Episode 61: Building Microsoft Azure with Scott Guthrie
Scott Guthrie shares his experiences at Microsoft as the company has shifted its strategy and corporate culture. He answers questions about Azure, working with partners, and why Microsoft’s customer-first focus has led to multiple learnings across the organization. There are few people with such a perspective in the industry, and Guthrie provides key insights for those looking at cloud solutions, or anyone considering migrating from on-premises to cloud architecture.
About Scott Guthrie
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Corey Quinn: Welcome to Screaming In The Cloud. I'm Corey Quinn. I'm joined today by Scott Guthrie, Executive VP of the Cloud and Enterprise Group at Microsoft. Welcome to the show.
Scott Guthrie: Thanks for having me.
Corey Quinn: Always a pleasure. So there are a number of large public cloud providers today, but you obviously are Azure more or less there. I don't know that there's too many people above you in the corporate pecking order as I understand things as far as running public clouds go.
Scott Guthrie: Sure, yeah, no, I am responsible for Microsoft Azure as well as our Dynamics 365 offering. And then also things like Power BI, PowerApps and Flow, which we call our power platform cloud. Then also GitHub and then Visual Studio and Visual Studio Code and then the core Windows operating system. So kind of a broad smattering.
Corey Quinn: Oh, is that all? Oh good, good. And in your spare time... Yeah. This is sort of a high level question then, but what is the Azure philosophy from your point of view, what is it that differentiates that from the competitive offerings out there? I don't believe the easy explanation of, "Oh, we see another company building a public cloud and doing super well with it. We're going to do that too." I think to even suggest that is a bit of a disservice to the very intelligent people who work here.
Scott Guthrie: I think there's several things that I think probably differentiate Azure in some unique ways. I think the first is really our philosophy around hybrid, which is something that we've really had since the very beginning of the product and the service, and really thinking about hybrid kind of very holistically. It's not just about infrastructure because that is, no one just does infrastructure. It's really thinking about tooling. It's thinking about your developer tools as part of that tooling. It's about thinking about your operating systems, your data platform, your AI capabilities. It's about thinking around security and management and it's really about thinking about having a control plane across all that.
I think for large organizations or really any organization that's been around more than five or six years has existing investments that they've got that run their business and making it easy for people to take advantage of those investments as they move to the cloud and do it as seamlessly as possible is probably the single biggest differentiator that we've had for a lot of customers that have moved to Azure.
I think the second thing that we really differentiate ourselves around is thinking about Azure and cloud platform in a much broader context. Meaning it's not just about customs systems and cloud infrastructure. It's really thinking about how do you integrate that with your end users inside your company or the end users that are accessing your systems. That's where things like Office 365 and Dynamics 365 and our power platform capabilities come into play.
Certainly for large organizations as well as small organizations, that ability to more easily integrate the custom apps that you build, which where you're going to want a cloud provider like Azure or AWS, with the end users in a much more holistic way, is one of the key things that everyone struggles with. We make it really turnkey and easy, whether it's around identity, whether it's around data access, whether it's around compliance, all the way through accessibility.
I think the third thing then is, I've talked a lot about enterprises and some of the listeners on your show are probably thinking, "Well I'm a start up, but I'm building apps. Is Azure just the cloud for enterprises or for businesses?" The other third angle that we really differentiate is through what we call our co-sell program. That basically means if you're a startup or you're software vendor that's selling to businesses, we have a unique set of offerings both from a technology perspective with Azure, but then also with what we call co-sell, where we give you the access to the world's largest enterprise sales force, which is the Microsoft sales force. They all get quota relief when your solution that's built on Azure gets sold to their account.
Then we also have the world's largest channel partner network. So we can help put hundreds of thousands of people to bear who basically a compensated when your solution gets sold. That is another unique thing that we have in addition to that end to end cloud, in addition to the hybrid, that together has really powered Azure's success.
Corey Quinn: When you lie awake at night, right before you fall asleep or try to fall asleep, and you think about the entire ecosystem of Azure. What keeps you up at night worrying, assuming you're the worrying type?
Scott Guthrie: Well, you know, I think the thing that's unique about cloud all up is just we're at an inflection point as an industry where cloud has gone from being a small part of the market to really being the future and being the thing that's not just the future but the here and now. So thinking through as we become more mission critical for the world, how do you make sure you deliver that robustly? How do you make sure you deliver that securely? And recognize that we've got hospital operating rooms. We talked about some of them in my keynote today that run using Azure. We've got airlines that can't fly with Azure. You've got banking systems that can't transact.
So how do you deliver that rock solid reliability knowing that the whole world depends on it? That's something that I don't think you're ever done with. All the cloud vendors, I'm sure not just me, but my counterparts in other clouds as well, that's probably the single biggest thing that keeps us up at night. Then how do you do it at the scale that we're all operating at, which is increasingly now measured in the millions or tens of millions of servers, hundreds of data centers and I can't even count how many miles of cabling that we all have.
Corey Quinn: All of them. Approximately all of them.
Scott Guthrie: Yeah.
Corey Quinn: It's strange in that if you take a look at what's been happening the few years, among other things, you've managed to hire some amazing and incredibly talented people who all throughout Azure. I mean you take like Emily Freeman, Chloe Condon, and Tara Walker, Ashley McNamara, and insert 5,000 other names here. How do you do that? I mean these are people who generally do not have credibility for sale, so it's not as simple as just back a truck full of gold bricks up to their driveway and drop it off. There has to be a narrative and a story that's compelling. How are you, I guess, hiring some of the most influential names in tech?
Scott Guthrie: Well, you know, I think one of the things that we've tried to do, I mean there's obviously the tech, what we're building. I think there's a lot of really cool, amazing things that we're building from a tech perspective. I think the other thing that we've really tried to do as a company, and we've been kind of public with it the last five years, is really reboot our culture and really reboot the company in a broad way. Some of that is around tech. People say, "Oh, Microsoft's become a cloud company as part of that reboot." But a big part of it comes down to culture. We like to kind of say, "Culture eats strategy for breakfast." So you can have the best strategy, you can have the best tech, but if your culture is not right, at the end of the day the culture is going to decide your success.
We've tried to have a culture where we say let's put our customers at the center and really change the way that we partner both with our customers, but even collaborate internally, and create what I think a lot of people think of is a pretty exciting place to work. I think ultimately that has been, for a lot of the names that you mentioned, why people have joined us as they kind of see that culture change. They're hearing about it from some of their friends that work at Microsoft. Then more importantly, when you have a customer centric culture, the great thing is you get to celebrate with your customers when they are successful. So in my keynote today, we had BMW on stage, we had Asos, which is a big retailer in the UK, Kroger, Coca-Cola, Virgin Atlantic Airlines, and a whole bunch more. So being able to kind of celebrate and deliver on some of the transformation that all those had, it's super fun and it's kind of addictive. It brings some of the best talent that wants to work on those hard problems.
Corey Quinn: It really did seem that all of the companies mentioned in your keynote were very aligned with solving real world problems here in reality. These aren't companies that are eight or 10 years old that were born in the cloud. These aren't the Twitter for pet startups out of San Francisco. These are household brands that have been around for a century or more in some cases, and it was a stark reminder that corporate IT or production engineering doesn't always look like a startup in the bay. It very often, much more frequently is a hospital in Duluth. It's an insurance company somewhere in Omaha. There's a whole world of serious businesses out there that I think Microsoft's doing a fantastic job addressing.
Scott Guthrie: Yeah, man. I think one of the things that sometimes in tech, and we're guilty of this too, so this is not a statement about others. It's easy for us to kind of assume everyone is like us or everyone knows what we know or everyone does it the way we do it. I do think that's a common thing that I see my own team struggle with at times. Certainly I see other companies struggle with is kind of assuming, "Oh you know the latest edition of this and you're a member of the repo and you've seen all the check ins" How do you scale that out to an organization that's using it that might be a hundred people somewhere else in the world? They might be 100,000 people somewhere else in the world. That's when the stuff gets hard.
Part of what we've tried to do throughout our history, I mean even if you look at where the company was founded 40 years ago, is really try to democratize technology and not require you to be a rocket scientist to be able to deliver great solutions and be successful. We've done that with operating systems. We did that with development tools. Our very first product was a development tool. A lot of people forget that about Microsoft. Even you see that in the roots today with VS code and be VS and GitHub, that's still very core to our DNA and it's really around empowering people to do more.
I think when you do that, then the great thing is more people do stuff and that's been a core strength at Microsoft for 40 years. I think it's definitely, as we think about cloud transformation, it's empowering people to use leading edge tech. So you can also just make it point and click and simple. It's really around how do you use Kubernetes? How do you use the latest AI models? How do you use edge computing? How do you really push the boundaries of the tech but do it in a way that you can accelerate your success because between the tools and the end to end focus, hopefully we make it easier to adopt and ultimately be successful with it, which is what matters. That that earns you fans. That's been the key part of our success.
Corey Quinn: It strikes me just from a marketing and messaging perspective that Microsoft's approach to hybrid has been very different than what I'd say almost anyone else's has been. Again, Microsoft has a history of back when hybrid and the only option and there's a 40 year business case here. So for what you're doing and with the customers you're seeing here is having something on prem is not a new way of thinking. This has been around for a long time. The idea of burn the boats and the data boxes behind you and go all in and move everything to the cloud is simply not tenable for an awful lot of these use cases, nor should it necessarily be that way.
I get the sense you're one of the only providers that seems to be approaching this from a position of that's okay even as a mid to long-term strategy rather than as a temporary pause until they set fire to the data centers, move everything into a cloud and then yay, everyone's going to be happy and a success here.
Scott Guthrie: I mean, I think there's two angles to think about, three angles maybe to think about that. One is just as a... We certainly believe in a big way on cloud. So it's not that we are saying hybrid because we're trying to kind of cloud wash on prem and say, "Oh everything's hybrid now." We do believe that the majority of workloads in the limit will be running in public cloud data centers. Whether that's 60%, 80%, 90%, 100%, I don't know. But it's going to be the majority. I don't think we have any dissonance on that and we've been very clear on that. The part that I think we've been able to really provide something that helps our customers accelerate that is this hybrid approach in recognizing the fact that, let's say even if you do decide to turn off your on prem data centers, you're not going to do it overnight.
Even if you've decided all these workloads are moving into the cloud, you have this challenge, which is, okay, I'm going to migrate over the next year 100% of my workloads. I need to kind of keep all my systems running every single day of that year. I also not only need to make the tech work in the new environment and integrate with the pieces that haven't already moved, but I also need to make sure that I'm leveraging the skillset of my employees because I'm also not going to go overnight from how I used to manage things to becoming a complete DevOps automation expert.
Scott Guthrie: It doesn't work that way. Today roughly 60% of all databases running in the enterprise are running using Microsoft SQL Server. They might not be always the tier one databases, but if you look at certainly by tier two workloads, you know SQL servers, the dominant share in, we have a lot of tier one workloads as well. That ability to say, "Hey, let's move that to the cloud," and rather than bundle it up from bare metal servers to a VM, which gives you some benefits, but at the end of the day it's still managed as kind of raw infra, hey migrate it to be a managed service and we'll do backup, we'll do high availability, we'll let you run in a serverless option. We'll do built in threat detection. That's suddenly gives you a heck of a lot of capabilities.
Then when you can say to someone, "And by the way you can migrate it without changing a single line of code in any of your apps," that's gold. Because it allows someone that would otherwise spend weeks to have to test and re-update every app to suddenly build an app migration factory that lets them migrate many, many apps per day and again, use the same tools and the same languages and the same apps against it when they're done.
So you know we've done that whether it's with our own stuff like SQL server, we're doing it with Postgres, we're doing it with SAP environments, we're doing it with net app systems. We even support and give you the ability to run Cray supercomputers in our data center. We don't do a lot of those but a lot of, your in your oil and gas space, you still have a Cray somewhere that you're using for some of your HPC workloads.
Corey Quinn: There are dozens of us.
Scott Guthrie: You need to find a solution for it before you can turn off that data center. So you're thinking about it holistically has been key. Then most recently we announced our partnership with VMware and/or Dell Technologies, of which VMware is part of. We're the only cloud vendor that offers a first party VMware service meaning you can actually buy VMware directly from us and buy our VMware service directly from us. The beauty there is you can use the same VMware technology you use on prem, you can use that to migrate the infra. But then where we're differentiated say versus AWS, which has-
Corey Quinn: Yeah, because VMware has also been doing a fair bit with other providers too.
Scott Guthrie: The difference is you have a single throat to choke with us. So in the AWS case you've got to buy VMware from VMware, and then you're buying the cloud from AWS. The majority of operating systems running in VMware are Windows Server, and the majority of databases running in VMware today or SQL server. So having a single support model that you can then migrate that stack and know that both at the VMware level, the OS level, the database level, the identity level, all the way up through some of the office 365 work we've done with VMware as well, you can kind of have kind of a single support model and single integration, that's compelling. Again that's all about trying to make it easier for people to leverage the cloud by reusing the skills and the investments they already have.
Corey Quinn: Something I think that people take far too lightly about Microsoft is it's four decades of experience in having conversations with businesses about a wide variety of things and they speak that language fluently and that's something that the other players in this space tend to struggle with by and large. Somehow during the cultural transformation you talked about recently, that has gotten better, if anything. I can't deny it's been there, I mean 15 years ago I despised everything Microsoft and would never dream of even coming to a conference. Today if I were to admit defeat, shut down a company and go take a job somewhere, Microsoft be absolutely top of the list and I don't even know how you pulled that transition off, but it's widely recognized, widely understood and it seems to have only made your enterprise relationships better as you've done that. What happened and how did that look from the inside?
Scott Guthrie: Well, you know, it's a combination of things. I mean first, thank you for saying that. I think part of it is, a big part of it is really just that focus on putting the customer first. It sounds trite, but really if you put the customer at the center and work everything backwards, it's just so much easier to actually then talk to the customer when you kind of have your strategy be that. I do think that was a blind spot that we had in the past. Sometimes we'd say, "Here's our strategy, now let's go talk to a customer," versus the inverse.
So I think that is fairly deeply profound in terms of the transformation. Then I think the other thing that we've gotten better at is in what we build. Again, taking that customer focused approach. Let's be pragmatic even around how do we partner, what do we do to differentiate, versus how do we stop doing things that are just different? So if you look at our embrace of Linux, or if you look at our brace of Kubernetes or you look at our brace of chromium or electron with VS code, and chromium most recently with our own browser, those are places where I think the Microsoft of old would sort of say, "Oh, we're going to fight this sort of battle on licenses…”
Corey Quinn: And charge a license for every one and here's the terms. It's not being played like that anymore.
Scott Guthrie: Instead we're trying to really say, "Okay, how can we add unique value to our customers? Let's focus on that. Then let's partner and embrace the technologies are already mature and/or customers are already using. Instead let's focus on how can we be uniquely deliver value." That has been fantastic, and I think that's allowed us to really take all of our internal engineers and really have them work on stuff that our customers love. That's helped us from a product perspective.
Then I think the last thing from a sales perspective and engagement perspective, we have also tried to change not just our engineering model but also again, how we engage with customers. Really try to be a partner as opposed to a licensing specialist. Cloud is all about consumption. We, a couple of years ago, changed so that our salespeople don't actually get any credit for selling. I'll call it a monetary commit. Or someone saying, "Oh, I'm going to use a lot of cloud." They only get credit when the customer actually deploys and is actually successful using it and really changing the mindset to be all about consumption. That completely aligns even how we sell things to our customer's ultimate realization of value. So how do we as a sales organization, as our partner network, how do we focus on customer success? That also obviously changes the conversation as much as the tech does as well.
Corey Quinn: Even earlier today during the keynotes, sorry. Right now, you just mentioned a few minutes ago that partners are one of the keys to your success and that's very clear. During the keynotes and before the keynotes, I looked around the expo hall and I saw no partners wringing their hands nervously looking around wondering if they're about to be put out of business by something you're going to announce. It seems very much that you're invested in helping others succeed as you do as well. It's easy to say, oh, that's just temporary. But it's been how many decades so far and it's still is very core and central to what you do.
Scott Guthrie: Yeah, I mean the majority of Microsoft revenue comes through partners today. That is been true really since day one of Microsoft, and it's still true today. So I do think we have a large partner network, like hundreds of thousands of partners around the world ranging from partners that help customers implement and do kind of SI work to ISBs that build applications on top of us, to a channel partners that help reach smaller businesses. I think we have a deep appreciation for the power of partners. I think the thing we've learned over the years often by doing it right and occasionally by doing it wrong, is just how important it is to really curate those relationships with partners and really be good stewards of those partnerships. Because at the end of the day, you kind of build trust over a lifetime and you can lose it in an instant.
I certainly hope that there was not a single partner out there that had any surprise over anything we said in the keynote because I kind of view that as a fail if they did. A fail on Microsoft's part, if we did. That trust is super, super important. I think that's true, not just for longterm partners. You know, a lot of the partners I talked about in the keynote have only been partners with us for two or three years because it's really been part of this cloud transformation. Or maybe they were historically we're a Linux based solution and so they never even thought they could deal with Microsoft and take a Databricks or take UiPath. That was one of the startups that was in my keynote.
These are companies that maybe three or four years ago would never even thought of working with Microsoft, and yet now have a fantastic relationship and are really driving, we're helping together drive their businesses. I think it's definitely something we invest in. Then beyond the commercial side, I think it's also in the open source side, which I think it's probably different than other vendor's mentality, which is not just how do we support open source? Meaning we use it. But also how do we give back? If you look at VS code, which we've open sourced, if you look at .net, which we open source, those are examples of technologies that we started and then gave to the community.
But then, I talked a lot about some of the work we're doing with KEDA in Kubernetes or virtual kubelets with Kubernetes, or Helm, which is also built by my team and the Kubernetes ecosystem or Draft or others. There's lots of technologies where we weren't necessarily the incubators of the broader Kubernetes, but if you look at total contributions to Kubernetes or Postgres, most recently with the Citus acquisition that we did, which was big in the Postgres world. We announced a bunch of great hyperscale Postgres stuff today and we're giving it to the community. I do think it's super important to have that bi-directionality and really be not just a consumer of open source, but a real valued partner and contributor to open source. I think that that mindset of mentality, you'll see us continue to push forward on across everything we do.
Corey Quinn: To look at it from a slightly different perspective today, where do you think that Azure is currently being the most misunderstood?
Scott Guthrie: It's a good question, man. I think one of the things that from a startup perspective, especially for ones that are on AWS today, and obviously AWS has lots of startups, I think understanding how can Azure help accelerate your business is something that a lot of people don't necessarily fully understand. Both on the technology side, and I think increasingly with some of the AI tooling that we have, especially around the cognition services, around speech and computer vision, I think we've got stuff that is very, very differentiated versus other cloud providers and delivering some pretty amazing results.
I think the edge computing piece is an area where we're very differentiated. Then on a kind of non technical side, I think that the Azure Cosell program, and I mentioned UI path a little bit earlier on the keynote, they did a great video in my keynote talking about their sales success. I think they've closed over 200 deals with the Microsoft Salesforce.
The promise that we provide, which is if you're a startup and you build on Azure, every single Microsoft sellers going to get quota credit when their account buys your solutions. So if you're the Coke sales rep and you're a startup that's built on Azure, that Coke sells rep is going to get credit when you sell to Coke. Having that partner ecosystem and having that sales presence that can help on the sales side, I think is another key piece that I think when we walk a lot of startups through they kind of go "Whew, that's pretty differentiated." I think that's something that, you have to have great tech as well obviously, but I do think that combination of having some really differentiated tech but a super differentiated go to market, is something I'd love to have more people understand.
Corey Quinn: Perfect. Thank you so much for taking the time out of your day to speak with me today, Scott.
Scott Guthrie: No, my pleasure. Thanks so much for having me, and thanks for coming to the event.
Corey Quinn: Absolutely. Scott Guthrie, executive VP of cloud and enterprise group at Microsoft. I'm Corey Quinn. This is Screaming In The Cloud.
VO: This has been this week's episode of Screaming In The Cloud. You can also find more Corey at screaminginthecloud.com or wherever fine snark is sold.
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