Global information and communications technology giant, Microsoft has been at the forefront of the innovation spectrum, churning out cutting edge software that has reshaped the business enterprise landscape. The conglomerate’s portfolio, spearheaded by world’s richest man, Bill Gates and partner Paul Allen, expanded rapidly; stoking competition in diverse industries including gaming, cloud computing and much more recently the mobile space – with its acquisition of Nokia. It has experienced dips at several times and has been known to struggle in certain sectors, particularly the mobile industry.
Ventures Africa had the opportunity to chat with Anthony Cook of Microsoft, Associate General Counsel, Legal and Corporate Affairs, Middle East and Africa, who offered perspective on the challenges of competing on several fronts, building a cloud computing empire and delving into the mobile space.
VA: Let’s start with the cloud. Can you give us a brief of review about what cloud computing is?
Answer: Sure. I think the way we think about cloud computing is really two things; first thing is the notion of cloud computing as the idea of using shared infrastructure, resources and really being able to then access services provided by companies like Microsoft in order to access information technology. We have what we call public cloud; what most people are used to, and that is where you use a large provider like Microsoft that has built large data centers and provide infrastructure that offers services for very low cost or generally for no cost. There are other providers that have such services and that rely on all infrastructure. Shared infrastructure is not dedicated to only one individual, or only one company and it gives the advantages of having tremendous scores, having tremendous flexibility, and a lot of cost savings.
There is also the private cloud, which is more of a dedicated infrastructure that is being shared, but shared within an organization and protected by a firewall. So, typically, we used to have something like say, government will build an IT infrastructure in a department, so a private cloud may be that you will create infrastructure that will span across the whole of the government but is still limited to just the government. So there are some advantages in that it’s much more customizable. You can customize it based on perhaps applications you want to run, for security or other reasons. And we have what we call a hybrid cloud, in which an organization provides and manages some resources in-house and has others provided externally. I think hybrid cloud is very interesting for countries like Nigeria and for developing markets in particular, because it allows you to deal with a couple of issues that tend to be more of a challenge here. One of those is the issue of regulatory uncertainty or regulatory restrictions. So, if you have laws that are not defined, or if you have laws that are specific to an industry that says you must keep data in one particular way, then you can use the private cloud components of a hybrid cloud if you like, to meet those requirements. But if you think about Nigeria with the thinking around having a national cloud with data that has to be stored in Nigeria, that will blend itself to a private cloud scenario.
VA: With the hybrid cloud, you are saying that services like document sharing is easier because you got one local or more local server which you share data with and you also have access to it internationally?
Answer: Correct. Let me say, a provider like Microsoft in a hybrid cloud, instead of having applications used just when you are on premises and different application used just when you on cloud, you will have one application that you will get different functionality out, depending on whether you are opening the cloud or not. When you think of Office…Office is a good example so you can have Office 365, which has description base by cloud service that you can get access essentially to any device, and once you have credentials from your company to do so, you can do that anywhere and it takes advantage of the mobility companion. You can also have a copy of the Office for those people who maybe do not have good internet connectivity, and what you are getting is you are getting the same user experience; so they are able to use office and they are able to flip between different types of activity application and at the same time, with backing from the company’s perspective. Your ability to move between the two environments is much easier.
VA: So I am going to ask about security. You know everybody is concerned about data or cloud data that is found all over the place, and that’s one. The second component is when people think about government spying. How does Microsoft deal with the question of security on the Nigerian business?
Answer: I will just deal with them separately, giving different consideration. We will work out how much we will dive into the government excesses issue. I think from a company security point of view, there are a number of things that we need to be clear on, first of all is the provider: what are those providers’ policies in relation to security? So that’s a big set of question because it comes down to where will my data going to be stored? Do I know what’s going to happen to my data? Do I know what sort of precaution and approaches that the company taken in relation to security, to physically look after my data? We spend a lot of time and money on our services to meet international standards.
I think there are a lot of providers in cloud that are trying to do that, so that’s a very important component. I think the other thing that is critical to consider in relation to security is, ‘if I’m in an organization, how much do I have to invest in security to actually deliver the level of security I expect?’ So, we offer one of the advantages; you are actually getting hands-on security because, we have all the capability to invest in security, we have security professionals, we have security capabilities that really most companies just cannot afford to invest in. So, the level of understanding of the capability that we can or have in relation to security is just a lot higher than most organizations so when you translate that into the real value proposition cloud is offering for small medium enterprises. The ability to likely keep the data much more or fewer is probably much greater than the individual companies in themselves so that’s why such issues translate, if you like, into the government access issues. So, how do you establish good trust and how do you establish trust in services?…because people have questions. I think it is fair to say that in the last twelve months, trust is being put to the test and being put to the test is largely as a result of disclosure which led to a lot of questions being asked about what sort of relationship did the government have, what sort of access do they have to information and so we were largely surprised by those disclosure and I think we have responded to national security request in accordance with the law in US for right period of time but we were not aware with the sort of programs that were announced when the disclosure came in so what we did as a company was to think about it really fast. We thought about what we should do as a company to make sure people feel secured in relation to our services and what do we really need to do as an industry participant to also make sure that as an industry we are sure that people have confidence in the sort of services that cloud services provides. And I think the reason why we thought of it in two dimensions is obviously because there is a self interest in us making sure that our services are secured and people have confidence and trust in our services but I think equally there is an overall industry benefit and overall Industry concern that this industry has so much capability to contribute to economic growth beyond the corporate needs and if we don’t create the right environment for this to happen, it will not only allow contraction for our business but also a lost opportunity for economies not just in the US, but more broadly.
VA: I think most people, when they think of Microsoft, they think Windows, Word… ‘So Bill Gates invented windows right?’ But it sounds like you guys are doing much more. Just to educate our readers, what other services does Microsoft provide beyond software?
Answer: So, that’s a big question. I will describe it in a couple of ways and I think firstly, Microsoft is large in enterprise. It’s a very significant enterprise software business. In fact, by measure I don’t think I have the data but just about any measure; we will be the largest enterprise software company in the world. So when I’m talking enterprise software, I talk about data bases where bigger data bases are in oracle. I talk about all the plumbing infrastructures companies used to run their ITs systems, so we have Excel services, we have Windows services, we have Business Centre and we have a lot of management serving products…and that’s a huge business for us.
VA: Microsoft has not been really competitive when it comes to mobile devices, especially with Google offering a cheaper alternative with phones that run on android operating system. How do you expect to push more activity in this part?
Answer: It’s a great question. If you particularly think around what has happened to Microsoft over the last couple of years, I think there is no question that from a mobile phone perspective, we are not where we will like to be; we have taken important steps to solve that; one of them was the acquisition of Nokia; that’s a very important step for us. Although Nokia had its own challenges, but at the end of the day, Nokia has been very effective in using and developing and distributing the products and devices across emerging markets. They are very strong in India and very strong in Africa and very strong in China. In fact, they are near businesses that affect their larger business. So that was an important step for us. The other thing is that this is really being as much of a directional shift of our new CEO, who has identified with mobile phones and cloud computing. We start thinking, how do we grow the Microsoft business in that context and with what you have seen in the past three to six months, you have seen some really important announcements that really demonstrate how we are going to be investing in that. Firstly, you have seen the announcement that Satya Nadella  made around making office available on the iPhone and the iPads. The announcement really shift the thinking and showed that Microsoft is not going to be focused just on delivery services in its own platforms but providing services in other platforms as well.
VA: We talked about the security issues, but there are a lot of contractions going on connectivity of networks, the way you get to use your phone, connect with your phone. So how do you think of this limitation and how accurate is your strategy for this?
Answer: I think the way that we will impact cloud computing is a little bit of what I talked about in the hybrid cloud environment. So I think you will see the adoption of cloud in ways that will reflect the infrastructure limitations. I think if people think about the differences in data and the different ways they can use data, then it will also reflect the differences in the way people want to treat the data within the context of the infrastructures that they have. I think there is a lot of opportunity for using services and using infrastructure like that.
VA: Where do you see Microsoft, Internet usage, Microsoft word in Africa in the next five years?
Answer: I believe there will be quick growth in these spheres, especially in broadband. It may be at the level where we will see a developed market in five years time, probably not, but I think the cost of computing, the cost of doing some of these things will reduce. I will say one thing, there is a lot of creativity in Africa, and I think the skills in Africa will be taken advantage of. I will say five years is probably a short time if you look at the skills steps which needs to be filled, but I think that Nigeria is a very good example in the level of creativity from a creative industry perspective. I look at the large markets in the region; somewhere like in Ethiopia have incredibly creative people that find genius solutions to things. So I think there is a lot of opportunity that we will get to explore. I think that will probably still be more in its infancy than it would have really taken hold, but I think it will happen. Then I think there will be some governments in the region, who will decide to invest and will create capabilities within their economy to accelerate that. At Microsoft, we have a lot of investments in Africa; we have been in Africa for like 22 years. We have nearly a thousand people in Africa in terms of employment and importantly for us, we have a very big top rated system that we will continue to invest in and also continue to develop. So from our perspective, our business model has always been dependable upon making sure that we have great partners that are local partners that are very stable to work with; local companies to solve the local business needs. And where I would like to see us predominant or be a major player in is the cloud environment which I think we are in many respects already. But I think we will translate them into mobility and one which people then use entertainment and access entertainment on different devices and which I think will be where I hope for us to be and where we are certainly targeting.
