Can Microsoft’s $9.5bn annual, global R&D budget help the UK economy by providing IT solutions with the best customer feedback in the world? It’s Mike Silva’s job to try to make that happen. Interview with Will Stirling.
Mike Silva landed at Heathrow Airport in February with a huge job to do. As a United States lifer, Microsoft UK’s new boss of Manufacturing and Utilities was new to the country and British business culture. The UK was in a double-dip recession, many companies were still reluctant to invest heavily in new business systems and the business IT market was intensely competitive, with the cloud helping to ‘democritise’ big, expensive enterprise resource planning (ERP) solutions for many users.
Unfazed, he is fronting up with characteristic American ‘can do’.
Mr Silva had been through a big reappraisal of the core approach to business when he joined Microsoft six years ago. “I joined at a fascinating time,” says the ebullient Silva. “Microsoft was saying ‘We think we listen to our customers, but we could do a much better job.’ Others, including my previous company, were also going through that. We started to scrutinise customer issues and macro trends more closely.”
Mike Silva is responsible for the largest of the three Microsoft industry sectors in the UK – financial services, retail and consumer goods and manufacturing and utilities – and is overseeing Microsoft UK’s nascent involvement with some new partnerships, including the Manufacturing Technology Centre in Coventry.
“I’ve met several global CIOs in the UK, and there seems to be a fairly unique approach,” he says. “They see themselves as business people who happen to run IT organisations. That’s a refreshing perspective and a self-fulfilling one. I’m mainly about business, I can get myself in trouble with technology. But it’s a huge asset to have the two.”
The next step is to find out more about the infrastructure of British industry and the key relationships between some of the prime stakeholders.
“There are three core principles to my job: stewardship, assessing the macro perspective and feeding the R&D engine,” says Mr Silva, who joined Microsoft from Ingenix, a division of United Healthcare.
Stewardship is a strong pillar of the whole Microsoft enterprise thanks to the philosophies of its founding father, Bill Gates. Taking this principle forward Mr Silva is reviewing appropriate opportunities where the company can help projects and foster better community engagement.
The second and third principles go hand-in hand.
Microsoft Corporation, with revenues of nearly $70bn a year, has an annual R&D budget of $9.5bn. Think about that for a minute. Microsoft’s R&D spend is bigger than the market capitalisation of 42 companies in the FTSE-100. R&D on this scale needs great market intelligence to be effective.
Silva has to collate the intelligence which the companies in his sectors feedback to Microsoft. For example, which aspects of MS Dynamics work well, should be faster and could be turned off.
“We’ll take global market trends and see how they apply to the UK.” says Silva. “We feed this perspective back to the product and services groups, and R&D teams. This helps to influence product design development, the Roadmaps i.e. where we are going, and to customise our software.”
“Some CIOs of large UK companies see themselves as business people who happen to run IT organisations. That’s a refreshing perspective.” – Mike Silva, Sector Director, Manufacturing, Utilities and Services
Mike Silva on: Microsoft Partnerships
Microsoft has tens of thousands of partners around the world; how do you make sure the customer benefits fully?
“We work hard to know absolutely where we begin and end. If we walk in to a meeting and the partner is just walking out, that’s a miss for the customer. So we have purposeful strategy with our ISV and SI community – joint knowledge sharing between ourselves and technical partners like Siemens or Rockwell, for example.”
Microsoft recently embarked on a strategic partnership with the Manufacturing Technology Centre in Ansty Park, Coventry. More details will follow on themanufacturer.com.
Do CIOs sit on the board in UK companies?
“There is one global logistics company and several big defence contractors who I know are IT-led businesses, who see IT as a board function versus an operational cost.
[In some companies] there is a culture that understands that IT enablement is different to IT cost structure. It’s Gartner’s maturity model. The US is different to the UK but I can’t yet assess the situation here.”
“This is not sequential anymore, its parallel – your IT and your business architecture have to be aligned, one has to help the other to innovate and chase new ideas. We help customers access new markets, for example using the cloud helps customers to innovate up, and to roll out change without the heavy cost component structures that some new market strategies demand.”
What’s in the Cloud?
“There has been a paradigm shift. I hosted a roundtable recently with a mix of vertical companies. Two thirds of that table took the approach of cloud first, that is: ‘we’ll put it in the cloud unless there is this small box of key reasons why we can’t’.
“While the UK is a little behind the US, how international the company is will define cloud adoption more. Cloud should improve global communication, but globalisation fractures some of this thinking – laws and regulations on IP rights and disclosure issues are complex from country to country. For a UK-only business it should be a little easier because the regulations are the same across all counties.
“Microsoft has helped the Boeing [the 737] and defence contractors test products in different parts of the world using cloud, linking parts of the world who communicated less frequently before. From a macro perspective, the economy and technology are pushing manufacturers faster on things like cloud and product lifecycle management.”
BIG Data – Business Intelligence
“The complication is that big data is both structured and unstructured. It’s important to understand what this means to extract value from BI. We also see manufacturing companies starting to take influence from customer- and social-influenced design. Real time or structured data reaches out to influence product development.
Today you’re dealing with so much data, from so many sources. How do you meta-tag it, how to make it meaningful? Humans can’t do this anymore, it’s too much.”
Working with MS Consumer; Workforce issues
“We’re fortunate. We’re in a unique position to maximise earnings from one uniquely dynamic world combining consumer and commercial. The millennials [demographic] are pushing us to do that too. They have a different demand in the work environment and their customers have different challenges to keep good employees.
“We’re learning a lot from the millennials, the Generation X-ers. Microsoft has recognised the need for a flexible workforce and is developing tools to enable more flexible work practices. Also we need to innovate and improve our own business to keep the best employees when competition for good people is fierce, especially in software development.”