Remarks by Jean-Philippe Courtois, president, Microsoft International, and Scott Guthrie, executive vice president, Microsoft Cloud and Enterprise Group, at Convergence EMEA 2015 in Barcelona on Dec. 1, 2015.
ANNOUNCER: Ladies and gentlemen, please welcome President, Microsoft International, Jean-Philippe Courtois. (Applause.)
JEAN-PHILIPPE COURTOIS: Good morning. Good morning. Buenas Dias.
I hope you enjoyed day one. I hope you had a great time as well after the main session yesterday visiting the Experience Hub, but also taking advantage of this big community to connect over the cocktails, during the dinners.
I can tell you I had some amazing customer conversations myself yesterday. I wanted to share a few stories with you before proceeding with the agenda.
Actually, I got a fascinating discussion about data, unleashing the power of data with big product companies and banks, and translating that into risk management.
One example, which is fascinating, is a discussion we had with a pretty big bank on the way we could apply the machine learning capabilities to basically analyze a lot of documents, maybe even conversation on the trade floor, to trigger compliance processes. That’s a big deal for many situations.
A second great example was a continued dialogue, continuous dialogue I had with Ghislaine that you saw onstage yesterday from Heineken. We were talking about the power of the sales excellence in mobility applied to the business. And I was extending the same discussion with a few other big consulting organizations, banks as well, adopting and combining the power of CRM Online, Office 365, in the way that changed the culture of their salespeople, and the nature of the conversation with their customers.
And the third example was actually with big utility companies, the Nordics, where we had a great dialogue about the way they could and they can actually think about connecting their physical assets like nuclear plants, like wind turbines to make a much more efficient business model and be much more competitive in a very competitive market they have in a few countries.
So those are exciting discussions, and I’ve got actually a call for action for the Microsoft people in the room, because we’ve got a few Microsoft people, too, to make sure they continue the dialogue with our customers on the business outcomes, and what matters the most to our customers, and bring the best capabilities of our engineering teams, of our services teams together, to actually do something about it in the coming days and weeks. So that’s my commitment to follow through with the team.
You know, in order to achieve all of that, we need to build that intelligent cloud, and today is going to be all about building that intelligent cloud and seeing it through.
And one condition of success that I’m learning every day in every customer conversation I have around the world, not just in EMEA but in Asia, in Latin America, in the U.S., is trust.
And the way we think about trust and trusted cloud as a company is about four main capabilities forming pillars. It’s about driving security in everything we do. It’s about embracing privacy to again offer the users the terms and the choice to do things and put that in their hands. It’s about compliance, embracing compliance, by industry, by country, by process. And finally, last, not least, it’s about really opening up, providing full transparency in the way we operate our cloud, in the way we actually do things one country at a time.
And that’s exactly what we’re going to do actually this morning, and we’re going to expand on that with a very special guest I’m going to have onstage in a couple of minutes.
But before we have that person onstage, I would like to roll a video to give you a sense of the vision of digital transformation of the EU. So please let’s roll the video.
(Video segment.)
JEAN-PHILIPPE COURTOIS: So in order to have a dialogue on that trusted cloud and digital transformation of Europe, I’m going to have onstage actually Robert Madelin, who is the special innovation, senior innovation advisor to the EU Commission. Robert Madelin has been working actually in many capacities at the EU level since ’93, and at a DG level since 2004.
He’s been handling things diverse, I mean, very diverse things such as trade investment, Asia-Pacific trade services, biotech, but also food safety innovation, consumer protection, and more recently obviously over the last couple of years he’s been very involved with Internet governance, telecommunication, media policy, and digital transformation.
So please give a warm welcome to Robert Madeline. Robert. (Applause.)
Welcome Robert.
ROBERT MADELIN: Thank you.
JEAN-PHILIPPE COURTOIS: Thank you so much for joining us for this conversation.
Robert, we watched this video, which was very positive view of the future in the EU. How can you relate to that? And what’s your personal perspective on that?
ROBERT MADELIN: So the picture I hoped you saw was that Europe sees a digital future changing everything for everybody. Secondly, and I can confirm this, European innovators both in the market and before the market want to be creating with partners and for the rest of the world the new generations of technology. We’re not just going to be using it.
There’s a third point that the video maybe didn’t emphasize, which is if you look at the data in detail, Europeans are getting ready for the Internet future, but we still have to build the human capital.
So 80 percent of Europeans are more or less on the Internet, but 40 percent of Europeans really don’t have the skills right yet. And I think building human capital from average citizen capacity right up to the high-end user, that’s the next big challenge.
JEAN-PHILIPPE COURTOIS: Robert, I know that you meet with a lot of different constituencies in your role, I mean, not just policymakers, but business people as well. What is your thinking about the industry’s impact? Where and which industries do you see actually benefiting the most from the digital transformation across EU and actually across many more countries where you travel to.
ROBERT MADELIN: So I think, let’s say, the opportunity lies outside those who think of themselves as tech industries and at the small end of the business size rather than the big. So big, tech-centric companies get it, but there’s still a huge opportunity if we can make scalable offers downwards, if I can put it like that, so that SMEs and their customers can also benefit. But it’s all sectors, absolutely everyone.
JEAN-PHILIPPE COURTOIS: Well, you know, I was just flying from Paris two days ago. And I must say, I was lucky to get a plane because the traffic was pretty much disturbed with this big event called COP, COP21, we had a number of heads of state, a lot actually coming together.
There was this big topic, clearly, on stage, which is sustainability. Sustainability is a big deal for many countries, for many businesses across the world. How do you connect the dots between, again, that sustainability theme and really big, big issue with this digital transformation and this hyper-connected world? How does it come together?
ROBERT MADELIN: I think it comes back to the word you were just using about trust. So what is it that makes individual citizens trust the market, the society, the corporates with whom they interact? It doesn’t just mean that they read the financial accounts. It doesn’t just mean they don’t see bad stuff in the newspapers. It means that the day-to-day interaction feels easy for them. So you are helping me do this easily. And, secondly, I understand that the big players out there are helping the whole planet, all the solutions.
And I think that not just COP21, but what the U.N. put out in September, it invites all of us, whether administrations or companies, to look again at sustainability issues, which are now for everyone, not just poor countries, not just development agencies, and see how they interact with what we do. Because however far we think we are from those issues, they are real for our organization.
JEAN-PHILIPPE COURTOIS: So sustainability is one of those big issues on the triple bottom line as well for many businesses, but you know, as we are having again these discussions and having that conversation all the time about security, privacy, compliance, transparency, I know there are a lot of policy discussions going on at the EU level, and I know you’re part of many of those deeply.
Can you inform us about the way we should think about that both for Europe, but actually beyond Europe? Because I can tell you, the same conversations happen in Asia, in the Middle East and Africa, in Latin America and the U.S. So what can we learn from that conversation? And what is the advice in terms of the policy, changing environment for businesses in this room?
ROBERT MADELIN: So I think that it probably won’t surprise people here to know that bureaucrats face the same problem as corporates, which is we have decisions made by people who may not be up to speed with the latest technology.
JEAN-PHILIPPE COURTOIS: Yes.
ROBERT MADELIN: So that’s the first thing to bear in mind, that politicians and senior officials are trying to understand what is Blockchain, for example? You know, if I’m an interior minister, after the terrorist attacks, I say can I stop crypto currency? And I have difficulty understanding that the answer might be no.
But the good news is that I think in Europe, as everywhere else, we understand that we need to be pro innovation. We understand that regulation has to be ready for the Internet. And we understand that in an Internet-of-Things world, actually, the way you adjust society can be easier. It doesn’t have to be heavier.
Now, specifically, stuff like safe harbor for data across the Atlantic, global leadership on cybersecurity. I think you’ll see also the Juncker Commission stepping up to the plate in the weeks, maybe after Christmas more than before, and I’m looking forward to deals somewhere January/February that will set the ball rolling again.
JEAN-PHILIPPE COURTOIS: Could you explain a little bit on the safe harbor question? Just to make sure everybody is on the same page, what is at stake? What could be done differently? And what is your advice given the uncertainty to many businesses in this room?
ROBERT MADELIN: So I think that it’s partly for lawyers and it’s partly for marketers.
JEAN-PHILIPPE COURTOIS: Yes.
ROBERT MADELIN: For the lawyers, the issue is can I comply with the requirements that give European citizens ownership of and control over their personal data.
And for marketers, the question is: Can I get my customers to understand in a really intuitive way that what they’re doing with me is not affecting the integrity of their personal identity? So you have to look at it at these different layers.
Safe harbor, so that’s international public law.
JEAN-PHILIPPE COURTOIS: Right.
ROBERT MADELIN: But it’s actually an everyday issue for companies.
JEAN-PHILIPPE COURTOIS: Yeah, just maybe a quick comment on my side to make sure you all understand that if you are using — because 73 percent of the people in the room are using some forms of the Microsoft cloud today. You are safe and compliant with safe harbor, by the way. Okay? So whatever happens next, we don’t know yet, Robert, but we should be clear that it actually works with the EU Model Clause, and we are taking care of that and we are working diligently with policymakers around the world to make sure we evolve with the policy discussion as well.
ROBERT MADELIN: Right. And if I can just add something.
JEAN-PHILIPPE COURTOIS: Yes.
ROBERT MADELIN: This is where innovation and law and corporate invention come together. So we have a public-private partnership on cloud, not just for the B2C space, not just for business practices, also for science and also for the generation of geospatial data and how do we save the planet from the floods? As you saw on the video.
JEAN-PHILIPPE COURTOIS: Yes.
ROBERT MADELIN: So I think that’s the next step to show that the cloud is not just a threat to my data, it’s actually a way of doing things more efficiently in all segments of my life.
JEAN-PHILIPPE COURTOIS: As we still have some more time, Robert, I’d like us to discuss a little bit cybersecurity. What is the role of the EU institutions? What is the role of the national states in the EU and beyond? And what is the role of businesses when it comes to cybersecurity? What is your perspective on that, and what should we expect from the different constituencies?
ROBERT MADELIN: Right. So one of the things that most people want from their public authorities is to keep them safe. In the cyberage, cybersecurity is part of what we look to the policemen to offer us. We also have to play our own part. So it’s an issue where at the European level, we try to make sure citizens remember to shut their windows, have the right antivirus software, but we’re also trying to cooperate between companies and authorities to deal with cyberattacks, to learn from each cyberevent. And, finally, we see this is a big business opportunity.
JEAN-PHILIPPE COURTOIS: Yes.
ROBERT MADELIN: If Europe can be at the forefront of cybersecurity capacity, we think there’s a market out there, and we would like our share.
JEAN-PHILIPPE COURTOIS: Any discussion you’d like to share with us in terms of the sharing the EU has with some other, I would say, regions in the world? Because in many ways, the unique challenge the EU has to get so many different countries to agree on a set of policies to define a future has been always kind of amazing for a European citizen like myself.
But when I go and visit countries in the Middle East and Africa and Asia, the same issues actually are at stake. So what is it you see the EU either learning from or sharing to other countries which could be beneficial to have a better global world? As you’ve been tackling trade and many big, big economic issues, where do you see the role of
policymakers beyond frontiers, basically?
ROBERT MADELIN: So when I started working with the European Commission 20-something years ago, there was a question for economists: Does global economic interdependence exist?
I think today we know that in the Internet world, the economy is irreversibly global. And what that means is everybody has to come together to fix the rules.
At the same time, we have a bit of a road block in world rule-making discussions because I think since the end of the cold war, we see the tectonic plates shifting, which big countries are in charge? So that’s a challenge. But I think from the European Union perspective, we still want to do it in a cooperative way with everyone. And you see that in Internet governance, you see that in trade liberalization, in investment rules. It’s a tough challenge.
JEAN-PHILIPPE COURTOIS: It is.
ROBERT MADELIN: But I think that corporate and public opinion should get behind a peaceful advance to meet that challenge rather than everybody making different rules that overlap and get in the way.
JEAN-PHILIPPE COURTOIS: That’s certainly the way we would like to see it evolving across the world, for sure.
Robert, maybe the last question, and you can expand because you’ve got such a diversity, again, of people, businesses, industries, countries in this room. What is your advice? What is the wisdom you can share with them on what they should do next or what they should maybe not do, actually, given some of the big issues we discussed — cybersecurity, sustainability, evolving policies, safe harbor, question mark, what’s going next? What should they do as a business?
ROBERT MADELIN: So I think the challenges facing any organization in the 21st century, whether for profit or not for profit or public administration are the same. There are no frontiers either between your sectors or within your territories. These frontiers are not as impermeable as they used to be.
And, therefore, you have to embrace change in a more open way, perhaps, than in the past. People like us don’t necessarily know what the future is going to hold. We may not know where our customers’ customers are going to be in the next 10 years, and so the only safe way forward, I think, is open innovation. Open innovation means we have to get the customer’s customer into our conversation. And that’s true whether it’s a political customer for someone like me, or a corporate customer for someone like you.
It’s a big challenge because we like to think we know best.
JEAN-PHILIPPE COURTOIS: It is.
ROBERT MADELIN: We like to decide and propose, but actually more listening will be a success factor.
JEAN-PHILIPPE COURTOIS: I think I love that line of wisdom in terms of the customer intimacy, the listening. I’d like all of you to give a big, big, big, big hand for Robert for sharing his wisdom with all of you, and make the best out of it. So thank you so much, Robert, and looking forward to more dialogue on that. (Applause.)
ROBERT MADELIN: Thank you. Thank you so much. Thanks.
JEAN-PHILIPPE COURTOIS: I’d like to actually introduce the next segment, the next speaker. We’re going to discuss tomorrow, again, real customer cases. So, again, more customer intimacy on stage with Susan Hauser and Anita Holloway (ph.).
But, today, as I said, we’re going to have a real end-to-end perspective on our intelligent cloud. And to do that, we’ll have on stage in a minute Scott Guthrie. Scott Guthrie is our executive vice president running the Cloud and Enterprise business for Microsoft. He’s been basically filling some big shoes, the shoes of Satya Nadella before he was promoted to the CEO role.
And I think you’ll see the passion that Scott has in terms of driving huge innovation across that cloud platform to make it very meaningful for everything you do as a business.
But before he comes on stage, I’d like to actually roll a video. And I’d like to wish you, again, a great session today. And looking forward to meeting with many more of you today and later on. So let’s roll the video, please.
(Break for video segment.)
ANNOUNCER: Ladies and gentlemen, please welcome Executive Vice President, Microsoft Cloud and Enterprise Group, Scott Guthrie. (Applause.)
SCOTT GUTHRIE: Well, thank you very much. It’s great to be here in Barcelona with so many prominent business and technology leaders. The opportunities for all of us in this room to leverage technology, to dramatically transform our businesses has never been greater.
And I suspect the competitive pressures that all of us feel to continually accelerate our businesses and find new sources of customer value have also never been more intense.
We now live in a mobile-first, cloud-first world. And at Microsoft, our focus is to enable customers and partners to transform their businesses in this new world by delivering on three core ambitions.
Yesterday, Chris talked about the work we’re doing at Microsoft to reinvent productivity and business processes. Today, I’m going to talk about the work we’re doing to build the intelligent cloud and how it will enable you to accelerate your businesses.
I’m fortunate today to have three great companies who will be joining me on stage to share their stories about how they’re using the cloud to enable digital transformation and drive significant business outcomes.
Each of these companies is a great example of how the successful implementation of cloud-based technology can really accelerate the creation of business value, and I hope each of them inspires you on ideas in terms of how you can take those same approaches to your own organizations.
Now, to have a truly customer-focused organization, we all know that we really need to understand our customers at a deep level. And this has always been challenging. It’s become even more so, though, as our markets have broadened and as our organizations have gone global.
Over the last 30 years, software has been a great way to really close this gap between your customers and your businesses, and the cloud is really going to enable us to accelerate the closing of this gap even further.
You know, with the emergence of Internet businesses, you know, we were able to build websites that enables a bi-directional conversation with our customers. You know, mobile-based solutions enabled us to take that much further. You know, with a mobile-based app, as an example, your business now can literally reside in your customer’s pocket.
And now with the cloud, we enable you to scale and grow those solutions much, much further and integrate new technologies like machine learning and analytics to enable you to really understand your customers’ intentions and interactions at a much deeper level than ever before.
And this really enables you to create a customer-centric organization that enables you to really focus on their goals and objectives and build loyal fans everywhere.
You know, we started using software initially 30 years ago and more now to really run our businesses more effectively. And pretty much every organization now of any size has a system of record that they use to automate business processes.
You know, in the same way that the cloud enables us to really understand and engage with our customers better, the cloud’s also going to enable us — enable you to fundamentally run your business operations better as well.
You know, the cloud enables you, again, to use things like machine learning and advanced analytics to gain deeper insights into how your businesses are running.
You know, one sort of interesting statistic, there will be more than 20 billion Internet-connected devices in the world in just four years. You know, integrating the additional data and insights from these billions of IOT devices deep with your business processes, you know, will transform your organization’s operations even further.
Things like manufacturing and service quality, supply chain efficiency, and field service are just a few of the processes that are going to look radically different over the next couple years because of this.
And perhaps the most powerful aspect that the cloud enables is the ability for us to embed software and technology right into our products and services. And this really enables you to transform how your organizations deliver value, enables you to create new business models, and really empowers you to disrupt others in the market.
And the three companies that are going to be joining me on stage this morning are going to talk to each of these three digital transformation opportunities and share how they’re using the cloud to really accelerate their businesses.
Now, the cloud is really a generational shift in computing for everyone, and it represents major changes for everyone, Microsoft included. And pretty much every organization over the next few years is going to need a digital strategy for how they move from where they are today to really take advantage of what the cloud offers and deliver on these promises.
Organizations are going to look to adopt cloud-hosted business solutions to really reinvent business processes. They’re going to extend their infrastructure to use the public cloud to achieve better agility and cost savings. And they’re going to look to take advantage of higher-level services like machine learning and advanced analytics to engage better with customers and really transform their businesses at a substantial level. And it’s really the combination of all these three elements that enables real business transformation.
You know, Microsoft is unique in terms of the offerings that we provide across all these different dimensions. Microsoft now offers the most widely deployed portfolio of business — cloud-hosted business solutions out there. You know, we provide a comprehensive set of capabilities across Microsoft Dynamics CRM, NAV, and AX, with Office 365, with Power BI, and with PowerApps.
And with our Enterprise Mobility Suite, we now enable IT to securely deliver and manage these solutions as well as more than 2,600 other cloud-based offerings from our partners across any mobile device, and do so in a way that doesn’t really compromise the end-user experience, while at the same time keeping their company secure.
In addition to these business solutions, Microsoft also offers a comprehensive set of cloud infrastructure and higher-level services that enable organizations to become even more agile and differentiate their business solutions much further. With Azure and Azure Stack, we provide a consistent hybrid cloud platform that can be used to run any workload, whether Windows Server or Linux-based, and do so both in the public cloud and in private cloud deployments. And on top of these infrastructure services, we then provide a rich business application platform.
Our Cortana Analytics Suite enables you to store and gain insight from any volume or variety of data using our powerful BI advanced analytics and machine learning tools.
Our Azure App Service offering combined with our Visual Studio Developer Services enables you to rapidly build any application and use it to target any device with unmatched developer productivity.
With our Azure Internet of Things Suite, we are enabling organizations to integrate data and functionality from literally billions of devices out there.
With our Azure Active Directory Identity Service, we now enable organizations to build all these solutions in an incredibly secure way and manage identity in a consistent way across employees, across partners, as well as across end customers and users.
No other company out there offers the breadth and the depth of what the Microsoft cloud provides. Salesforce provides SaaS solutions, but doesn’t offer infrastructure or higher-level services. AWS provides infrastructure, but doesn’t provide business solutions. It’s really the combination of all these capabilities that we think enable organizations to take their companies to the next level.
At Convergence this week, you’re going to hear from lots of organizations that are deep into this journey to the cloud and using the Microsoft Cloud to really transform their businesses.
These organizations span literally every industry. And they range from the very smallest of organization size to the very largest out there.
Pandora is a great example of one of the companies in the retail consumer goods industry that’s using the Microsoft Cloud to really enable them to provide the right product at the right price at the right place at the right time to their customers.
The City of Barcelona here is one of the many organizations in the public sector that are using the Microsoft Cloud to increase the number and quality of citizen services at minimal cost.
WestPac is one of the great companies in the financial services industry that’s using the Microsoft Cloud to deepen their relationships with customers and create loyal, profitable fans.
And Rockwell Automation is just one of the many companies in the manufacturing industry using the Microsoft Cloud, and in particular, our new IOT and advanced analytics capabilities to drive down costs through increased efficiency of their operations and really create new revenue streams that they can monetize.
And these are just a handful of the great companies in the Microsoft Cloud that are using the cloud to really transform their businesses in substantial ways.
Throughout the week here at Convergence, you’ll hear firsthand from many more, as well as hear about the different journeys that they’ve taken and some of the lessons they’ve learned along the way.
What I’d like to do is actually start off by inviting three of these companies on stage to really share their stories. My first guest this morning has been using the cloud to massively extend the reach of their amazing brand, and more fully engage their customers, which in this case truly are fans.
This organization is very well known all over the world, including here in Barcelona. Although, how should I put it? They get mixed reviews in this town. (Laughter.) But using the combination of Azure, which they’re using to build out their Web, their mobile, and in particular the media streaming, over-the-top video service, coupled with Dynamics CRM that they’re using to kind of store information about their fans and relationships with them. Plus the machine learning capabilities of Cortana Analytics and the business intelligence capabilities of Power BI, they’re really disrupting the traditional sports business model by significantly increasing their marketing effectiveness with much deeper customer insights, while at the same time enabling a much more agile platform that enables them to engage their fans in a much richer way.
This video here will give you a sense of what they’re doing with it.
(Video segment: Real Madrid.)
SCOTT GUTHRIE: Please give a warm welcome to the digital director from Real Madrid, Rafael de Los Santos. (Applause.)
RAFAEL DE LOS SANTOS: Thank you.
SCOTT GUTHRIE: Thank you for risking a trip here to Barcelona. (Laughter.) How does it feel to be here?
RAFAEL DE LOS SANTOS: Well, you know, Barcelona is one of the nicest cities of Spain and is the second-largest Real Madrid fan base. So I’m happy to be here. (Laughter, applause.)
SCOTT GUTHRIE: Well, you know, Real Madrid has plenty to brag about, including more than 100 trophies. But, you know, one of the things I know you wanted to do was have an even closer relationship with the 450 million fans of Real Madrid that are all over around the world. You know, maybe you could talk a little bit, how is technology helping you do this?
RAFAEL DE LOS SANTOS: Well, you know, Scott, actually, football is about passion. And Real Madrid wants to bring that passion to every single one of our fans. Technology is allowing us to reach them in a way that they can live their passion their own way with us.
So, basically, connecting through any device at any time anywhere is something that technology is helping us to do in a very easy way. Plus it doesn’t matter whether you are in Madrid or in Kuala Lumpur, technology is always enabling us to reach these fans.
SCOTT GUTHRIE: Great. You know, can you talk a little bit about some of the business goals that you also have around making this closer connection with your fans?
RAFAEL DE LOS SANTOS: Yeah. Real Madrid has a lot of, because of the nature of the business, Real Madrid has a lot of information and a lot of data. But before, we didn’t have a lot of insight.
So we tried a data-driven transformation at Real Madrid. And we wanted to build an analytics system that allowed us to know and understand our fans better in a way that we can create new business models on this journey.
SCOTT GUTHRIE: And I know you used sort of a three-pronged strategy to accomplish this mission. Can you tell us a little bit about that?
RAFAEL DE LOS SANTOS: Well, we knew that we needed to face a digital transformation. So for everyone here in this room, we know that companies, digital transformation has a different meaning.
For us, digital transformation was building a platform that allowed us to connect every single one of our customers through the channels, data channels, that allow us also to know our fans in a better way and communicate with them using our CRM, et cetera.
Then there is the content that we use to communicate with our fans was really, really important. So that was the reason why we built an OTT video platform that allows us to communicate by using Azure Media Services, we communicate with our fans and we broadcast all the content to our fans, taking into account different time zones, different DRMs, different TV rights, different rights on different content.
And last but not least, we wanted to build a platform where we can generate that conversation, generate the engagement with the fan. And that was the reason why we built the consumer app, the consumer app that is available for every single one of our fans through any device no matter what the operating system is, whether it’s iOS, Android, Windows, and if it’s a tablet as well.
SCOTT GUTHRIE: Great. And, you know, this deeper connection with the fans I know is also enabling you to really enhance your marketing efforts. You know, we’d love to hear maybe a little bit about how you’re using that.
RAFAEL DE LOS SANTOS: Well, you know, Real Madrid, we have a lot of partners. We have a lot of sponsors, and now we can help them personalize their marketing to the fans. So in a sense, what happened, I’ll just take as an example, Adidas. When they run a campaign and they throw a campaign with the new jersey of Real Madrid, before it was just a plain campaign that it was the same for everyone.
But now we are able to let Adidas profile people and know people and giving them the chance to personalize that campaign and tailor-make that campaign. So they don’t reach in the same way someone that is in Colombia, that most likely going to be following a different player than someone who is in Portugal who is most likely going to be following Cristiano. So we help them quite a bit.
We also analyze through dynamic social sentiment, actually, we kind of , the different partners that we have, the different fans that we have. So we put that information to the service of our partners.
SCOTT GUTHRIE: Great. So it sounds like it’s fair to say that the Microsoft Cloud is really enabling you to transform your businesses through these rich connections with your fans.
RAFAEL DE LOS SANTOS: Well, that is true, actually. All the tools that we’re using from you guys, Microsoft Azure, Dynamics CRM, all of these tools are helping us to disrupt the traditional football business.
So in a sense, this is giving us the ability to have more passionate fans around the world and engage with them in an easier way.
SCOTT GUTHRIE: Great. So what’s next for Real Madrid?
RAFAEL DE LOS SANTOS: Well, I believe in the years to come, we’re going to be transforming through technology. So we have to be very close to you guys, to Microsoft, and hopefully in the next two to three years, we can add another 450 million to our fan base. (Laughter.)
SCOTT GUTHRIE: Awesome. Thank you so much for joining us today.
RAFAEL DE LOS SANTOS: Thank you. Thank you. (Applause.)
SCOTT GUTHRIE: I think Real Madrid is a fantastic example not just of sort of an iconic brand, but also as you heard from Rafael in terms of how they’re taking advantage of technology really across the Microsoft Cloud platform to kind of really infuse that brand into everything they do, whether it’s the mobile apps, the Web-based applications, taking advantage of Azure for both of those as well as for the media streaming. And then incorporating the advanced analytics, and then being able to operationalize that with our CRM platform, social sentiment, and more. It really enables kind of an end-to-end solution that’s very, very powerful and really impactful from a business perspective.
So as you heard from Rafael, one of the critical technology components of the solution that Real Madrid built is the Microsoft Dynamics CRM offering. And over the past few years, we’ve really tried to transform our CRM offering to revolutionize the CRM market by really focusing on what we call intelligent customer engagement. And we now deliver end-to-end customer engagement capabilities across sales, service, marketing and social with a groundbreaking user interface.
And we’ve also moved to kind of a regular cadence of innovation where we deliver new features every six months with great new enhancements in capabilities. And I’m incredibly excited to announce that our new CRM 2016 release is available for you to start using today. This release delivers groundbreaking productivity improvements, including deep integration with Office 365. And with this release we’ve also embedded machine learning capabilities directly into the product in a very deep way.
And what this means is that you don’t have to hire a data scientist or an analytics expert in order to take advantage of machine learning. With Dynamics CRM we automatically give you these deep machine learning-based insights directly out of the box and enable you to basically take the data that you’re already storing in CRM, gain insights from it, and then easily tune your business processes based on them.
With this release we’re also delivering industry-leading mobile capabilities for phones and tablets, including iOS, Android and Windows-based application experiences. We’re also now delivering full mobile offline support, which enables your employees to be even more productive when they’re away from the office. And with our new Unified Service capability, you can now deliver end-to-end customer service across self-service, agent-assisted, and now also field service capabilities.
And we’re really excited about this release. We really think it enables you to take intelligent customer engagement to the next level. We’re already looking forward to seeing how you use it to transform your businesses.
So we’ve looked at how the cloud can be used to engage customers better. Let’s now look at a company that’s using the cloud to run their business operations even more effectively as well. Caterpillar has been working with ZAP, which is one of our great Microsoft partners to build a solution for Caterpillar dealers worldwide. And calculating the optimum service intervals for heavy equipment machines is not a light undertaking. And the Caterpillar-based solution, in particular equipment service needs are highly dependent on a machine’s location and the type of soil and weather it operates in.
That service history and hours of service that a particular piece of equipment is used can also really impact when and how often servicing of the machine needs to take place. And being able to more accurately predict when servicing needs to take place can dramatically improve both the customer satisfaction of the person using the equipment, but also dramatically improve the service contract profitability for individual service dealers. And that Caterpillar did was they basically built a solution for their Caterpillar dealers that does all of this, runs entirely in the Microsoft Cloud, and is on track to deliver some fantastic business results.
Now the Caterpillar solution uses the next release of our Dynamics AX business solution, and Dynamics AX can now be deployed on Microsoft Azure, which enables simplified and immediate provisioning of solutions anywhere in the world with built-in high availability, disaster recovery, and the ability to elastically scale as new resources are required.
The new release of Dynamics AX provides a really intelligent, modern user interface which enables you to make smarter decisions much quicker. It has an elegant modern UX and also native mobile apps for Windows, iOS and Android. And it has built-in support for tracking real-time analytics utilizing the latest in-memory database technology that we have as well as our Power BI service.
And this makes it incredibly easy for you to visualize your business metrics as well as create custom reports that can be embedded directly into the AX user experience. And although we have tons of new innovations in this release, it also includes the same stable set of proven business logic that we’ve delivered with previous AX releases. And what this means is it’s much easier for ISVs to take solutions that they already have on AX and make them available to fully integrate with this release, as well.
And just like the Dynamics CRM offering the new Dynamics AX has built-in integration with things like advanced analytics and machine learning capabilities and takes advantage of our Cortana Analytics offering. And this enables you take the data that you already store within your ERP system to make intelligent predictions based on your existing data about what will happen in the future and to easily take intelligent actions based on it.
And one of the things that really differentiates both our Dynamics CRM and AX and NAV offerings from others in the market is they not only include these sort of built-in analytics capabilities, but we’ve also basically ‑‑ and that work against the data that’s stored within those applications, but they also allow you to use our Cortana Analytics offering to easily compose that information with other sources of data to get even richer insight and build even more powerful solutions.
In the case of Caterpillar, as an example, they were able to take the service history data of heavy equipment that was stored in their ERP system and compose it with IoT data captured using our Azure IoT suite and then build a predictive machine learning model that was based on both sets of data to basically be able to more accurately predict then when one of their customers would need servicing.
And it really kind of enables you get kind of groundbreaking insights from, again, what the data you already have, other sources of data, in particular IoT you’re bringing in, and really transform how you run your business.
Now another core component of the Caterpillar solution that you’ll see in just a minute is a field service application that was built using the new Microsoft Power Apps offering. And as you saw yesterday in Chris’ keynote, Power Apps makes it really easy for you to create new mobile business applications quickly. It allows you to securely integrate data into these applications. And in addition to built-in Dynamics AX and CRM and NAV connectors, we also support many other popular business solutions and API formats.
And the great thing is that once an app is built it’s possible to securely deploy it and share it with other employees in your organization really easily. In fact, it’s as easy to share a Power Apps application as it is to share a document. And you can basically immediately make it available on all your employee’s mobile devices, no app store process required. And once these applications are deployed it’s really easy for IT to manage them in a secure way.
So no other cloud gives you the power and flexibility to run your business the way the Microsoft cloud does. And the end result really enables you to build and deploy really transformational business solutions much, much faster.
What I’d like to do is after talking about some of these components of the Caterpillar solution is actually show it off in a demo so you can actually get experience of what it’s like end-to-end. And what I’d like to do is invite Case on stage to show a demo of it.
DEMOER: Thanks, Scott. (Applause.)
Good morning. What I want to show here is a solution for heavy equipment dealers that we’ve built with our partner ZAP. And the first thing we see here is an executive dashboard. And what we show ‑‑ what I show in the demo today is three roles, I’ll play a service executive that wants to stay on top of their business, secondly I’ll be a service manager that makes sure I got the right service ‑‑ deliver the right service to my customer. And lastly we’ll see a service mechanic that wants to make sure they’re working on the right machine.
But, let’s dive in and look this beautiful Power BI dashboard. What we’ve done here is visualizing historical and real-time data from the Cortana Analytics Suite, from the IoT suite, and Dynamics AX. And what you see here on the left side is financial performance information that I need, of course, as a service executive to stay on top of my business. But, what’s important for me, as well, because it’s a key driver for my business, is have deep insight into my service contracts.
And lastly here you see some interesting moving data; you see some service recommendation data. But, to start off with let’s start off and dive deeper into our service contract business. What’s important with service contracts is to understand the accuracy and improve the accuracy of my service intervals. So what we’ve done here with our partner ZAP is upload terabytes of data, terabytes of historical data, and real-time data, and calculate a better service interval for the service contract.
So, for example, here what you can see in Barcelona is by simply applying machine learning on top of that service contract information, on top of the historical information, I improved the margins of that service contract with about 4 percent, which is pretty impressive for this business. But, of course there’s more.
Here on the right-hand side you see some real-time information. Here we’re aggregating real-time data from the machines, from the caterpillar machines and heavy equipment, and applying machine learning to predict component failure. So let’s dive deeper into that here. And you can see here, for example, the color coding I got nominal alert, or normal alerts. There’s nothing wrong. I can see the yellow which has a warning, and here I see 25 critical machines. And what we’ve done here is, again, applied machine learning on this real-time IoT data to predict which machines are about to fail, which is very important for me to understand.
So here diving into it I can see there’s 30 machines here in Barcelona that are able to fail. But, of course, as a service executive I also want to make sure I stay on top of my business while I’m traveling. So switching over here I have my Surface Pro. And Surface Pro, of course, a very productive tablet while I’m on the go. But, not only do I have my Surface Pro, I also have access to my personal digital assistant called Cortana. And the beauty of that is of course that I can keep engaging Cortana in managing my business.
So, for example, I can ask Cortana show me my critical alerts by service dealer. And what you see here is Cortana reaching out in real time to the data set. It’s querying the same data set and it’s a bit slow today. Here I see the real-time alert data that I just got from Cortana Analytics Suite. And the beauty is this is not a pretty picture, this is real- time data. So even on the go I can stay on top of my business.
So now let’s switch to the service manager. And as a service manager I have the full disposal of the new Dynamics AX, our new cloud-based premier offering. I see a beautiful HTML 5 user experience that can accelerate that helps me accelerate my decision-making. We introduced a new concept called workspaces. And a workspace brings together all the data, all the processes that I need to get the task done.
For example, here I see a workspace for equipment monitoring, which is very important for me as a service manager. Here on the left-hand side I see some relative contextual information. I see the equipment information that I need. I also see things like all sample history. And if we pan to the right here I see some Power BI information. And the beauty now, and this is new in Dynamics AX, is I can actually personalize the experience and add Power BI charts, or tiles, directly here in my experience.
So for example, I want to make sure I have my active service contracts and pin this right here in my workspace, so I know the contracts that I’m servicing here in Barcelona. So right here Power BI in context of Dynamics AX.
Now let’s take a look at the middle here. Here I see these 13 pieces of equipment that are about to come in, into Barcelona, are about to fail. And one of the things that I have here is what I call a smart date. And the smart date here is calculated by machine learning out of Cortana Analytics and handed over to Dynamics AX. So it’s the date at which we expect this machine to break with an 80 percent likelihood.
But wait, it gets even better. So diving into this machine that we’re about to service, we see a machine here, a Caterpillar machine, that Cortana Analytics thinks is going to break down on December 3rd. But, not only does it indicate the machine, but it even predicts the service component. So it tells me which component here, so this intercooler is a key component, and it’s probably causing the failure.
And again, I have the full power of Dynamics AX at my disposal and I want to make sure that I have the right inventory of this intercooler at the smart date. So when this machine comes in, into the service bay. So I can, again, use the full power of Dynamics AX here. So the only thing that’s left to do for me as a service manager is make sure I leave a follow-up note for my technician and make sure this thing here gets immediate attention when it comes in.
So the only thing, let’s switch back now to the service mechanic. And before we do it, of course, we need to get the machine into the service bay. So here we have a beautiful Caterpillar machine that I’m now driving into my service bay. So as a service technician I have a tablet app here at my disposal built by the magic of Power Apps, as Scott talked about. This Power App runs on any device, any tablet, any phone.
Here I’m using my tablet. The first thing I need to do is make sure I scan the barcode of the machine that is to ensure that I have the right machine to work on. And what the Power App does here is gets the right contextual information out of Dynamics AX in Cortana Analytics, to make me verify that this is the right machine. So I have here the right equipment data, the serial numbers, et cetera. I know where this machine has been placed. I also get information about the intercooler that is probably the cause of failure.
So the next thing I need to do is start my inspection. I have a simple checklist here that I can run through checking in this machine into the service bay. So by simply marking off the items here, I check off the tires, this is tracks, but okay, they look like tires to me, I check the gear, I can indicate if it needs repair. If I want to I can leave some voice notes, because again, I can’t use a keyboard or mouse. I can leave some voice notes here, some voice notes, to give some additional contact information.
The next thing I want to do to make sure I document this service intake properly is use the camera, and of course this was about the machine bay. I take a picture and start annotating right here. Let’s use a beautiful red marker, hey; it’s probably to do with the service bay. But, of course I want to make sure I get some better diagnostics here. So I open the service bay. It’s always important.
So here simply I can build this record of all the things I need to check and the one thing I need to do is make sure I submit this back into the workflow. So let the Power App be with me. And by simply providing my signature I submit this intake back into the workflow. But, of course, there’s more. How could we make this experience better?
And again here we have the magic of Power Apps. Here I give you an insight in our cooking show of building the Power Apps. You see the full Power Apps that you saw on the tablet. You saw the different screens and the only thing I need to do here, and I want to do, is actually enable ‑‑ because the machine is in a service bay. So why don’t I enable the service technician to feedback into the learning model?
So what I want to do here is insert some extra content, a percentage, and I want to hook this up onto the API. And what has happened here is IT has provisioned a secure API for me that connects Power App directly back to Dynamics AX and Cortana Analytics. So I have access to the failure prediction algorithm and here, by some simple pointing and clicking, if I can get this right, I can build this formula, and build this experience and voila, here by the magic of Power Apps I let the service technician make our machine learning model even better.
So what you’ve seen today is the power of the Microsoft Intelligent Cloud. You saw how we built this solution for heavy equipment dealers that brought together Cortana Analytics Suite, the IoT Suite, Dynamics AX, and Power Apps. You saw a great example of a system of intelligence that can help you, our customers, transform your business. Thank you very much. (Applause.)
Thank you, Scott.
SCOTT GUTHRIE: You know, I’m really excited to announce the public previews of both the new release of Dynamics AX, as well as Power Apps are now available to start using today. You can now do everything you just saw in that demo yourself, and provision solutions like that anywhere in the world using the Microsoft Cloud. And I’m also really excited to announce the public preview of our new Cortana and Power BI integration. With Power BI we’re continually looking to find ways to simplify how people can analyze and gain insight from the data they have.
And as you saw there in the Caterpillar demo, we now make it possible for you to ask natural language questions using our Cortana Digital Assistant like the one built into Windows 10, or one available on your phone, and get back answers from your data. And this really enables you now to ask questions about the data that you’ve already got stored in Dynamics CRM, or AX, or NAV, as well as any other source of data that you have stored elsewhere.
And this is really kind of a first of its kind offering and we think really makes it even easier for you to adopt a data-driven culture within your organization and really maximize your customer and your business insights. And the great thing about ‑‑ I like about that demo is again showing off the power of the end-to-end comprehensiveness of the Microsoft cloud and the fact that you could really take all of these components together to really deliver business solutions that drive value.
We showed this demo in this particular case using Dynamics AX as the ERP system. Earlier this year we released our NAV 2016 product, as well, which we’re also bringing to Azure, this brings with it a whole bunch of great, great new capabilities. And the beauty about having both of these solutions available on the Microsoft Cloud is that they can now also compose with all of the other things that you’ve seen today like Power BI, like Power Apps, like Cortana Analytics, and really enable you to transform your business in a substantial way.
So we’ve looked now at how the cloud can be used to engage customers better and run businesses more effectively. Let’s now look at a company that’s using the cloud to transform their products and services in a deep way, as well. And there’s a great company in Europe that’s using technology in a deep way to really put people first and is having tremendous business success.
Metro Bank went into business in the UK only about five years ago, and they already have 350,000 customer accounts. Their chief commercial officer is going to join me on stage in just a minute. But, what I want to do is show a video first to give you little insight into what they are and how they do it. And let’s roll ‑‑ go ahead and roll the video.
(Video segment.)
Please join me in giving a warm welcome to the Metro Bank Chief Commercial Officer Paul Riseborough. (Applause.)
Thank you, Paul, for taking the time to come with us out and chat this morning. Maybe can you give us a start by basically giving us an idea why Metro Bank thought it would be a good bet to bring the first retail bank business to the UK in more than 100 years?
PAUL RISEBOROUGH: Sure, I mean we saw an opportunity to create an entirely different type of banking experience, one that put customers genuinely at the heart of it, something that’s not been the case in the UK for some time. We have a motto, which is “fans not customers.” We exist to create fans, a simple, understandable proposition that you would tell your family and friends about, that you would recommend. And that starts the moment you walk into one of our stores. We call them stores. They’re open seven days a week, 362 days a year, early and late, just when you need them to be open. And our colleagues are there to do one thing and one thing only and that’s to make you a fan. They’re not incentivized to sell you anything. So we really think we’ve got a great value set that’s underpinning the business.
SCOTT GUTHRIE: Sounds great. Can you tell us a little bit about what you’re doing to make good on that customer promise?
PAUL RISEBOROUGH: Sure, so we do the simple stuff really well. We open accounts in under 20 minutes. We print your debit card, or your credit card on the spot, so you can take it with you. We’ll set you up on mobile banking over the store Wi-Fi so that you walk out working. We’ve got all the normal stuff like a 24/7 call center staffed by real people. And we have some really handy extra stuff, like whether that be safe deposit boxes, or what we call our magic money machines, which count your coins or actually the kids count your coins while mom and dad do their banking.
SCOTT GUTHRIE: That’s awesome. So that’s the in-person and on the phone experience. What else are you doing that’s going to be even better for your customers and set yourself apart in the industry?
PAUL RISEBOROUGH: Sure. So we’d been trading a couple of years when we realized we needed to invest in a system that took our customer experience to the next level. And there were a few key areas that we needed to get right. We really needed a single customer view. It’s really important when you’re sitting in front of a customer to know everything about that customer and how they’ve been interacting with the business. We needed a workflow tool for our back office and middle offices processes. Of course, we needed a business development lead tool, a classic use of CRM. And we wanted to bring our KPIs for the business to life to ensure that we could demonstrate that we were really delivering for our customers.
I’m pleased to say Dynamics CRM helped in all of that plus. We’ve done so much with it. We’ve used it in store to shave 66 percent off the time it takes to open a business account. For small businesses that really matters. Some of our competitors take weeks. So getting it under 40 minutes and shaving 66 percent of the time off is a huge win.
We’ve literally saved millions of pages of paper flying around the business. I’m sure this is a familiar challenge to some of you. Customers sign for their terms and conditions for the product on a tablet, and we workflow those terms and conditions to them via e-mail.
And we recently launched some online savings accounts, and by surfacing Dynamics to process those, they’re down to under five minutes, which again compares favorably.
SCOTT GUTHRIE: So I know you’re taking advantage also of our Power BI solution in addition to Dynamics CRM. Can you tell us a little bit about how it’s helping you succeed?
PAUL RISEBOROUGH: Sure. Right. So I’m the CCO. So high quality BI is gold dust, it’s how you run the organization. So we’ve used it in so many different ways. Millions of transactions are flowing into balance sheets and P&Ls for our finance teams. So finance are happy. That’s a huge win.
We’ve used the BI Suite to understand how our mobile app is performing so we can begin to perfect that user experience. We’ve also used it with our recent online savings applications to understand the customer journey and where we can make things better.
But I guess the overall point I would land is, how many times have you been in a meeting where everyone has conflicting BI or MI, you sit there having a debate for half-an-hour. It’s allowed us to collaborate properly across the organization. There’s one version of the truth, and you can’t really put a price on that.
SCOTT GUTHRIE: That’s awesome. And I know you’re also using several other Microsoft products as part of your overall technology solution. How are some of those helping you succeed as well?
PAUL RISEBOROUGH: Sure, I mean we really are diving in. So we’re using Parature as the knowledge base for all of our colleagues. So if they have any questions about a product or a service, they use that. Skype for Business is across the organization. It’s really quite hard to spot a physical telephone somewhere. We use it to collaborate across the organization. Yammer is the tool we use to celebrate success and customer stories. Dynamics Social Engagement is how we understand what customers are saying about us out there in social media. And Dynamics Marketing is the tool we use for rich communications to customers at key trigger points.
SCOTT GUTHRIE: That’s awesome. So what’s next for Metro Bank?
PAUL RISEBOROUGH: Well, first up, in 2016 we hope to go through 1 million fans, which is a huge achievement for our business. It’s something we’re very proud about. But I think secondly, we’re really looking forward to using the 2016 upgrade. There are some really, really interesting features. And we want to make best use of those to continue to transform the customer experience.
SCOTT GUTHRIE: Well, thank you so much for spending time with us today and for sharing what you’ve done with technology in your business and the impacts it is having. We’re really looking forward to the continued partnership and we’re looking forward to seeing how the results add up. So thank you so much, Paul.
(Applause.)
Well, you know, you’ve seen a whole bunch of the examples today of how technology can really help change and transform our businesses in really substantial ways across all different types of digital transformation agendas. And really the thing I would love to leave you with is that the opportunities for all of us in this room to leverage technology to dramatically accelerate our businesses, that opportunity has never been greater than it is today. And using cloud-based technologies like what you’ve seen here this morning, and in particular we think with the Microsoft Cloud, we think are really going to be key to enabling you to accelerate this digital transformation even further.
I would like to say a big thank you for coming out to the event this week. I hope you’re inspired by some of the customer stories you hear at Convergence throughout the week, and I speak on behalf of all of Microsoft when I say, we’re really looking forward to partnering with you on this journey to the cloud and helping you transform your businesses as well.
Thank you very much. I’m going to pass it over to Jean-Philippe again. Take care.
(Applause.)
JEAN-PHILIPPE COURTOIS: Welcome back again. Well, I hope you enjoyed the way our customers, some of you like Real Madrid and others, are celebrating their fans. I love that, actually. I love that story a lot. And I think Scott did an amazing job showing the capabilities we are building to enable, again, that Intelligent Cloud to work on your business, to work on your biggest opportunities and biggest success factors for the future of your organizations.
What I would like to do actually in a couple of minutes is invite on stage our last guest, another partner actually of Microsoft, and I know they are involved with a number of your organizations as well, and I think this is an example where we are bringing together the pair of basically digital transformation for business and social together.
If you remember yesterday I was talking about the way social transformation, the community impact is actually enabled by the cloud platform. And this is a great example of a financial services organization that is well known, I’m sure, by many of you, Temenos. They’ve got, of course, a very strong set of assets that they provide to banks and financial services orgs in the world. And recently they’ve decided to actually expand and build a new business which is all about providing access to people who don’t have access to banking services using the pair of microfinance and mobile banking and doing all of that leveraging the cloud platform and intelligence of the Azure platform. So I thought it would be actually a great example.
And before I invite on stage our guest, I would like to roll the short video of one of their customers, Real, not Real Madrid, which is a bank, Real, which is a bank in Africa which is partnering with Temenos to provide banking, again, that helps people achieve a much greater stability in their lives. So please let’s roll the video.
(Video segment.)
Okay, so please welcome on stage John Schlesinger, the Chief Enterprise Architect for Temenos.
John.
(Applause.)
JEAN-PHILIPPE COURTOIS: John, welcome here.
JOHN SCHLESINGER: Thank you.
JEAN-PHILIPPE COURTOIS: John, can you tell us a little bit more about Temenos? I mean, I know many of you know Temenos, but it would be good for you to give us a perspective on your company.
JOHN SCHLESINGER: Well, we’re a banking software company. Most of our employees are in India, we’re headquartered in Switzerland. We were founded by Greeks, but we like to think we’re English.
JEAN-PHILIPPE COURTOIS: That’s a perfect global combination of talents.
JOHN SCHLESINGER: We think of ourselves as the leading banking software company. So for example, Metro Bank uses our software. M-Shwari in Kenya uses our software. We think we’re about 500 million people whose bank accounts are handled by Temenos software, $6 trillion in assets. And we take a bank live on our software about every three days.
JEAN-PHILIPPE COURTOIS: So pretty powerful, and probably many of your customers in this room as well, by the way, John.
John, as we watched on this video, you know, you made a very interesting move to the cloud to expand some of your offerings. Why is that? Why did you do this move, and what triggered that move?
JOHN SCHLESINGER: Well, we made the move into the cloud about four years ago. We did it because we really feel that the cloud is the future of core banking. Core banking, which is loans, deposits and payments, is commoditizing. It’s a service that needs to run at the lowest possible cost. And we think that the Azure Cloud is the lowest possible cost place to run our core banking. So there’s a cost side to it.
But there’s also an access side to it. Small banks around the world are getting financial inclusion for the developing countries can in principle have an idea in the morning, have it implemented in the afternoon and running the next day globally. And that’s possible because of the cloud. You don’t have to buy a data center. You don’t have to spend a year-and-a-half installing the software. You can, if you want, go the next day. So the access side is also very important.
JEAN-PHILIPPE COURTOIS: The access side has been a big trigger.
So I know, John, the same way you do, but as I travel the world and meet with many banks I’ve got some pretty passionate discussion about their regulatory bodies. Wherever they sit in the world, I was in Asia last week, in Singapore, I mean, I was talking yesterday night with a French bank as well, everybody kind of worries a bit about that big brother — not big brother, but big help on their back. What are you doing? What are the conversations you’re having yourself, because you are providing essential core financial services in the cloud?
JOHN SCHLESINGER: Well, I think it’s true to say we don’t sell banking in the cloud one customer at a time, one bank at a time. We really sell it one regulator at a time. And the reason we started with microfinance is partly because it’s lightly regulated. So that the regulator does not object to us issuing loans in the cloud for microfinance.
But as it happens, we are taking our first fully regulated deposit taking bank live on Azure this year. So that’s been an interesting discussion. And we discuss with all the major European regulators and in principle that they’re all for banks doing business in the cloud. There are some hurdles, but we don’t think the hurdles are insufferable.
Obviously they’re very interested in data sovereignty, that the data is safe and in a secure data center. And they’re totally convinced that that’s fine with all the Microsoft data centers.
JEAN-PHILIPPE COURTOIS: They’re fine.
JOHN SCHLESINGER: Right. Once banking in 10 years’ time is predominantly in the cloud, I think this will — we will wonder why did you even have this conversation. But as it hasn’t yet started, it’s a conversation you have to have. It’s about security. It’s about data sovereignty. It’s about access from the regulator to the data centers. But, I see none of that as a problem in principle. Today it’s merely a problem in practice.
JEAN-PHILIPPE COURTOIS: That’s great, great insightful discussion, showing as well that sharing actually the outcomes of the solution, in this case social inclusion, can make a big difference in opening the eyes and hopefully the connection with the regulatory bodies, as well.
JOHN SCHLESINGER: Yeah, it appears there’s a very strong relationship between financial inclusion and economic development. So it’s actually very important work for developing nations.
JEAN-PHILIPPE COURTOIS: Fantastic ways to frame the discussion I think in many countries. Well, as you do that we were discussing back stage you’re opening very new businesses and new customers, as well, right, and particularly in emerging markets. So can you share the perspective you have in Africa, in the Middle East, and maybe in many other countries, in Mexico, where you can see more opportunities for Temenos to actually serve more than 500 million people I’m sure very soon.
JOHN SCHLESINGER: Yeah, well there are 50,000 regulated deposit takers in the world. Only 5,000 or 6,000 of them use standard software. Our aim is to have all 50,000 using core banking in the cloud. So in 10 years’ time we think all 50,000 of those banks will be doing processing on Azure.
JEAN-PHILIPPE COURTOIS: Wow, that’s a wonderful aspiration you have for us, me now, looking with Scott Guthrie backstage at the 45,000 regulatory bodies in the world leveraging the power of the cloud, Intelligent Cloud.
JOHN SCHLESINGER: And of course microfinance is probably another 100,000.
JEAN-PHILIPPE COURTOIS: Absolutely.
JOHN SCHLESINGER: So we’re talking about a very major change in the world of banking going from on-premises, owned data centers, to shared infrastructure and with us platform as a service.
JEAN-PHILIPPE COURTOIS: That’s fantastic. John, I’d like to really thank you a lot for sharing, again, this moment you have in your business, but also your aspiration, very inspiring.
So please give John a big hand to thank him again to make that move.
Thank you, John.
JOHN SCHLESINGER: Thank you very much.
JEAN-PHILIPPE COURTOIS: I think that was the last customer example I wanted to share with you on stage. It was, again, very inspiring I found when you think about the new opportunities that are enabled now through this intelligent cloud platform. I hope you enjoyed all the stories. I hope you can learn from them the same way we learned from your stories, by the way, and the way we help you doing it. I really enjoyed a lot hosting you last couple of days. You have more fun, more learning to do after this session and tomorrow, with a few other speakers, and great customers. So I wish you really the best for the rest of the day and looking forward to go along your side to transform your business.
Thank you. (Applause.)