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Microsoft CEO Satya Nadella, left, talks with Starbucks CEO Kevin Johnson, himself a former Microsoft executive, at the Microsoft Alumni Network’s annual Reunion with a Purpose event on the Microsoft campus today. (GeekWire Photo / Todd Bishop)

Will Microsoft’s quantum computing technology be a hardware division unto itself, like Xbox, or something that the company offers to original equipment manufacturers (OEMs), like its traditional Windows business for PCs?

“It’s not OEM-ready yet,” joked Satya Nadella, as the crowd laughed at his significant understatement in response to the question from a former Microsoft employee. Quantum computing — which uses atoms and molecules for processing and memory to exponentially boost computing power — is still largely theoretical, but Microsoft has a high-powered team pursuing breakthroughs in the field.

“We’re still in the early stages,” Nadella said. “We have taken a very different approach. Even in the next year there will be a couple of gimmicks that will happen.” But those short term gimmicks are “not building a general purpose quantum computer,” he said. “We have taken an approach saying, look, let’s go for the general-purpose quantum computer, because that’s the prize, as opposed to worrying about the short term.”

GeekWire was there as Nadella and Starbucks CEO Kevin Johnson, a longtime Microsoft executive, made a rare joint public appearance at the Microsoft Alumni Network‘s “Reunion with a Purpose” on the company’s Redmond campus Thursday morning, recognizing the philanthropic work of former Microsoft employees. Honorees included 2017 “Integral Fellow” Kevin Ross, founding chairman of Washington FIRST Robotics, now FIRST Washington.

The pairing of Nadella and Johnson wasn’t random. Johnson was once Nadella’s manager, but the Starbucks CEO likes to say that he now works for Nadella, because the Microsoft CEO is also on the Starbucks board.

Microsoft executive Rich Kaplan, the Microsoft Alumni Association’s board trustee and chief evangelist, introduced Nadella as a “future alumni,” drawing laughter from the crowd. “Everyone is a future alumni!” Kaplan quickly added, promising that he wasn’t making an inadvertent disclosure about Nadella’s near-term future.

The event started with a traditional Starbucks coffee tasting — Reserve Pantheon Blend No. III — which Starbucks coffee guru Leslie Wolford described as evoking “toasted almond, graham cracker and bittersweet chocolate.”

Nadella had a more simple assessment: “It’s great coffee,” he said with a grin, to more laughter.

Most in attendance were longtime Microsoft employees, now retired or working elsewhere after helping to build the products and businesses that made Microsoft one of the world’s most influential companies. Nadella has reinvigorated Microsoft’s culture and reoriented its strategy since becoming CEO in 2014.

“It’s a very different company for those of you who have been gone for a while,” he told the crowd.

The discussion largely followed the themes in Nadella’s book, “Hit Refresh” — currently No. 4 on the New York Times Best Sellers list — including Nadella’s personal story, the transformation of Microsoft, and the future of technology. In the book, Nadella identifies three big future trends: mixed reality, artificial intelligence and quantum computing.

Nadella pointed out to the crowd that the quantum computing initiative was actually begun some 10 years ago by former Microsoft technology and research leader Craig Mundie. It makes sense for Microsoft to pursue quantum computing, Nadella said, given its billions of dollars in annual capital expenditures on data centers.

“Most people think about our hardware business as our device business,” he said. “Our hardware business is our data center business, in a big way. And so when you are essentially spending that level of money building the next generation of compute, that means you have permission to look for what is the next big thing. It’s kind of like a network operator who’s doing 4G today, thinking about 5G or 6G, and so to me, that’s how I think about quantum as an investment.”

Nadella cited the challenges that quantum computing could crack: “There are many unsolved problems, whether it’s that enzyme that can absorb the carbon, or even modeling the natural enzyme in food production.”

Looking at Johnson, he added, “Think about all the things we can do with coffee!”

“I can only imagine!” the Starbucks CEO replied.

Microsoft CEO Satya Nadella at the Microsoft Alumni Network’s annual Reunion with a Purpose in Redmond, Wash., today. (GeekWire Photo / Todd Bishop)

Nadella concluded his remarks on the future of technology by acknowledging that there may be natural skepticism about Microsoft’s chances of reinventing computing again.

“To those of you who say, ‘Well, is Microsoft capable?’ — when you look at what we’re doing with HoloLens on one side, and what we see as the future of mixed reality what we’re doing at our data centers every day at this scale, or quantum, we have high ambition on a lot of these projects.”

Editor’s Note: Reference to Microsoft Alumni Network corrected since original post.

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