from fairfax this morning, 8th february 2019. "The turnaround at...

from fairfax this morning, 8th february 2019.

"The turnaround at Microsoft has been powered by its Azure cloud computing platform...


Microsoft is now the grown up in an industry full of problem children



By John McDuling

February 8, 2019 — 12.00am

Microsoft's Australian chief executive Steven Worrall has a message for the nation's tech sector: grow up.

OK, those are my words, and definitely not his. But speaking to Worrall on the sidelines of a Microsoft event this week - the software giant unveiled a new hub in Sydney’s CBD where clients can experience its technologies - you get the sense he is a bit frustrated with the state of the discourse over innovation in this country.



Apple or Microsoft: Which is the world's most valuable company right now?CREDIT:BLOOMBERG

"Disruption is here to stay, and it's been here for some time," he says. "There are many opinions...but if you are not looking at ways to adapt technology and find ways to utilise technology, you are probably on the wrong track."

The $US822 billion ($1.1 trillion) company behind Windows software, Excel spreadsheets and X-Box gaming consoles is in the midst of a remarkable resurgence. It is currently vying with Apple and Amazon for the mantle of the world's most valuable company, a title it last held in 2002. People are no longer dismissive ( in fact, they're supportive) of its Surface tablets. Even a SuperBowl commercial it aired on US TV this week won plaudits.

The turnaround at Microsoft has been powered by its Azure cloud computing platform, on which it hosts software and rents out web infrastructure to big corporations and government departments. Wedbush Securities analyst Dan Ives this week described Microsoft as a "cloud behemoth", now in a two-horse race for control of that lucrative market with Amazon (Google is a distant third).

For his part, Worrall puts the Microsoft revival down to the internal changes put in place by global chief executive Staya Nadella, who took the reins five years ago this month. There has been “a fundamental rethinking of our culture, who we are, what we stand for, how we want to show up,” he says.



Microsoft Australia CEO Steven WorrallCREDIT:MARK NOLAN

"There is plenty of technology around, but it has to be people first, technology second, because ultimately enterprises, governments, organisations, are populated by people."

All of a sudden, Microsoft has become one of the few grown-ups in tech, an industry increasingly defined by its problem children (most prominently Facebook, which has lurched from scandal to scandal over the past year, but there are plenty of other examples in start-up land).

Fittingly, then, when it comes to the debates that have raged through the local tech sector over the past year, Worrall offers a much more measured tone than the hysterical voices that tend to dominate industry discussion in Australia.

Take immigration. When the government abolished the 457 visa scheme last year, there were howls of outrage from entrepreneurs, who said the changes would grind the fledgling local sector to a halt and relegate Australia to a tech backwater. That has not happened, and Worrall, for one, isn’t surprised.

“If you are looking at Australia at an economy level, we have had 28 years of [uninterrupted economic] growth. We want to move our economy forward, do we really think 3 per cent of the workforce (on 457s) is going to be the reason we get there or not?” he says.

“It’s not that it doesn’t matter, it’s just putting it into context. Of course we need skills, but it’s not the issue that is going to hold us back.”

The onus is on big companies to re-skill workers to be able to work in the new economy, he says, which Microsoft is doing.

On encryption, he is similarly sanguine. The laws rushed through parliament on the last sitting day of last year with bipartisan support horrified the tech sector. There were claims that local startups would be locked out of offshore markets, and that major tech companies would cease doing business in Australia. That hasn't transpired, either.

Worrall isn’t exactly glowing about the laws (a lobby group Microsoft belongs to formally opposed them) but he doesn’t flat out condemn them either.

“Things move quickly in technology and as a government your number one priority is to protect the citizens you represent,” he says. "Is it a surprise we didn't get it right the first time? I don't think so. These issues are pretty complicated.”

Of course, Microsoft makes a lot of money from government departments around the world, including in Australia. That, to some extent, may explain his reluctance to criticise policies.

For tech shareholders, making money from governments is also vastly preferable to being hauled before them to explain your business model.