Satya Nadella: Convergence 2015

SATYA NADELLA:  Good morning.  It’s a real pleasure and a privilege to be at Convergence, be in Atlanta.  For me it’s coming back home.  I think it was eight years ago the last time I was at Convergence with Doug Burgum and the team there, and it’s awesome to be back.

In the last eight years a lot has happened.  First, I think the importance of Convergence for Microsoft has grown.  It’s become this premier business event.  We have over 12,000 business decision-makers representing every industry, 70-plus countries.  We hold two Convergence conferences, one in North America, one in Europe.  And it’s fantastic to see even the North America Conference is truly becoming a global conference.

The second thing that’s happened in the last eight years is your drive to transform businesses is really setting the technology agenda.  It’s your needs, your passion for what you want to achieve in your business that is fundamentally changing even how we think about technology.  That role of the business decision-maker is what we really want to celebrate in this conference.  That’s the conversation, that’s the dialogue that we want to have.

You could say that this notion of business transformation driving business systems as well as technology evolution is really not new, because from the very dawn of computing you can think about the mainframes and how they helped us automate the accounting and finance department, and really help scale businesses.  We then went into the stage of minicomputers, which really brought about manufacturing resource planning as well as MRC2, where you were able to even bring the demand signal and really start to democratizing how manufacturing could get automated.

But the real power of business systems came to the fore in the client server era.  This is the era in which computing became much more ubiquitous inside of the enterprise, and coincident with it we were able to build these enterprise resource planning systems that automated everything inside of the organization.  In other words, it digitized your HR, finance, accounting, manufacturing, and brought what was before siloed together into one digital fabric helping us do enterprise planning, doing stuff like supply chain management, and really brought about the next level of efficiency inside of the enterprise.

We then went on to build on top of that and digitize, first through the help of the Web, and then now with mobile, our interactions, in particular with customers and partners.  So we were able to extend far beyond the enterprise boundary to be able to take every interaction that we have and really digitize that, and then to be able to reason over all of that digital information.

And I think we are at the dawn of a new generation of business systems.  With the advent of unlimited computing capacity in the cloud as well as new rich data platforms that have the ability in real time to reason over data, we now can build these systems of intelligence.  Now these systems of intelligence don’t sit in isolation.  They, in fact, build on the entire digital fabric that we have with the systems of record and systems of engagement, and create one feedback loop.

So this feedback loop helps us take all of the digital information we have and make it much more real-time in terms of how we can drive both performance and efficiency.  So this is going from having these systems which are very, very useful unto themselves, but are somewhat static, and converting them into learning systems where everything that you have invested in, in terms of building out these systems of engagement and systems of record, become intelligent.

So that’s what we want to talk about and I want to talk about this morning.  And I want to start first by reflecting on Microsoft’s identity in all of this, because I think that’s very, very important.  We, as a technology provider and a business systems and as solutions provider, are very focused on one single thing: it is about empowering you as individuals and organizations across every vertical, across every size of business in any part of the world to be able to drive your agenda and achieve more and do things that you want to do with your business.  That’s our identity.

We are not about being in this business because we have an ad business on the side, or we are not in the business of purely building devices.  We are in the empowerment business.  We are in the business of enabling businesses in particular to be able to drive their transformations through the power of digital technology.

And to that end there are three bold ambitions that we have.  The first one is about creating this new era of more personal computing.  You can imagine now this ubiquitous computing fabric that surrounds us.  We have sensors in rooms.  We have large screens.  We have our PCs.  We have our tablets, smartphone.  We also have these new devices like the holographic computing devices.

And the idea is to create this more natural interface where you can speak to it, you can in fact drive the computer with vision, and holographic output, and this natural way of interacting as well as having the notion of moving these experiences, because you will have a variety of devices in your life.  In any given day you’re interacting and moving between devices.  So when we think about mobile-first for us we want to build experiences that are about the mobility of the experience, not the mobility of the device.

We also want to build into the core of this more personal computing fabric thrust, because increasingly the issue of our time is going to be privacy and how you as the end user, you as the organization is in control of what data you share, how that data is being used.  So for us Windows 10 marks a huge milestone on this journey of more personal computing where it will span with one consistent experience for users, developers, and IT administrators from across Internet of Things to these holographic computers.

The second big ambition for us is about the reinvention of productivity and business process.  At this conference we will talk a lot about this.  In fact, the intersection between productivity and communication and collaboration and business process is where I think the most interesting things happen inside of our organization.  If you think about your customer interactions, if you think about marketing, you think about HR, it is really about the collaboration, communication that happens out of band from a system of record, or system of engagement and brings it together is where we want to do the automation.  So we’ll talk about how Office 365 and Dynamics in particular come together to enable that new way of working, the new workflows of the enterprise.

And then the last ambition that I want to talk about is building the intelligent cloud.  We want to have the richness of the cloud infrastructure that accommodates for the complexities and the diversity of the different industry.  We’re at the very, very beginning of this cloud era and as you can imagine we are in many industries represented here, which will have different regulatory regimes, parts of the globe represented here, which will all have different digital sovereignty needs.  And so we want to build that most comprehensive cloud infrastructure, support hybrid computing in its purest form so that it provides the flexibility to you.  And then build out a rich data platform on top of it so that you can start building these new systems of intelligence that drive your business transformation.

So talking about these systems of intelligence, I want to actually walk through what it means in practical terms by thinking about empowerment of individuals, organizations, and industries, starting with the empowerment of people, because I think whenever you think about any change now it starts, especially any change that’s driven by technology, it starts with us as individuals getting comfortable with these new forms of technology and how we’re using it in our daily lives.

For me now this morning even when I got up I reached out to my smartphone and I had Cortana, which is our intelligent agent, think of it as a system of intelligence that knows everything about me, my schedule, my preferences, I give it — in fact, there is this notion of a notebook that powers Cortana that I can go enter notes about my interests, my places, my contacts, my reminders, and it learns constantly from that and helps me through my day.  It will tell me how much time I had for my workout, when should I leave to get to this conference center, all of that proactively.  So it’s an intelligent agent that’s something that I’m interacting with on a constant basis.

I also am wearing this Microsoft Band, and the interesting thing about the Band is that it’s actually a sensor framework on my wrist.  It has sensors for your heart rate tracking, GPS, it has the ability to do UV light sensing, a lot of different sensors, which are all built for this low-energy device that are collecting data.  And all that data is being moved to the cloud, because devices will come and go; the most interesting thing is the data that’s being collected, and in my case I go up to this Microsoft Health site once a week or so and just track my data.  And the most interesting thing is I’ll continue to build this data over the years and we can even have this data, in fact, be part of my electronic medical record by taking it to HealthVault and so that I can start sharing it with the doctors and other medical providers.  And really having this system of record, effectively, but not only a system of record for my own personal well-being and health, but also the ability to share it with other providers, also to be able to have the research community add additional insights on my data, that’s the real power in time that we are building out, which is going to individually empower us.

In fact, one of the fun things here is I get to sort of have all of the statistics, a bit of business vanity right now, but over time it becomes even more useful.  And for now I can track the number of steps I take, the calories I burn, the workouts, the amount of sleep, and it’s awesome to have that.  But, one of the other things is you can compare yourself and here you have, in fact, this is the data for the 99th percentile of users using Microsoft Band.  Obviously I’m not in the 99th percentile, and I have a long way to go before I ever can get there and I don’t definitely work out three hours and nine minutes a day.  But, I thought, why not introduce someone who potentially belongs to that 99th percentile?

So please help me welcome on stage Russell Wilson from the Seattle Seahawks.  (Cheers, applause.)

RUSSELL WILSON:  How are you doing, buddy?

How is everybody doing?  Now, this is a different Hawks stadium than I’m used to.  But, to be here with you guys is a true honor.  I’m excited to be here.  I would say “go Hawks.”  I don’t know if you guys are Seahawks fans here. (Cheers.)  Atlanta Hawks fans.  But either way, both are great.

SATYA NADELLA:  That’s awesome.  Thank you so much for being here, Russell.

So I thought you’re a big user of technology in your life.  We were talking even backstage about some of the things that you do with OneNote.  Why don’t you just give us a little bit of a flavor for how you use tech?

RUSSELL WILSON:  Yes.  So OneNote is big in my life.  I use it all the time for my notes.  Every week, let’s say we’re playing the Atlanta Falcons week one, and we’re playing the 49ers week two.  Every year — my dad passed away four years ago, so one of the things I did more in my childhood was take more notes, journal more and all that.  So the past three years I’ve been doing that.  One day, if I ever have kids, that’s something I want to do.  I want to save each year, I want to journal each year.

So my rookie year, three years ago, 2012, I took notes, handwritten notes.  And last year, in 2013, I started using the Surface a little bit more. And that was more through e-mails and just saving stuff.  But then this past year, I saved everything on OneNote.  So week one, let’s say we played the Atlanta Falcons, I think we played the Packers, but let’s say we play the Atlanta Falcons for 2015.

What I will do is, Monday through Monday I’ll take notes.  So I’ll take notes on all the things I study, every time Coach Carroll gets up there, every time a player gets up there, every time I speak I try to remember what I said, or any emotion I’m feeling that week I’ll write down.

And then I’ll do that for week one, and then week two, and the whole season.  And I think that will be something cool to give my kids one day and so that’s special to me.

SATYA NADELLA:  And the other thing, of course, is you’re now — obviously you’re a professional football player, and the NFL is going through a lot of change with technology.  So tell us a little bit about how tech is impacting you even on the field and off the field in your profession?

RUSSELL WILSON:  The biggest way it’s helping us, the Surface, Microsoft and NFL partnered up, and that’s the coolest way on the actual field.  During a game, and I could use the strategy, you guys can see that picture potentially here in a little bit.  One of the things that I get to do is on the sidelines, I get to zoom in on certain players, zoom in on certain formations and figure out what a team is trying to do on third down, or what they’ve done every time on third down in the red zone.  So it’s good for me.

I think it’s not just for quarterbacks, though.  Our offensive linemen can do it, our defensive backs, everybody.  So it’s really important for me, but also throughout the week and throughout the season, you can look at Excel, use Excel.  We use Excel all the time for the Seattle Seahawks, and I use it all the time personally.  So we can figure out what teams try to do specifically on certain situations.  And that’s the biggest thing.  What type of player he is?  Can he catch this ball?  Is it a good defender on this play?

So all those things are relative.  But on a personal level, the other biggest way that I use on a personal level my Surface and all that, I use Skype all the time.  So I get Skype with my niece.  She’s three years old.  So that’s one of the things I get to do and it means a lot to me, and I stay connected to my family even though I’m far away all the time.

SATYA NADELLA:  Thanks, fantastic.  Thank you so much for coming and sharing with us.

RUSSELL WILSON:  Thank you for having me.

SATYA NADELLA:  It’s a real pleasure.

RUSSELL WILSON:  Thank you guys.  Go Hawks.

(Cheers, applause.)

SATYA NADELLA:  Now that was real fun.  I mean, to have Russell describe how he, himself, is a big user of technology, and I think it just shows how now every walk of life and every industry and every activity increasingly is taking advantage of this digitization of nearly everything.  And that’s when the power of what we do and what you are capable of doing with these technologies is brought home.

Let’s move on to talk a little bit about empowering organizations.  In fact, for me this is a place where what I do at Microsoft has drastically changed.  How I spend my time on a daily basis, what issues do I pay attention to has perhaps gone through a sea change even in the last 12 months.

So I want to show you a couple of tools and services that I use on a daily basis, in fact multiple times a day.  The first service that I want to talk about is Delve.  This is part of Office 365.  It’s just this service that really helps take all of the work that is happening inside of the organization and bring it to life, very much like how, for example, if you want to find out anything that’s happening in your friend’s life, you may go to the Facebook newsfeed; think of this as your work newsfeed.

So I come in in the morning, log on to Delve, check it, in fact, on the phone many times.  And what I have here is all the artifacts of work that are lighting up on this page based on my interests.  So it’s reasoning through everything that’s happening in terms of the presentations being created or documents being created, or shared, based on my interests, because it knows of the things that are topical interest to me, and it really highlights them.

For example, in this case I have someone talking about opportunities in machine learning.  Stephen Elop, who leads our wearable and device team, is talking about tech trends in wearable computing.  Judson is working on some North American customer survey.  The HoloLens API review, as you can imagine our Developer Conference is coming up, and it’s very important for us to get these API reviews done in time.  So these are just artifacts of work that are of interest to me, and the system knows that these are the most topical and relevant for me today.

Now, as you can notice, this is not an org chart.  This is one of those most empowering things for an organization, where everyone can transparently look at the information, discover information inside of an organization, without having the hierarchies of the organization get in the way.  In fact, I can even go in and look at documents that are shared with me, or pieces of documents and presentations shared with me.  In fact, I see that Kirill has shared with me a Russian poetry recommendation.  He knows that I’m into poetry and one of these days I’ll brush up on my Pushkin.  I have things like Skype for Business Feedback, which is a big, in fact, initiative for us.  We’ll talk about it even at this conference.  The Surface top customer feedback, this is an exciting enterprise — I like to describe it as the enterprise TV that you will hear even more at this conference.  So there’s a lot of this data.

Again, think about the empowerment that anyone of the 100,000 people at Microsoft who has some customer insight are putting it into this or can share it with me.  In fact, they can even add this to boards.  Very much like Pinterest, you can create boards.  And one of my favorite boards to go to is this Voice of the Customer Board, where I can get to see what anyone inside of Microsoft has in terms of insights around customers.  So you see, again, that North American Survey, a retail survey, feedback on universal design, something that I’m very, very passionate about.  Jenny, in fact, leads our accessibility program, so she’s working on how do we make things like Windows 10 and Office much more of a universal design based effort so that it’s accessible to everyone.

So this gives me an ability and, more importantly, it empowers everyone inside of Microsoft to take the data that they have and then turn that over into insights, and more importantly share it across the organization.

I can also pivot by people.  So I have Joseph here, who leads our machine learning practice, and machine learning is something that you’ll hear a lot about in this conference because this is an emerging technology that I believe fundamentally is going to change a lot of business processes.  And so one of the key areas that we’re still working through is how is this being used in a lot of the pilot programs with customers.  So this is the opportunity for machine learning in the cloud.

I have Yammer right here.  So what I can do is, in fact, continue a conversation that I’m having with Joseph and others on that team about the potential for machine learning and business process, and I can go ahead and type what I want here and continue our conversation.

So it shows us all a new way for how we can discover information, communicate, make connections, and really transform the organization in terms of the transparency and the empowerment it creates.  So that’s a quick flavor for Delve.

The other tool that’s changed how I work is Power BI.  Now this is another tool which creates a dashboard, and you can say, hey, there have been dashboards that have come before, and I use dashboards.  But the real breakthrough with Power BI is that we now have made it very simple for any one of you who is a business decision-maker to create your own very personalized dashboard.

Because one of the things for us inside of Microsoft that is very important to every individual, every engineer, and every salesperson, is to be in touch with the leading indicators of success.  Because, look, we all celebrate far too much the lagging indicators of success like revenue, and net operating income and so on, because that’s sort of an outcome of a lot of great work that happened up front.  And so for us the key is usage, your usage of our products on a daily basis is the most important signal to our frontline sales individual, as well as our engineer.

So what we want to track, for example, is what is — in fact, we have these two metrics, the monthly active usage, or MAU, and daily active usage, which is — and the ratio between daily to monthly is perhaps the most important metric, because that shows the intensity of usage.  So for every service inside of Microsoft, from Office 365 to Azure, we are tracking constantly how are people using it.

Now, for example, Windows 10, obviously we are getting close to the end game here and we are very interested to see how people are using Windows 10.  We have the insider program, we have around 3 million users using Windows 10 already, giving us constant feedback.  In fact, we’ve built right into the product this Net Promoter capability.

So the likelihood that anyone would be a recommender of Windows 10, and you can see that 61 percent of the people currently using it want to be really promoters and advocates of Windows 10.  And I also have this bubble chart here which shows me that the more services that you use the more likely it is that you perhaps are going to promote, because it goes up all the way to 90 percent if you’re using 14 services.  And, in fact, Cortana is one of the features that is very important.  So when I click on, if you’re a Cortana user and you see that it’s gone from 61 to 69 percent Net Promoter score.

Now, the real idea in a world of big data is to recognize these small patterns and insights and then to act on it.  The fact that I was able to go take a look at this and say, wow, there is a real correlation between services and in particular Cortana and their likelihood to promote is the kind of insight that can be used by me and by the engineers working on Windows 10 to fundamentally start driving changes, to be able to add new capabilities that have more likelihood of success in the marketplace.  That ability to drive in real time using data, product outcomes in our case, is perhaps one of the most transformative things that happens up and down Microsoft and that’s sort of very, very powerful.

So that gives you a little bit of a quick flavor for how I personally use some of these services and I would really encourage each of you to have a — to go give these services a shot, because we really built this so that business decision-makers like yourself can take these tools and turn them into very powerful empowerment instruments throughout the organization.  And so I’m really pleased to announce the global availability of Power BI, which is going to be available for all of you to be able to use, as well as Delve, today.  And so these are two services that I believe can be fundamental to how you get transformation and transparency within your organizations.  (Applause.)

So I want to move to the last part of my talk this morning to talk a little bit about empowering of industries.  When we think about any industry, it can be manufacturing, retail, healthcare, financial services, insurance; each one of these industries is being transformed today, because of what you’re digitizing inside of your industry.  The core business processes, I mean take insurance in particular and how it’s being changed by the ability to price things based on tracking habits of the insured agent.  Manufacturing, everything in manufacturing now is tracked in real time so that you can essentially build a SaaS service that really goes with the things that you built.

Perhaps the most horizontal way to understand the transformation that is pervasive across all the various industries is what we call the Internet of Things.  And when we think about Internet of Things it starts, obviously, with whatever it is that you make, any service that you provide, and connecting it up to the cloud.  In fact, we are going to have something like 26 billion Internet connected devices.  We talk a lot about a billion users of smart phones, or 300 million PCs sold a year, but think about it, there are going to be 26 billion general purpose compute devices, essentially, that are going to be there by 2019.

Now, the one thing that’s going to happen, because of this explosion of Internet-connected devices, is the explosion of data that will rendezvous with the cloud.  There’s going to be, in fact, data that’s going to get filtered right on the device, and there’s going to be some sample data that will be propagated back into the cloud.  So you’re going to have something like 44 zettabytes of data that’s going to be in the cloud.

Now, the most interesting thing starts to happen once you have all this data.  It is the transformation in the business model around these things.  What you are now going to start doing as the provider of that service, it could be insurance, it could be a manufacturer of a device, every one of these businesses now is going to become a software business, where you’re going to reason about all of this data.  You’re going to build applications.  You’re going to do things like advanced analytics and predictions.  You’re going to provide SaaS services that go along with your services and devices.

That transformation is what’s going to change the economics of your business, because the gross margin that was associated, perhaps with either the labor inside of the service, or the capital inside of the goods, is going to now change to become something like software margin.  So that transformation is what this entire evolution to these systems of intelligence is going to really bring in.

So to give you a bit more of a flavor for how this is going to play out across a variety of different industries, I wanted to invite up on stage Jeff, who is on our IoT team, to kind of give you a bit of a flavor for some of the various technologies and various industries and how they’re using it.

Jeff, how are you?

JEFF WETTLAUFER:  Good morning, Satya.

Good morning everyone.  (Applause.)  Thank you for having me.  So I want to take you through three different customer scenarios.  The first is AccuWeather.  AccuWeather is the world’s biggest weather company.  Their service is in over 200 countries, over 100 languages, and they’re over 50 years old.  They’ve built their software as a service on Azure, and it’s consuming several different types of technologies, such as Service Bus, Azure SQL, Machine Learning, and Stream Analytics, to name a few.

So I want to first start with showing you their consumer applications.  Here we have — I’m not sure if any of you are from Boston, but here we have our Boston weather report right now.  It’s got a very rich interactive experience that allows me to see all the kinds of data that I would expect in a personalized weather service.  I can see the current precipitation weather levels, the wind speeds.  I can also see different types of forecast information, whether it be daily, hourly, or even monthly.

But, now let’s take a look at their commercial offering.  Here I have the AccuWeather Enterprise Solution.  This solution is a dashboard built on Azure and you can see there’s a very rich collection of information presented to me here.

SATYA NADELLA:  So this is AccuWeather taking, obviously, the data that they have behind their consumer service, and converting it into a SaaS service so that other businesses, be it retail, manufacturing, can use weather data to automate their business processes.

JEFF WETTLAUFER:  Exactly and a great example that I would highlight there is Lowes, here in the U.S., is using this very service to not only manage their inventory and their logistics, but also even their marketing campaigns, so a really interesting application of a software as a service.

So let’s take you through some of the highlights here.  Along the top you have this selection of severe weather warnings.  These are coming directly from AccuWeather service and you can see there’s a warning for lightning, tornado and wind, and those are provided by AccuWeather to every customer in a feed like that in the dashboard.  But, then here in the center I have a collection of personalized weather locations that can be customized for my role in the organization or even different types of people in the organization that need different types of filters and alerts to be set.

Now, speaking of alerts, let’s talk about how we can configure different types of alerts on the weather, because it’s not just about looking at a weather dashboard.  Here I have the ability to configure specific alerts for a location.  In this particular case we’ll pick Boston.  I can select the different types of alerts I want to set for that location and then on top of that I can also down here set conditions on that location’s alert.  So, for example, we might want to be made aware of if more than or equal to two inches of snow per hour falls in Boston.

So at this point we’re setting an alert for a specific location, but it doesn’t stop there.  What we can also do is we can set associated procedures to those alerts.  So if those conditions get —

SATYA NADELLA:  This is the automation of a business process that could get triggered based on some of the weather alerts.

JEFF WETTLAUFER:  Exactly, yes.  So not just associating certain procedures, like contact the snow removal company, or notify my staff to clear the pedestrian walkways, think of this moving forward where AccuWeather will provide the ability to integrate this into organizations infrastructure, connecting heating and cooling, HVAC systems, lighting, all those kinds of things, to really automate the end-to-end process.

SATYA NADELLA:  That’s very cool.  So you are going to, in fact, hear from the CEO of AccuWeather, it’s an amazing story out of the passion of one individual from very early on that has helped build this great business.  So I think that’s a fantastic story that he’s going to personally have a chance to share with you and I’m excited about that.

JEFF WETTLAUFER:  Great.  OK, let’s move on.

OK. So now I want to show you a little bit about a company called Marston’s. Marston’s is a U.K. pub and brewing company.  They make beer and while they’re primarily based in the United Kingdom with their pub locations, a big chain of pubs, their beer brands are known all over the world.  Here we have Microsoft Social Engagement, an application service built on top of Azure, and Marston’s is using this to actively listen to their customers, analyze the sentiment of those customers, and then directly engage with those customers.

So let’s take you through each of those steps here and show you how they’re using the platform.  Here I’m sitting at the home page of the Marston’s brand overview.  Now, if the brand manager is concerned about the brand he wants to see different types of things happening.  So in the top level here we have our sentiment overview, this is the kind of perception of conversation happening.  We’re analyzing that on the back end on Azure.  We have the locational insight of where the conversations are happening in the world.  That’s very interesting to certain people like marketing or logistics.  And then down here on the bottom we have the sources and the types of conversations that are happening, the authors, where they’re saying it, Facebook, Twitter, blog, et cetera, all these different types of social —

SATYA NADELLA:  Right, so this Social Engagement service is an example of one of these systems of intelligence where you’re able to reason over all the data around your brand and bring insights.


Now, it’s not just about my entire brand.  It’s about the products inside my brand.  Here I’ve added an additional filter so I can specifically look at the Marston’s beer brand products.  You can see my locational insight is extremely interesting, because I’ve got all kinds of different conversations happening all over the world for a U.K. company.  And then I’ve got the same kind of things about the authors and the sources.  And then over here on the right we can actually begin to see the breakdown of the beer brands that they’re actually talking about.  So they’re mentioning Hobgoblin and Pedigree there, two of our flagship beers.

Now, I can keep going further, I can keep listening even in more detail.  So here I’m now down at the Hobgoblin beer brand, one of Marston’s beer products, and I can see a really interesting breakdown here of their sentiments.  It’s very positive.  The people that are talking about Hobgoblin are extremely positive about it.

But, wow, Satya, look at the breakdown of their conversation.

SATYA NADELLA:  They’re talking about it everywhere.

JEFF WETTLAUFER:  It’s everywhere.  This product is all over the place.  So it’s really great to see, great positive energy about the marketing of our beer there.

Let’s go take a look at Pedigree, because that was the other flagship brand that I mentioned.  Now, while we see the conversation here is still extremely positive, very happy about the product when they are talking about it, we can see here that the locational information is far different, a lot lower volume, and far more distributed out there.  So we might want to do something about that.

SATYA NADELLA:  Now that you have that insight how are you going to take action on that?


So as a brand manager I might want to create some kind of a marketing campaign.  So to generate some excitement I’ve created, using Microsoft’s Dynamics Marketing product, a campaign to bring one of your friends into a Marston’s pub and get a free beer.

SATYA NADELLA:  And that’s the key, to be able to take these systems of engagement that you have, like Dynamics CRM, and then marry it with something like the social engagement, which is really a system of intelligence, but really the bringing together of these two is what drives the next level of transformation.

JEFF WETTLAUFER:  Exactly.  So let’s show them how we can engage on that using this information.

So here’s my campaign landing page; I’ll be directing people to go here and fill out their information.  That will give them a voucher to head into one of our local pubs and get a free beer for their friend.  So if I jump back over here I can bring out the right side, this is my summary of posts about Pedigree.  This is a summary of all the conversations on Twitter and Facebook, and all those kinds of locations people were mentioning our brand.  And I can directly interact with these people.  So I can simply hit reply on this tweet.  I can hit a paste in there and that’s going to drop my little note to that person bring a friend, get a Pedigree and the link to the URL to go and redeem that voucher.

SATYA NADELLA:  That’s great.

JEFF WETTLAUFER:  So a great closing the loop there, showing you how Marston’s is using the Social Engagement application service from Azure to actively listen, analyze those conversations, and then directly engage with them with additional information.

SATYA NADELLA:  That’s fantastic.

JEFF WETTLAUFER:  OK.  So we’ve talked a little bit about weather data and a little bit about social data.  Now why don’t we focus for a moment on an industrial automation company who is using data in a different way?

Rockwell Automation is an established company.  They have been around for over 100 years, and they have been known to make very advanced and complicated system controllers and drives and sensors and actuators.  And they’re all over the world.  Rockwell Automation is based in several major verticals.  And to name a few, they have a presence in automotive, and food and beverage, and oil and gas, and even places like power generation.  Their stuff is everywhere.

So here I’m looking at their Azure-powered portal, which is connected to the Azure IRC Services.  This is a summary of a collection of technologies being used by Rockwell Automation.  It’s using things like stream analytics and service bus as well as the machine learning to bring to me a collection of data about their assets their customers have purchased.

SATYA NADELLA:  But I mean it’s a SaaS server, it’s a software service that they have built, like any software company would build, for their industrial things that are everywhere in the field.

JEFF WETTLAUFER:  Exactly.  And they’re using this dashboard to monitor several things, highly complex assets, but they’re using this to measure health and performance and customer satisfaction, all these kinds of things.  So you can see here a really rich dashboard showing me the different types of things they’re using measuring for extraction and refining, logistics, and there is even presence in retail.

Now for the purposes of this portion of the demo, I’m going to focus on their extraction locations, which is all their mines and wells.  Now, these are all over the country, even offshore in the ocean spaces.  And you can see here I’ve got an ability to drive in and see different types of information about those locations.  So I can circle in there and drive even further into a specific location.

But at this level I’m presented with the high-level summary of locations and the alerts that might be presented there to me.  Now I want to pause here because I want to highlight something that’s a transformational shift for Rockwell Automation.  Up until a couple of years ago, none of this information was available.  Rockwell Automation was using handwritten index cards that were left at the transfer points out in the middle of maybe say Texas, and those transfer cards, those information pieces of collateral were being picked up every several months.

So it was really quite a latent process.  It wasn’t accurate.  And at this level, where we see a schematic diagram of a deeply connected asset, they weren’t getting the real-time information about the performance and the health and even the quality of the products that they were delivering off of that location.

So you can see here I’ve got a connected schematic here.  You can see all the green locations on that asset are where that transfer point is being monitored.  So these are sensors, pumps and drives that Rockwell Automation is monitoring on behalf of their customers.

SATYA NADELLA:  And this is all real-time, so you are able to now monitor in real-time, in fact do things like anomaly detection because of the ability to process that stream in real-time.

JEFF WETTLAUFER:  That’s correct.  Exactly.  Real-time.  We’re looking at things like barrel count, volume outputs, product quality, and even things like temperature.  Now you can see I’ve actually got an alert happening here.  So I’m just going to drive on that for a moment.  I’m going to select that fan there, which is inside of the schematic, and it brings in to me an additional set of information about that specific sensor inside of the asset.

Now the fly-in page shows me a wealth of information that simply was never available before.  Here on the top I have the air filter summary, the part numbers, when it was last replaced or serviced, as well as some of the current runtime temperatures, the current versus desired temperature and the deltas between that.

Now I would like to draw your attention to a couple of the graphs we see here on the right side.  The first is that mean temperature graph.  Now this is provided to us by Azure’s Stream Analytics Service.  We have a set of rules running against the sensor, and the yellow line represents where they would desire that sensor’s temperature to be, the red line is showing where it’s actually performing right now.  You can see we’re above where we would expect to be.

Now the bottom graph is where I also want to draw your attention.  This is a summary of information provided by machine learning. This is allowing us to understand in the gray bar there where we are today, and to the left of that graph, that’s past history, that’s historical data about how the temperature was operating versus —

SATYA NADELLA:  It helps you detect these anomalies.

JEFF WETTLAUFER:  Exactly, yes. Now to the right of that gray line, that’s where machine learning is using algorithmic calculations to tell us what it predicts will happen next.  And you can see here on the right we have a vertical yellow line.  That’s the actual next scheduled service maintenance trip out to that location.  And machine learning is suggesting to us here that we may, in fact, have a critical event before we have a chance to get back out there.

SATYA NADELLA:  That’s great.

JEFF WETTLAUFER:  Now because of the fact that it’s so deeply connected, we can get really proactive here.  So I can create a ticket.  This is going to reach out to my CRM system and avoid that outage and disruption.

SATYA NADELLA:  And in this case, you just saw Rockwell build, again, a software service for their devices and then connect it with a system like CRM and automate now both their system of engagement and their own ability to transform their business by doing these advanced analytics and predictions.

JEFF WETTLAUFER:  Exactly.  So I’ve shown you three examples today.  I’ve shown you how an organization is empowering their individuals and organizations with weather data.  We also showed you how an organization is transforming their business relationships with their customers through social listening.  And then I’ve just shown you an example of an industrial automation scenario where we’re providing deeply connected assets and real-time performance monitoring.

SATYA NADELLA:  Fantastic.


SATYA NADELLA:  Thank you very, very much.  (Applause.)

So that shows you how every industry is now a software industry where they are building these systems of intelligence, and you all will be transforming these business processes because you are digitizing information that was not digitized before, and more in particular adding value to that by doing things like these machine learning models, which do things like advanced analytics.

And so I’m really pleased to announce the coming together of all of these technologies from ability to connect data up onto the cloud; process them using the Stream Analytics Services; do these sophisticated machine learning models using Azure ML into one comprehensive suite called Azure IoT Suite, which will become that core infrastructure for you to be able to build out these SaaS services like the examples you saw.  So we’re, again, very, very pleased to bring the power of the Azure cloud and the data platform together so that you can drive the transformation of your business going forward.

So I wanted to close out by talking about perhaps the most important aspect that’s going to drive the business transformations going into the future.  We talked about how empowering individuals and organizations and industries is going to fundamentally change our business.  But perhaps the most salient point of this is that empowerment, how do we make sure that the ability to have access to that data, the ability to act on the insight, the flow of patterns that we as humans recognize in data, the real power comes from our ability to exercise that insight in terms of action we take.

And this is where I think we as leaders of our businesses get to do the most transformative thing, which is to first make sure that everyone inside of the organization has the tools, has the capability to be able to gain these insights and then we empower them to act on those insights.  This data culture is very much the journey that Microsoft itself is on.

We as a business building software solutions, software platforms, and devices now, are constantly learning how are we using data to make better decisions.  But most importantly, how are we driving that data to every individual inside of the organization so that they can gain those insights and take that action on their own.  That level of transparency, that level of transformation inside of the organization is really what’s going to drive our journey together.

Thank you so very much for this morning, and I wanted to introduce Kirill Tatarinov to take over and then talk more about the next level of transformation with productivity tools.  Thank you very, very much.