Microsoft CEO Satya Nadella has some words of advice for companies navigating today’s tech landscape: own the process, be original and choose your partners wisely.
These insights give a look into how Nadella continues to reshape Microsoft during his time as CEO. Standing out from the pack — with new devices, cloud services and productivity tools — seems to be a key goal, and the company has been willing to cut bait in areas where they didn’t have unique offerings.
Opening Microsoft’s annual Ignite conference in Orlando Monday, Nadella highlighted BMW, which is building its own digital assistant into its cars. While it is using Microsoft cloud and artificial intelligence tools to build the experience and allowing third-party digital assistants on the platform, BMW didn’t out-source the work to someone else and is controlling the process, moves Nadella praised.
“They’re not letting anybody else just disintermediate them,” Nadella said. “That’s really I think strategy at work. They’re going to allow access to Skype, they’re going to allow access to Cortana, they’re going to allow access to Alexa, but it’s all going to be under the terms of their brand experience. That to me is how every consumer brand needs to be thinking going forward to remain relevant.”
In setting the scene for the tech conference for IT pros and developers, Nadella emphasized a concept called “tech intensity.” It combines adopting the latest technology from others while also emphasizing original work that makes a company unique.
Nadella pointed out the potential pitfalls companies face in pursuing this strategy. He advocated looking closely at the competitive landscape when deciding how to focus resources. It’s not worth it, he said, to build tools and products already made by others if there isn’t an opportunity to stand out.
“If you spend a lot of your energy and time and money building some capability, thinking that’s unique to you, except it’s available as a commodity from someone else, then that could be a big mistake because you would have wasted a lot of time and energy and money,” Nadella said. “So you want to make sure that you are focused on the things that truly make you unique.”
Choosing the wrong partners is another potentially huge strategic mistake, according to Nadella. In what appeared to be something of a shot at its local frenemy Amazon — and the dynamic of Amazon Web Services customers competing with the tech giant’s other businesses — Nadella warned not to rely heavily on companies that could also become rivals.
“If you are dependent on a provider who through some game theory construct is providing you a commodity on one end, only to compete with you on another end, then you can be making another strategic mistake. So picking your partners well is where I think the strategic definition of being smart will really come through.”
Amazon and Microsoft have developed a unique relationship in recent years. The two tech giants are collaborating in some places — chiefly the integrations between the digital assistants Cortana and Alexa.
But they are also competing, mainly in the cloud computing world. Microsoft has positioned its Azure cloud offerings as an alternative to Amazon Web Services, specifically in wooing retailers battling Amazon’s e-commerce branch.