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Goldman Sachs Technology and Internet Conference
Event: Goldman Sachs TMT Conference
Date: February 10, 2021
Kash Rangan: Hello, everybody. Good afternoon. This is Kash Rangan on the Goldman Sachs technology team, here. Real delight to be able to host Microsoft and a very special speaker from Microsoft, Corey Sanders.
I was going through his background. First of all, Corey, welcome to Goldman Sachs Technology Conference.
Corey Sanders: Thank you for having me.
Kash Rangan: Absolutely. What a pleasure. And I know -- you're a computer science undergrad and you are a Microsoft lifer. And explain to us, if you don't mind, how you started out being an intern, if you will, and then all the way up to running worldwide commercial sales, which is the single most interesting business at Microsoft. Every business is interesting, but this is the one that is front and center. It's the biggest business, the fastest-growing business, it's the center of attention. How did progression. Congratulations.
Corey Sanders: Thank you. Thank you. Yeah, no, it's been -- I mean, it's been a wild journey. Interns at Microsoft originally, truth be told, they're the only one that offered me a job so I guess I got lucky there. But I started as an intern, as a developer, like you mentioned. I was actually fixing bugs in Windows back in the Vista days. So that was kind of my first -- my first gig.
You know, over time I felt like I wanted to do more with sort of building product and engaging with customers, and so I moved to working on product in Azure. And it was -- it was in '09 so the product had just been named Azure, just to sort of level-set where it was. And so I think I was like the fifth PM on the project, and helped build out some of the original compute services, did that for about a decade, about nine years.
And then, you know, I realized that I really loved working with customers on their problems, and so as much as I enjoyed building the solutions at Microsoft, I actually really enjoyed helping customers build their solutions using our capabilities. And so it moved me into this role, which is you know, as you mentioned, sort of responsible globally for I like to call it, customer enablement, sort of across all of our commercial solution areas. So that includes Azure, so that includes data and AI. But it also includes modern work Teams, Office, sort of all of the productivity capabilities, collaboration capabilities, and then also Dynamics and Power Platforms.
So it's been a wild ride, and like you said, a lifer at Microsoft. But love to be a part of every -- every year of change for us, which has been really pretty something -- something to behold, certainly, from the inside.
Kash Rangan: Absolutely. It's really remarkable that you're the worldwide commercial sales organization and you have important responsibilities. I guess, having been a former engineer, still -- I suppose you're still an engineer -- you'd see tremendous credibility when you speak with customers. So what's on customers' minds these days? Does the availability of a vaccine change anything to do with customer priorities, or maybe it doesn't? What are your thoughts there?
Corey Sanders: Yeah. You know, what's been, obviously the pandemic has been such a terrible impact for our society. And it's really changed the approach that many customers have taken towards digital transformation. I know that Satya oftentimes calls this sort of the dawn of the second wave of digital transformation, and there's really -- it's really true when you sit with customers. They are accelerating in ways that perhaps they had talked about or always thought about planning to do at some point. But they're really putting energy behind it, in some cases because they have to. In some cases they're -- you know, they're moving to a digital workforce, a remote workforce, being able to depend upon collaboration around the world and leverage that for their services and solutions, whether it be working their manufacturing plants in a remote way or engaging with their customers in a remote way.
Depending upon e-commerce, when perhaps 90% of their business used to be in-person sales. These are some of the changes that we're seeing, and it's really shifting the way companies spend money. It's shifting the way they focus and prioritize these types of projects, in that they're more and more seeing that if they don't take these digital transformation steps forward and invest in these areas, they're going to struggle to continue to remain relevant in this sort of shifting market.
Kash Rangan: Corey, if you could just put a final point on it, what kinds of projects are getting prioritized versus -- is the IT budget, is it sort of a finite thing? We make room for something, you've got to eliminate room for something else. What is going up, what is coming down, given your raw perspective running commercial sales?
Corey Sanders: Yeah. I think the focus on leveraging data for insights and doing this in sort of a remote environment feels like it's sort of a broad brush, a really big shift for companies. You know, many, many companies deal with silos of data. They deal with each individual business unit having sort of their own data, their own analytics, their own sort of assessments. And you know, as these companies have both needed to figure out what is going to be their next revenue stream, what is going to be the areas that they have to pull back from, how are they going to reprioritize, the focus on consolidating data, on thinking about analytics fully end-to-end to drive outcomes, that's been a really big area of focus. I think that that's been something that we've seen just a whole lot of attention brought to.
And then I think sort of layering on that, sort of how to take that data to drive sort of digital-first remote experiences. So taking sort of that data and being able to improve the way people engage in a day-to-day environment, improve sort of the way in which again, sort of an auto manufacturer runs their assembly line, listening to the devices on the assembly line and then being able to support remotely, service of that assembly line in a digital way
So these are -- these are the places that are getting the investment and getting a lot of attention as people look to this shift, and almost all those being sort of cloud services that they're depending upon.
Kash Rangan: Got it. So I suppose it's positive for analytics, business intelligence, Power BI, those kinds of products, right?
Corey Sanders: Yeah, definitely. Sorry. And I -- I could definitely -- I was talking broad strokes, but let me talk specific to Microsoft.
So yeah, I mean, the types of products that that really supports. Certainly, teams and collaboration being a really big major one, right. Obviously, everyone sort of shifting to those collaboration experiences. Analytics, like you said, being able to take analytics. But then also, our AI services built into things like Dynamics, right, taking advantage of customer insights and being able to draw conclusions based on the business outcomes that they're looking for, again, pulling from those single-data sources. Those are the big areas for sure.
And then I would probably maybe add one more, which is security. This is something that's seen such a huge level of investment, and I think, that perhaps one of the saddest parts of the pandemic outside of the pandemic itself, is that it's become an opportunity for bad folks to take advantage of many customers and many challenging situations that folks have. The investment in security is going up, and it needs to. And I think the opportunity to secure environments from endpoint to infrastructure and sort of bring all those components together. That's been a really big investment area over this last year.
Kash Rangan: Got it. When you look at the pipeline of commercial business, whether you want to characterize it on a year-over-year basis or sequentially, maybe more useful to look at it sequentially because the economy is hopefully improving sequentially, fairly rapidly at least according to Goldman Sachs economics team. We're calling for US GDP to accelerate to about 10% or so in Q2. That's one of the highest forecasts out there.
So as you look at your pipeline today, how does it look relative to say three months' time, or six months' time, or nine months' time?
Corey Sanders: Yeah. You know, it really depends on the customer and the industry, right. Like I think it's obviously the breadth of customers that we support are pretty wide and pretty differentiated. I think for some of the industries that are starting to see some of the rebound as sort of you just outlined, sort of seeing the V-shape in their business, we are seeing sort of that, combined with sort of the point I just made about this increased focus on digital transformation is pushing a lot of energy and excitement into customers approaching their business in a different way, willing to take the investment and build their dependency on sort of these cloud-based solutions, these digital solutions.
And so you know, I think across the full breadth of Microsoft's products, it's pretty exciting. I think that the opportunity to go out and help customers deliver on that promise, and so I will say, though, it does really depend on the industry. There are still industries hurting and still industries that are trying to figure out their next step. But for the ones that are feeling that, that sort of rebound that you outlined, I think they're definitely showing up with a lot of passion to go make these digital changes quickly.
Kash Rangan: All right. If you could, Corey, just look at an average customer or the profile of an average customer. When they are doing digital transformation with Microsoft, you've got a $67 billion, $68 billion run rate business growing 34%. What are the products that picking and choosing from the Microsoft family under the banner of digital transformation? And what is the outlook for those kinds of products going forward?
Corey Sanders: Yeah. You know, a few that sort of I already talked about, but I think that the -- maybe to sort of re-emphasize and go even a little bit deeper. You know, I think data being a core component of digital transformation and then the AI output of that into all of our other services. And so you know, when I think of sort of the key services, you know, I think Synapse, our data warehouse, our analytics solutions around that. We are just seeing a huge amount of excitement and attention there, with sort of data ingest coming from lots of sources, right. Again, sort of the data silos trying to break those down, bring them together, and drive your insights and outcomes.
So that's an area that I think I've got a lot of passion about. And then I think that feeds all of the other businesses. So if you think about the shift in depending upon digital data, digital leads as I like to call it, for driving your sales business, suddenly Dynamics becomes a really interesting conversation. Sort of categorizing your customers using AI, being able to engage with your customers using collaborative technologies while also understanding the right next best action using the data ingest that you just pulled together.
So you know, I think our Dynamics capabilities, driving business outcomes, and I mentioned retail. You could expand that to supply chain. You could expand that to commerce. You could expand that of all of the Dynamic suites. We're really seeing some energy and passion there.
And then maybe as a separate category, is sort of the change in the way we work. You know, I do think that this push, even in a rebound state, even a state where the vaccine becomes prevalent and people start working in-person. The desire to engage in a much more collaborative way than ever before possible with Teams, and sort of the extension points of Teams. So you know, not just a meeting with a camera, right, but sort of a meeting with a camera, with chat, with the apps that you use, with sort of the understanding of your work-life balance, with the recommendations around sort of the right tools that you should be using to improve your experience. Chat box to help automate processes.
I think all of that is really coming together as a great opportunity for what customers are looking for.
Kash Rangan: Got it. And then to the piece of the business that everybody wants to talk about, Azure. How did the name Azure come up? I'm just kidding, that's not the question. But --
Corey Sanders: It's the color of the -- the color of the sky, I think, was actually the original ide-
Kash Rangan: Cloud computing.
Corey Sanders: Yeah. Exactly.
Kash Rangan: Yeah. And it took a while for people to really start to, oh, you know what, this is real. This is actually real. We had, I don't know if you remember Bob Moglia, he presented with us in 2009. He talked about Azure for the first time. We were like, what is he talking about? Well, 11 years later, you know.
Corey Sanders: I just joined his team in 2009 so yeah, I knew Bob.
Kash Rangan: You did? No way.
Corey Sanders: Yeah. I knew Bob very well.
Kash Rangan: Wow.
Corey Sanders: And so yeah, yeah. Exactly.
Kash Rangan: Amazing. I'll pick your brain on Snowflake, because he used to be a Snowflake, later. But I do want to ask you about Azure.
Azure looks like it's -- the turn in the business, in this quarter, which was a very pivotal quarter, it's such a big business. To ask what is driving the reacceleration. Probably answer 90% of it, but if I wanted to just get a little specific, what is causing that reacceleration in Azure? And how sustainable is this terrific growth rate that you guys have got?
Corey Sanders: Yeah. Look, I -- yeah. So we're really excited. I mean, I'm really excited, obviously having started in Azure in my early years. Look, a big part of this is sort of the overall industry growth that you mentioned, right. I mean, I think this -- if you sort of look at the history of sort of the Azure usage, and customer's approach to Azure, there was a period where mostly customers were focusing on optimizing, right. They were focusing on reducing their spend. But which creates an opportunity for reacceleration as sort of the business starts to rebound and sort of as you mentioned, that sort of industrial trend has started to really turn around, which has been -- which is exciting I think for all of us, for sure.
I would also say specific to Azure and Microsoft, some of the things I even already talked about. There is an increased usage of some of the premium services and some of the sort of new, new services and solutions being built as customers focus on digital transformation versus sort of the classic lift-and-shift for sort of agile infrastructure, which I love, right. I designed it originally, so I love the service. But when you sort of get down to true digital value for customers, and then -- and sort of that digital transformation momentum. It's these premium services. It's new application development. It's Synapse. It's being able to take advantage of data breaks. It's these types of capabilities that we're seeing, some real momentum around, and it's helping fuel it.
You know, for your point about sort of longevity, look. We're -- I'm pretty excited about the growth that we're seeing. But I'd always couch it with, as you mentioned, it's a big business and so there's always -- you've always got to kind of remember that it's a big business. And so that will sort of temper out.
Kash Rangan: The amazing thing is that as big of a business as it is, every time we speak with Microsoft we get the sense that more and more of that growth is done by new workloads. Works, you know, we've all been trained to think that it's a migration, it's a transition. You take that all -- and to your point, lift and shift, right. How much of that is still around? Because Microsoft has been in the server business for 25 years. You've got a massive, massive install base. You've got big market share, right. Does that ever start moving to the cloud at some point?
Corey Sanders: Yeah. I -- so we're -- look, I think we're definitely seeing both, right. I mean, I think that we see significant migration of existing workloads. The Widows/Linux/SQL, right, like it's not just the Microsoft core components. But it's a lot of exciting open source development or migration, I should say, as well.
So that's definitely a big component of it. Like I said, new workloads for sure are driving a lot of the incremental growth.
You know, when we think about just this tradeoff, hybrid actually is a big selling point and a big value-add for customers, right. And that hybrid story is sort of enabling customers to think about digital transformation not as a cloud-only answer, right. When you think of some of our capabilities, like Azure Arc which creates sort of a unified experience between on-prem and cloud, enabling you to run things like Kubernetes or sort of managed data services in both places, it allows customers to make that digital transformation step without the boundary of whether you're going to be in public cloud or not. And so the result of that is, they will still buy more on-prem in addition growing in the cloud.
And so it's -- which I think is a great outcome for customers, right. They really sort of -- they don't sort of have this boundary condition. They don't have this sort of limitation. They can take their digital transformation in the way that they want to. And I think it's a unique set of offerings that we have that can enable customers to do that.
And this is why we see growth in both, right. It's something that I think we get questions a lot, of hey, how is your cloud growing and your server and this is a big component, right.
Kash Rangan: Yeah.
Corey Sanders: It's that customers are growing both and sort of the hybrid picture is enabling them to do that seamlessly.
Kash Rangan: Got it. At one point in time, the two tracks were going sort of parallel with cloud development and the on-prem. Then you had this thing called Azure Stack, which I still remember when I heard about Azure Stack, I said, this is brilliant because you can bridge the old world with the new world, upgrade to Azure Stack. And what you're saying is actually even more positive for the cloud business, because if you still have seen an amount of on-prem business, those workloads are going to be loyal to Microsoft for a lot longer period of time. So when they do make that decision to go to the cloud, it's you that is going to benefit, right.
Corey Sanders: Yeah, exactly. I mean, I think that Azure Stack sort of bringing -- was the first component of this overall picture of hybrid. But yet to your point, it really is about offering choice. It really is about saying that look, you don't have to -- when you're picking sort of SQL, I'll use sort of my best example -- you don't have to make a tough decision over paths in the cloud or manage your VMs on-prem. We're giving you this choice to be able to use SQL however you want to use it, wherever you want to use it. And we think that's a value-add to your point that's going to keep them using SQL. We think that they'll see the value in sort of that renewal conversation and will continue to expand even usage of SQL as they -- as they continue to grow, right. It's just one example of that type of product. Yeah.
Kash Rangan: It just occurred to me that you have a viewpoint on databases in the cloud which alone, that alone could be a 30-minute conversation, it's so fascinating.
Corey Sanders: Oh, I love databases in the cloud. Yeah, totally. We should -- we could take that offline.
Kash Rangan: Maybe we should talk about it, right. I'm not planning on asking you, but I'm fascinated that that segment of the market, you still have some big companies there. But you guys have really turned that business around, whether it is the cloud or not, in a significant way. And you've seen the benefits of that in market share or what not. What is your prognostication? Granted that you're a computer science undergrad from Princeton, you have the credentials, the street cred to be able to have a viewpoint on this. How do you see databases in the cloud and how is Microsoft positioned for that future business?
Corey Sanders: Absolutely. Yeah. This is -- you're walking into one of my most favorite maybe topics, and I actually think differentiators that we do have with Azure, which is our Synapse Link product. You know, one of the things that if you go into the depths of database challenges that customers have, they split their data up into operational data. So the things that are supporting a website, right. And then analytics data, right, the things that are running overnight, and they're deciding, hey, which product should we put first on our page, or second, or whatever. That's a retail example, but it goes everywhere.
And one of the biggest costs that customers have is trying to bring that operational data into that analytics data and then do your calculations and run it. And like many customers over years, they basically do every night, they run this big ETL process. It costs a whole lot of money, etc., etc., etc. And this is where, when you think of some of the future of databases and the opportunity to be able to have but one global scale databases, so you're no longer having to spin this up in one place. You can click a button and you've got it in seven places worldwide, to support your website. But Synapse Link, which is something that we recently announced, allows you to in database terms, effectively join your operational data into your analytics data.
So you effectively can run your analytics query, you can determine your sort of what's the right product to show on your page, without moving data anywhere, without duplicating data. It basically just pulls from the operation out. This is only possible with this type of cloud innovation, where we know the database is going to be built and deployed in this way, and we know the analytics service is going to be deployed in this way. And so we can make this connection behind the scenes that saves customers time, money, and energy.
To me, sort of the point that I mentioned, even at the very beginning, this is one of the biggest silos of data that exists in the world. And this is such a unique solution.
So I got into a little bit of the bits and bytes there, but you know, I think for me, I think the direction of databases generally in the cloud is going to be to break down these barriers. You're going to have very little to manage. You're going to have very little extra processing that needs to be done. You're going to consider your data all one entity and you're just going to pick and choose the value you want to get. You want an operational store here, great, click and you go. You want to run your query over here? Click and you go. And there's very little work to make them all work together.
So anyway, you got to a really exciting point for me. I'm sorry, I went too long.
Kash Rangan: That's great. No, we've started pondering and writing what databases in the cloud about a decade back or so. It's good to see the segment. What options do you have for competitive market share gains, displacement of legacy databases? Is that something Microsoft is giving attention to? Because that's a big, big market out there.
Corey Sanders: Yeah. I mean, I think one of the big things we focus on is choice when running. And I think when you look at some of the sort of modern capabilities, sort of the global scale, I look at something like Cosmos DB, it's all built around open source database solutions. So with Cosmos DB you basically click a button and you have a fully-managed, global database built on a whole bunch of open source models that you can go use. It allows you to more easily move from perhaps if you feel sort of a legacy database, or sort of feel the weight of that legacy database, you're able to make these migrations to a cloud-based solution more aggressively.
I think we're going to see a lot of customers do that as they move through digital transformation, as they decide they need a global scale solution and it's hard to manage their existing ones. I think we'll continue to see some of those legacy databases just move as infrastructure, and I think again making sure that we're there to support customers on both is going to be key.
Kash Rangan: On the earnings call last month, the company talked about $10 million-type transactions for Azure, Microsoft 365. When you speak with customers, how are they thinking about Microsoft being positioned in their cloud roadmaps and how strategic is Azure becoming to their roadmap to the cloud, if you will?
Corey Sanders: Yeah. I mean, again, it's sort of a -- it depends on the customer is probably the best answer. I mean, I think that for customers where they are looking for a partnership with us, they look fully left-to-right across our entire portfolio, right. So Azure is of course a key component to it, the Azure infrastructure. Sort of the data platform that I've maybe talked ad nauseum about at this point. These are key components to their strategy as they look at modernizing.
But the most strategic partnerships that we end up building, which then bring the resources that we have to bear to go support, build, and design these types of transformations, extend beyond just that, right. They will include Teams modernization. They'll include applications built in Azure and exposed in Teams, as an example. And they'll frequently include Dynamics, and sort of a business outcome-based transformation as well. So it's -- look. It's a key component because I think it brings a lot of these pieces together, but the most strategic partnerships that we have are typically inclusive of more than just Azure, is maybe the best way to put it.
Kash Rangan: Got it. Got it. How competitive is the market? I mean, I know you've got three big companies, two in addition to Microsoft. Is it really the pie becoming larger, or Microsoft getting more share of the pie? How do you think about this competitive dynamic?
Corey Sanders: Yeah. I mean, I think without necessarily quoting sort of share numbers, you know, look, I do think this movement for digital transformation is pushing many more customers to plan usage and migration to cloud, right. So I do think we are seeing the overall opportunity to continue to grow, which is great, right. I think -- and I think it's great for customers, too.
You know, I am bullish on what I think we're able to do for customers. I'm bullish compared to our competitors. And again, it's sort of -- I don't want to continue to repeat the same point, but I do think it's actually tied very heavily into the fact that it's more than just Azure, right. I think that the -- you know, I feel good head-to-head when it comes to our data platform and our infrastructure platform, obviously. But the places where we really, really compete well is when we're able to paint a picture of their full IT landscape and how Microsoft with Azure can change their end-to-end. And so I think that's where we are really differentiated, and I find our competitors really struggle to land sort of a similar picture because it's much more piece meal.
And so the key components there, obviously, sort of the -- as I mentioned, the data into sort of the business outcomes, the collaboration, and then security is actually a really big one there where we see sort of the security of Azure combined with the security of the modern work experiences, creates a lot of differentiation, distinct value with sort of AAD across the full picture that our competitors struggle to paint a similar picture.
Kash Rangan: Right. In the few minutes that we've got left, I just want to get your thoughts on Office 365. What inning are we in the transition from old Office to Office 365 prem? Or maybe the market opportunity has gone bigger. We should not be thinking about the transition of the old version, but how would you level set us on that aspect?
Corey Sanders: Yeah. I think there's probably a couple key points. The first one would be you know, I think it's sort of -- Office 365, Microsoft 365, it's really transformed into a collaboration experience, right. And I think that Teams has done really an awesome job of putting these components together, right. There's -- it's no longer a discussion of Word and Excel and PowerPoint. It's a discussion of collaborating in Teams and how all these components come together to enable that experience. And you know, it's not just a sort of a licensing bundle, right. It is actually a customer experience end-to-end.
And one of the best examples I think of this, is we recently announced Viva this last week, which is really sort of taking these components and bringing them all together. So it's some of the things that came out of Viva directly in Teams, you're able to sort of understand corporate requirements. You're able to understand sort of community changes that are happening in your corporation. You're able to understand your work/life balance using an analytics platform to see what you're doing in email, what you're doing in Word, what you're doing on Teams, and how you're spending your time and when you should be taking breaks, and so on and so forth.
So that type of analytics built in, these are things that customers are just going to start expecting as they look at their collaboration productivity software. It's all one thing which is productivity, efficiency, and collaborations, in one. And this is where, you know, I think that when I look at the future of Microsoft 365, it's really tied into that Teams experience and all the experiences that surround it. And so I'm pretty bullish on it. I think it's -- I think that part of the transformation is an early inning. I think there's a lot of room for us to continue to innovate, and it's also an area I feel pretty good about our differentiation and sort of having a full platform spectrum.
Kash Rangan: There's really only one other company that does this, the collaboration aspect, not the video conferencing, Slack which was bought by Salesforce.com. Any thoughts on how we should be looking at Microsoft's differentiation with Teams vis-à-vis a Slack or maybe a Zoom or Ring Central? Any thoughts there?
Corey Sanders: Yeah. Yeah. I mean, you know, I think it's the -- it's the breadth of sort of connection points, right. You know, when you look at Teams, it is -- it is certainly an integration point with Dynamics. If you look at something like our healthcare cloud, Microsoft Healthcare Cloud, the ability to bring customer-patient experience with a collaboration experience, with a chat experience, right. So there's absolutely opportunity with our business apps. But it goes much beyond that, right.
When you think of the integration back with our analytics platform, integration with something like a chat bot or power apps, right, these are some unique integration points that there's sort of no single competitor today that has that full breadth of offering from a productivity suite, an email suite, and all the way through to the business apps and the analytics underneath.
And then maybe the kind of final point there, that I think is again unique, is the security expectations across that full end-to-end. We have a real depth in our security product and our security capabilities that allow you to do that, from Teams, to Dynamics, to Azure Analytics, with a single security view that customers again are expecting. It's sort of an assumed part of this new world where everything's remote, everything's collaborative, but everything needs to be secure. And this is -- this is where I think we stand alone.
Kash Rangan: So I know the market likes to look at, or at least financial markets like to look at the subscriber growth rate, installed base growth, etc., of Office 365. How much more room is there for adding more subs in the next few years or many years?
Corey Sanders: Yeah. You know, I think -- so there's probably two areas to talk about there. I think there's one which is sort of coverage, right. I think that there is you know, the classic office coverage model, was information, right. And as you sort of look at this again, this collaborative app productivity, chat bot experience, I think there's a much broader conversation around front-line workers that really is able to add value, right. Unique value in that front-line worker segment.
And then I would also say premium services, right, the sort of ongoing value of increasing services like Viva, like some of the security services. Compliance has been one that we've seen pick up that I think continue to add value to the overall suite, and give opportunity for sort of upsell momentum as well.
So you know, I do think, obviously there's seats on the plan sort of perspective. But I do think that there is opportunity both in more coverage, but then also in sort of premium value to be had.
Kash Rangan: As you mentioned front-line workers, I could not help but think that the pandemic has been unusually harsh on the front line worker, right. If we get to a vaccine, these front-line workers come back, it's got to be positive for your business. Because you've been talking about the F1 skew and what not for quite some time.
Don't you think that the return of the front line worker is -- is a good, incremental positive for Microsoft?
Corey Sanders: Yeah, definitely. I mean, look. I would think the front line worker getting -- being able to get back to work is good for the economy in general. Like it's -- just -- I think it's certainly lifts all boats. So I think it's a great thing and, obviously. Everyone getting the vaccine and the pandemic going away is I think really, really key.
You know, one of the things that as we look at sort of front-line workers, you know, one of the things that we've seen, sort of the opportunity to pick up, is that those industry-focused solutions, right. The healthcare solution that I mentioned, sort of being able to enable retail-based front-line workers to be able to have a single experience between e-commerce and their storefront. So I do think there's a lot of opportunity there that even goes broader than just Teams in sort of enabling front-line worker experiences. So yes, I think it'll end up being a good thing for all of us.
Kash Rangan: Got it. Curious to get your thoughts how customers are thinking about their collaboration communication strategy going forward, especially with vaccines being distributed. Are we going to collaborate less because hopefully we'll come out of the pandemic, or how does that behavior change or not change?
Corey Sanders: Yeah. You know, I -- we -- we've started adopting a phrase in my team of sort of digital-first. And what that means to us, is even -- even in-person engagements, in-person conversations with customers, we still want to be very digitally-led. And so you know, when I think of -- frankly, I look at some of the things that Viva just launched. Even when we get back together, I can barely wait for sort of in-person meetings, and sort of in-person engagements. Still being able to take advantage of some of the progression we've made, and sort of leading with digital, leading with AI, sort of being able to understand how we spend our time, understand who we spend our time with, and leveraging AI services to guide -- to guide our meetings and to guide our productivity, I don't think that goes away. You know, in fact I think we -- we actually double down on it, right.
So you know, I think in person will be fantastic, frankly, again, for just the -- the overall mental psyche of the -- of the world. Because I think we all miss the sort of the in-person engagement opportunity. But I don't think it reduces the opportunity of being digitally-led and how we engage and how we sell and how we work in factories. You know, being able to support a remote factory without jumping on a plane is always good, you know. Whether we can't jump on a plane or we can jump on a plane, we'd probably prefer not if we could do it remotely. It saves money, it saves time, it saves time away from family.
So you know, I think there's opportunity for digitally-led across the board.
Kash Rangan: Got it. Got it. On the earnings call, Microsoft talked about a percentage point benefit from COVID-related savings to your bottom line. Do you -- when you talk to customers, are they experiencing such savings? And what are they planning to do with these savings, if you have a view of that?
Corey Sanders: Sorry, savings from --
Kash Rangan: Microsoft talked about COVID-related savings for the company, company's bottom line, right. So when you talk to customers, do they experience such savings as well as, such as T&E.
Corey Sanders: Got it. Got it. Got it. Okay, great. Yes. No, I mean, look. When I talk with customers I think it's always a balancing act and it always sort of depends, again, upon the industry, right. Because I think there's certainly savings from things like operating expenses, travel expenses, etc. But I think the bigger conversation is typically sort of how IT spend is shifting, right. I think sort of -- and I do think that's a really interesting opportunity, sort of IT spend shifting from sort of managing site locations, etc., to managing remote capabilities and remote security, and sort of remote communications.
So you know, I do think you know, it's hard for me to say savings or not because every company is different in how they approach it. But shifting in the -- in how they're spending their money is absolutely happening. And sort of shifting and how they think about what to prioritize. And it again comes back to even my first answer around the digital transformation, right. That shift in actually re-pivoting money towards taking those steps towards digital transformation is definitely happening.
Now, whether it's a net negative because their travel expenses were enough to offset, or what-have-you, right, you know. Each company to their own. But I think that's definitely a key component.
Kash Rangan: Well, on that exciting note, I would just -- I just wanted to say a big thank you for this high octane, high energy, high enthusiasm presentation. Really, really enjoyed it, and awesome to discover that you actually worked with Bob Moglia back in 2009 and you had a big role in shaping up Azure. And one again, thank you for taking the time to be with us. Really appreciate your commitment to Goldman Sachs.
Corey Sanders: Thank you, Kash. Really appreciate the time, yeah. It was fun talking with you, and we should talk more about databases. I feel like we -- I feel like there's a lot more to dig in there.
Kash Rangan: I love databases. I love databases.
While we're finishing up I just wanted to share with you, you heard the term PaaS and IaaS, right? First we had SaaS. So my contribution, if there's anything that I've done for the industry, is to come up with PaaS and IaaS, a true story.
Corey Sanders: Is that right? Oh, my goodness.
Kash Rangan: In 2006, 2007, we -- like hey, you know, what do you call this thing? The cloud, oh, divided it up into -- Gartner already has this thing called SaaS. What about PaaS.
Corey Sanders: So I have you to blame for this? Okay. I know.
Kash Rangan: Oh, I know. Very sorry about that.
Corey Sanders: Having to explain to a customer the difference between those two, that was my early days in Azure.
Kash Rangan: There you go.
Corey Sanders: Absolutely.
Kash Rangan: Have a lovely day. Thanks so much, Corey.
Corey Sanders: Thanks. You too.
Kash Rangan: Bye bye.
Corey Sanders: Bye bye.
Kash Rangan: Take care.
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