During his first visit to Australia in three years, Microsoft CEO Satya Nadella today asked local customers and partners to focus on creating their own intellectual property, arguing the underlying technology can largely be handled by Microsoft and should be viewed as a commodity.

But in doing so the IP must be created with trust and privacy in mind, the latter increasingly being “regulated to become a Human Right,” Nadella said. 

Organisations will also have to overcome a chronic lack of digital skills in Australia, a point highlighted by local Microsoft managing director Steven Worrall.

Nadella told a full house at Innovate, Microsoft’s customer and partner event in Sydney today, the Azure cloud platform had become “the world’s computer” on which to build their “tech intensity”.

Tech intensity, according to Nadella, is how well an organisation can bring technology into their business, essentially treating it as a commodity, and use it to build IP.

“It doesn’t matter whether you’re in healthcare, whether you’re in financial services, whether you’re in public sector,” Nadella said.

“You want to really ask the question as to what is that digital IP you’re building on top of this commodity input that you were able to bring in”.

Microsoft CEO Satya Nadella in Sydney today. Supplied.

Nadella then framed a rundown of his company’s platform offerings around an organisation’s need to build their own digital capabilities on top in times of increasing disruption. 

He also warned Microsoft customers and partners of the growing focus on privacy by consumers and regulators, saying technology trust, which encompasses privacy, security and ethics, should be “first class” in any IP development.

“We have to think about privacy,” Nadella said, “Privacy clearly now is being regulated to become a Human Right. We all have to think about that as a first class consideration while we build our applications.”

Skills challenge

Building competitive digital IP will be made all the more challenging by Australia’s ongoing digital skills shortage, according to Microsoft Australia managing director, Steven Worrall.

Before introducing Nadella, Worrall highlighted how Australia had not returned to the top ten economies in the IMD World Competitiveness Rankings since 2011.

More troubling, Worrall says, is Australia’s digital skills ranking, now 44th of the 63 nations considered, and the current makeup of the Australian workforce.

“It’s a skills gap that we see in our business here in Australia,” Worrall told Microsoft customers and partners. “It’s a skills gap that I know you see, because I talk with many of the organisations represented in this room about this topic regularly.”

Worrall said it is imperative organisations focus on their people first and technology second to help alleviate the skills gap and spur transformation.

“We’ve learned this lesson,” Worrall said of Microsoft’s own transformation under Nadella, “That the reinvigoration and the uniting of the different parts of our organisation over the last five years have been more about culture and more about people and more about organisational alignment than they had necessarily been about the changes going on in the technology industry, as important as they are.”

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