Microsoft's new Cloud and Enterprise chief Guthrie on his new job, top priorities

Microsoft's Scott Guthrie talks about his new role, priorities and plans for the company's powerful Cloud & Enterprise unit in his first press Q&A since becoming part of the Microsoft senior leadership team.
Written by Mary Jo Foley, Senior Contributing Editor

Scott Guthrie, a k a "The Gu," as of last week officially was promoted to head of Microsoft's powerful Cloud & Enterprise division.


Even though he's now an Executive Vice President reporting to new CEO Satya Nadella, as well as a member of the inner circle (the Microsoft senior leadership team), Guthrie is still Guthrie. At Build last week, he still donned his trademark red polo (sans sport coat -- or hoodie) and spoke to developers in their language.

Guthrie joined Microsoft in 1997. He moved from Corporate Vice President of the .Net platform to head the Azure Application Platform team in the Business Platform Division in May 2011. He was appointed "interim" head of the Cloud & Enterprise unit when Nadella was made CEO. Throughout his time at Microsoft, he has been focused on developers and has made a priority integrating open-source tools and technologies into the Microsoft stack.

I had a chance to sit down with Guthrie in the green room at Build 2014 last week and ask a few questions. Here's the transcript, edited for length.

ZDNET: You became acting head of Microsoft’s Cloud and Enterprise (C&E) business about two months ago. You now oversee Azure, Windows Server, SQL Server, System Center, Visual Studio and .Net -- quite a few of Microsoft's billion-dollar businesses. How has your job changed with the new role?

GUTHRIE: It's been a bit busy. I've been in C&E since the beginning, I mean, even when we first created Server & Tools. So the good news is I've been around the division for a long time, and I've had a chance to work with most people in the division over the last (decade plus).

It’s certainly a different role but the good news is I have a lot of context and a lot contacts. A lot of my time in the last 50 days has been coming up to speed in much more depth on some of the projects in the areas that I haven't worked on in the past and connecting with people and working with the leadership team as we plot out our next year's plans, and what all we need to get done.

ZDNET: What were your biggest takeaways from Build 2014 last week?

GUTHRIE: I’m kind of close to it, but from what I've read online and the mood in the hallways and on Twitter and things, I think it seems like this Build went very well. I think generally there's just sort of a positive meme that people have, that they see us executing. I think that Satya's quote about having the challenger mindset really resonated with people. I think they're seeing us be both humble and confident, and I think hopefully they've seen across the two days a bunch of great innovation, and kind of also much more optimistic in terms of where the future is going.

ZDNET: It feels to me like there's a very different message going out from Microsoft than there was just even a year or two ago about the importance of .NET, especially around its open sourcing. Do you see this as a recalibration or more of a continuation of the course?

GUTHRIE: From a product perspective there's a continuation. On the server side and with a lot of our .NET investments, I think we've done a good job the last few years of innovating and also being very customer focused. And some of the feedback on some of the most recent ASP.NET releases, has been very positive. People are saying we’re solving key pain points and innovating in some nice ways.

And so I think from that perspective, I wouldn't necessarily say we've changed anything dramatic. But a lot of what we've done on the server side is continuation of stuff that we set in motion a few years ago.

Some of the openness that we've embraced in terms of the ability to target different devices, the ability to build different things and delivering more of our code under an open source license is something that resonates.

On the client side we're doing something similar as well. (We have the) notion of universal projects, universal applications and how I can help build across the three screens with C#, C++, and HTML/ JavaScript. I think people liked hearing the openness, they liked seeing the strategy and feeling like all three were valued.

ZDNET: Where are you along your timeline for Azure? What do you feel you really need to focus on in the next year? And how do you feel you stack up against the cloud competition these days?

GUTHRIE: I've been on Azure about two and a half years now, a little over two and half years, and it's been a fun journey. I feel like each event is growing in terms of the number of new things (we deliver), the capability, and then more importantly, the number of customers that are just building amazing solutions on top of it.

I think one highlight for me in the Build keynote was having all these great customer stories that are not just nice references but also (customers) doing groundbreaking stuff. It’s always nice to have one of those, but it's even nicer when you have four of them or five of them.

I think we are in a place where we're really starting to see some great momentum and some real differentiation. I told my team recently I feel like we're near the end of the beginning as opposed to the beginning of the end. There’s a bunch of stuff over the last two years where we've had gaps that we fill in or basics that we needed to get done. We’re approaching the point where there's no longer a big list of items that we know we have to do. Last year was really about concluding that, and this first half of 2014 is the tail end of (accomplishing) those things.

You’re starting to see us really starting to differentiate a lot more. In the Build keynote (on day 2), if you looked at the infrastructure as a service and even the things like the Visual Studio debugging support -- which was a big crowd pleaser, as you can turn on debugging in any VM (virtual machine) in under 15 seconds and remotely debug it --there's no one else that can do that today.

If you look in the web space, things like traffic management and staging and auto-scale and the web jobs, while putting them together with that ease of use is pretty unique, there isn't another cloud vendor out there that does that exactly.

I think the mobile development demo that we showed where I can integrate enterprise single sign-on, write server side code in C#, deploy it, authenticate and then access Office APIs (application programming interfaces) is something that there really isn't any other mobile enterprise vendor out there doing.

And certainly I think the portal that we went live with is a pretty bold move pulling it all together and providing an integrated dev-ops story that no one else has.

So I look at that. I look at media, I look at some of the other work that we're doing and some of our services, and you're starting to see us turn a corner where we're really starting to innovate. And that doesn't mean we'll get every customer, but we're starting to have customers who even don't use Azure say, look, I'm impressed, that's pretty awesome.

My hope and expectation is hopefully in the next year you'll see a lot more of those pop up. I think if we can keep this momentum, both around the company but also specifically around Azure and some of the work we're doing there, I think it's going to be a fun year.

ZDNET: Could you talk a bit more about the portal? Why do you see the new Azure management portal, now in preview, as such a big deal?

GUTHRIE: The big reason I think it's a big deal is as people are moving to the cloud or building apps in the cloud, the apps are becoming increasingly sophisticated, both in terms of all the features they use but also in terms of how important they are.

One of the things that (NBC Senior VP) Rick Cordella said during the keynote was they paid a billion dollars for the rights to the Olympics had 17 days to make it back. When you build a solution, it's got to work. A lot of the cloud projects I think that companies originally did were -- I don't want to say 'toy' projects, but they were kind of non-core projects to the companies. Now we're at a point where the cloud is increasingly mission-critical.

How you build projects where you can understand health, diagnose the problems, understand how to tune, and be able to do that very, very fast in an accurate way is hard. The new kind of portal experience and the new management stuff with Azure is really transformative, in the sense of it makes it easy to fall into what I call the pit of success as opposed to the pit of failure.

The tools and the diagnostics and the analytics give you that for free. You suddenly raise the expectations on every dev team. I now have analytics about my users, my performance, my reliability without having to do anything. And it's going to ultimately help you build much better apps. We will add more features into the portal and more services into the portal. Today's just the start.

I think we're going to find it actually a big differentiator in terms of customers saying I can actually get my whole organization -- regardless of whether you're using Visual Studio and .NET or whether you're building with Xcode on Macs – to use Azure and I get a global view of all my services. I can build much better apps much faster.

ZDNET: How is the Azure team using Bing on the back end?

GUTHRIE: We’re doing two things really. One is a lot of the core infrastructure that Bing used is now part of the Azure team. And so we are using those learnings and some of that code to build both our first-party infrastructure and our third-party infrastructure. Our goal ultimately is just to have one infrastructure. And so we're marching steadily down that path, and we've had a tremendous amount of convergence in the last two years.

And then there's a bunch of pretty advanced features inside Bing that we'll be productizing as well that are not public yet.

I would also say there’s a third element – which is just a whole bunch of learning. We might not necessarily productize even the code, but especially in the space of machine learning and data analytics, some of the engineers in Bing just have tremendous insights. And so we're also looking to leverage those insights to help build other things.

ZDNET: What’s it been like having Nadella as CEO?

GUTHRIE: One of the things that's been very nice with him in the CEO job is bringing that engineering perspective and that product perspective. That’s something that has resonated not only with Microsoft employees, but one of the reasons why, when he comes (to San Francisco) and he talks to VCs or he talks to partners, they really resonate with it, as well.

ZDNET: I hear from a lot of Microsoft IT pros who are worried about their futures because of the cloud. What are you guys thinking about how to bring the IT pros to buy into Microsoft’s increasing push to the cloud?

GUTHRIE: I think the cloud is going to become more and more important for organizations. Every time we've seen productivity wins or we've seen technology changes in the computer space, we've seen investment in IT grow, as opposed to shrink.

And so if you think about going from mainframes to minis or minis to PCs or PCs to the web or client-server, all those trends were changes and some of them scary changes, but at the end of the day, there was more percentage of GDP in IT than there was before, and there were more jobs in IT than there were before.

I think it's natural that some people are worried about the cloud. I don't think the role of the IT pro disappears. It will probably change in some ways. The technology will change and some of the responsibilities will change. But at the end of the day, if the cloud enables us to do more, I think there will be more jobs and there will be more needs for people as opposed to less.

And I think it's something that I didn't have time to talk about necessarily in my keynote, but if you think about the examples that we talked about, you know, take Titanfall, it's a 90-person company, and they have over 100,000 virtual machines running. That's amazing.

You think about the NBC Olympics. How do you stream 200 channels live to millions of people? There's no ROI that says you should buy that many servers and run them in a traditional thing. Even take the Getty Images. If you want to update a photo in seconds from the point someone takes the picture, like it's just a fundamentally new type of app experience.

The positive thing with the cloud is that there are so many new use cases that didn't exist before, and they actually make all of our lives better. And, again, as we become more and more digital, we are going to need more and more people to support it.

ZDNET: What are your priorities for the Cloud & Enterprise unit, going forward? What are you are most focused on seeing happen?

GUTHRIE: The thing I’m focusing a lot on right now is how do we connect even more with customers. It's sort of my standard shtick or my standard playbook. How do we get our teams to be even more connected with customers? How do we really think about how we can differentiate and what's the special sauce that are going to really delight our customers, and how do we execute really well in terms of making that happen? And how do we have a compelling vision that can serve as our North Star as we move towards that?

There are a lot of specifics and a lot of details, but those are the four things that I'm spending a lot of time on with the leadership team of Cloud & Enterprise. How do we get aligned on those four things and how do we measure continuous improvement?

One of the nice things also about the cloud is you can measure your progress on a day-by-day basis. And so you know how many people signed up in the last 24 hours for a service, you know how many people churned, you know how many people are actually using it, and you know what features they're using. If we're not seeing the signups we want and we're seeing higher churn, what are the changes we make in the product or the pricing or the positioning? We can know within a week whether or not -- or even within a day -- did it make a difference?

Once you embrace that kind of model, it ends up being really fun, because you can experiment and you can see things and try things very quickly and be very analytical about it. It frees you to actually make some bold bets and experiments because you know you can get the signal quickly as to whether or not that bet paid off or not.

At Microsoft, if you see good data, it's really easy to rally the whole team around it. And so being able to be very agile and look at that data in real time ends up being a great motivator for everyone.

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