Chrome-y. It looks like Chrome. (Belfiore says it’s far from finished and its design may change.) There are three new browser features in particular that Microsoft will show off at Build, including a search function that lets Chromium Edge users search for onerous work tools, like your expense system or time-off request app, through the browser. There are redesigned privacy settings, including a “Strict” setting that blocks malicious trackers, blocks potential trackers, and limits ads to the point where it will inevitably break some sites.

There’s also a new “Collections” tool that collates web info and formats it for you. Say you’re doing research for a paper: Edge on Chromium lets you drag images, text, and anything else you find interesting into a sidebar, then generates a document for you with all of the content formatted and with citations at the bottom. Of course, it generates a Word document.

I ask Belfiore about what appears to be Microsoft’s embrace of openness, and whether he feels the company is behind in its focus on the web. “I think we have gone through this shift where at one point in our history, the computing world was largely defined by Windows PCs. And that’s not the world we live in anymore,” he says. “This is all a pragmatic pivot for us.”

Some of the other new things Microsoft plans to roll out across its software this year are centered on search and AI. Search will be coming to applications within Microsoft Office. In the example I saw, someone putting together a document on HVAC installations could type in a related phrase in the new search bar in Word, and the results would include earlier files, images and specs from the web, and relevant contact information.

Sumit Chauhan, the corporate vice president of Office, says the new search bar in Office 365 is leveraging Microsoft’s existing “graph,” a massive database of workplace activity. “It’s not a new thing; we’ve been working on this for a while,” she says. “But it’s at a maturity where we’re talking about it in a more public way now.”

AI is a much more loaded topic for Microsoft. This is partly because it’s something the company clearly feels it has to offer to people at the application level, like in Word and PowerPoint and Excel. But it’s also because Microsoft needs to sell it—hard—at the enterprise level.

When it comes to AI features in the Office 365 suite, people both inside and outside of the company suggest that Microsoft is behind competitors—namely, Google. Chauhan disputes this, saying she believes Microsoft is ahead of Google in applying AI to productivity software. “You will see a lot of flashy demos in AI these days, and one of our goals is not to do that,” she says.

Still, some of the intelligent features that are going to start popping up in Office 365 exist elsewhere. Take, for example, a new “Refine Your Writing” option within Word. Opt into that and Microsoft’s machine-learning models will scan for clarity, conciseness, formality, even inclusiveness. (Word will soon flag phrases for you like “gentlemen’s agreement” and even suggest changing the word “housewives” to “homemakers,” or some other word not loaded with gender implications.) Other software makers have already utilized these kinds of tools, but Chauhan notes that Microsoft will ship this across 90 different languages. In the world of AI, scale really does make a difference.

Nadella says he is “blown away” by the features in Office that are using language-specific machine-learning models. But the most interesting thing to him is when business customers use Azure machine learning to power their own giant systems. Take Starbucks, he says: They’re powering their coffee recommendation system using Azure’s machine learning. “That doesn’t mean we’re not going to do our own AI in our own apps, but I’m more in the camp of, let’s truly democratize it,” Nadella says.

Part of that democratization means recognizing that AI talent exists outside of the tech bubble, Nadella insists. “I think we’ve gotten to a point where we feel like, ‘OK, all the great innovation is going to happen up and down the West Coast of the United States and that’s it. The rest of the world should not worry about this.’ No, no, no,” he says vehemently. “These engineers at Starbucks are AI engineers … They are data scientists or engineers who are going to take as much pride as any engineer at Microsoft or Facebook or Google. My goal is to stop this nonsense of people thinking all the AI talent is only in a few companies.”

It does not escape me that minutes before I was scheduled to meet with Nadella, I was being shown a demo of how his company’s software is being designed to eliminate gender biases.

Last month, a group of Microsoft workers showed up to an employee meeting with Nadella to protest the company’s treatment of women. It was a pivotal moment for a group of women who had begun sharing stories of discrimination in a company email thread starting back in March, but for many involved, the alleged discrimination has gone back years. “We are fed up,” one employee told WIRED’s Nitasha Tiku. “I know there are James Damores at Microsoft, they just haven’t written a memo like he did,” referring to the former Googler who wrote a screed questioning women’s abilities in tech.

Lots of companies in Silicon Valley, and in tech more broadly, have diversity problems, not just around gender but around race and class. That is the reality. Last year Microsoft reported a small uptick in its number of women employees, credited to a joined workforce with LinkedIn, which Microsoft acquired in 2016. But the company still fares worse than Google, Facebook, and Apple when it comes to representation of women and people of color.

Nadella admits that Microsoft has a problem, though he initially characterized the company’s cultural issues as part of broader societal issues. “I mean, the reality is that the lived experience at Microsoft is not where it needs to be,” he says. “And the question is, is the management team, the leadership team, and every individual at Microsoft doing their part to improve the lived experience for women and minorities to really make sure this is the place where they can do their best work?” He goes on to say that he expects to be scrutinized by employees, and, if the company doesn’t get things right, by the broader community.

The next obvious question, then, is how do you change it? If one of the world’s most important tech companies is offering solution after solution to fix the work lives of its enterprise customers, how can it be doing such a poor job of fixing the workplace issues within its own ranks?

Nadella says he is a proponent of change by first measuring the problem. He also mentioned incentives, saying that the compensation of senior management and even his own compensation is directly tied to goals around having more diverse representation in the company’s workforce. But ultimately, he says, fixing diversity issues will require an “awakening.”

“Ultimately you have to have that awakening that human dignity, decency, and that empathy for your coworkers is key,” Nadella says. “In this industry, we’ve had for far too long, I would say, role models of the talented jerk. That’s done.”

Transformations don’t happen overnight. But Nadella says he hopes that five or 10 years down the road, when he looks back, he’ll be most proud of changes around diversity issues. “Not the technology—the technology we’re working on will be very prosaic five or 10 years from now. But the thing that won’t feel prosaic will be, this is a company that changed,” Nadella says.

Whether Microsoft does put that change into effect remains to be seen. You might even call it a question that’s open.

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