Microsoft’s massive and important pivot to transparency

Microsoft's new focus on prevention and disclosure is paying off.

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(Disclosure: Microsoft is a client of the author.)

I’ve been following Microsoft almost since its inception largely because the firm recruited me early on, but I never even went to the interview, and viewed that potential career path as my biggest “road not traveled” alternative life scenario. But up through most of last decade, Microsoft was defined by a uniquely hostile employee environment particularly at executive levels and an antiquated proprietary lock-in strategy like the one that almost took IBM out in the early 1990s. That has changed massively under Satya Nadella who aggressively moved to both eliminate the crippling and nasty culture inside the firm and to make it a poster child for open source and rather than fighting competing platforms and approaches like Linux, embracing them.

But not just open source but being open in general and, in what seems amazing, given Google seemed initially to be focused on fighting “evil” Microsoft, now Microsoft seems to be fighting a far eviler Google. (I continue to believe that somewhere in Google there is a historic list of every mistake Microsoft made and some idiot executive at Google thinks it’s a to-do list.) In effect, Google and Microsoft have switched positions.

This most recent example is that in the face of Google’s security coverup and Facebook’s multiple disclosure problems, Microsoft is advocating for even more vendor transparency. This isn’t only the right thing to do but it founds why more and more firms are favoring Microsoft solutions like Azure over offerings from newer firms. In the end, buyers still value trust highly something Microsoft painfully learned, and their younger competitors seem to want to learn the hard way.

Why transparency is important

As noted, this goes to trust, clearly there was a time when firms could realistically cover up problems and feel that the risks associated with the coverup never really exceeded the benefits. With the advent of social media, the Internet, U.S. and EU penalties in the billions, and properties like Wikileaks that has significantly changed. Now, particularly when it comes to a data breach, the chance that the penalty will exceed the combined assets of the firm have increased dramatically and a far better, safer path is to focus on assuring security, responding timely to a threat with full disclosure, and working with the various governments rather than pretending the problem never happened.

What is particularly fascinating about Google, who largely came to market as the anti-Microsoft and once had a “do no evil” tag line (which they later eliminated) is how badly that company is doing with transparency. Their CEO even seemed to be attempting to hide from a congressional investigation and there are increasing calls to break up the firm, similar to what Microsoft experienced while Google was being formed in the early 2000s.

But covering up a data breach helps the attacker because it delays a government response making it less likely the attacker will be brought to justice. This in turn promotes illegal hacking as a safe way to get illegal financial benefit increasingly the likelihood of another successful attack and opens the firm up to excessive penalties and fines once the breach is discovered. The hacked firm will generally be caught anyway thanks to the ease in which a whistleblower can now get to media or because attacker wants to brag about their success. So, a focus on prevention and disclosure is now clearly the better and safer path.

Right vs. right

One of my longest standing arguments with old Microsoft was on mixing up “right.” A powerful firm has the right to do many crazy things but should never lose track of what is right. Or, just because a firm has the power to do something doesn’t mean they should do it. This really comes down to ethics and one of the biggest changes I’ve seen in Satya Nadella’s Microsoft is a focus away from what Microsoft has the power to do, and a focus towards doing the right thing for the customer and market. Microsoft finally gets the importance of the difference between the abuse of power, doing what the firm has the right to do, and doing what is right. This is a huge change in the firm and one I think other firms should aggressively emulate for their own well-being and survival.

Wrapping up

If there was ever a time to focus on doing the right thing it is now. In many governments it would seem this distinction between abusing power and doing what is right seems lost. In our industry there are firms that clearly have struggled with this concept and often got it wrong including Microsoft. However, under Satya Nadella there has been a significant and largely successful effort to change Microsoft into a company that leads with ethical behavior, and it is paying impressive dividends to the firm.

It is comforting to see in today’s fake news environment a firm shift towards ethical behavior, and to be financially rewarded for it. I believe that it is examples like this that will make tech a better industry to work in and the world a better place to live in. And this is yet another example of a firm doing well by doing good.

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