Judson Althoff6:35
Well, thank you. Thank you.
Well, good morning. Good morning and welcome to the Microsoft AI Tour here in Helsinki. I'm thrilled to be here with each and every one of you today because it's my first time in Helsinki and there's not too many places in the world where I get to speak to our customers and partners where I can say it's a first for me. So, I'm very happy to be here. It was awesome this morning taking a brisk jog out by the waterfront and seeing the glory of the city and the sun rising so early which is nice compared to what we experience even in Seattle. So fantastic to be here with each and every one of you. I have a job to do here in front of you. I want to do three things for you this morning. One, I want to talk to you about a topic I call frontier transformation, which is all about demanding more from AI, making sure AI is contributing positively to society and unlocking growth. The second is we're going to show you all the latest capabilities that we have built into the Microsoft portfolio to help enable your success on that journey of becoming Frontier. And then third, enable you to hear from some of your peers and how they're navigating all of the transformation opportunities today, which is my favorite part of the show. So, but before I begin, one of the things I do before I go to each city, and we're doing 40 cities this year, will touch over 100,000 customers in venues large and small. One of the things I do before I come to each city is I use Copilot to run a bit of a prompt to help myself get indoctrinated into how things are going here locally. And so my prompt is hey I'm going to give a presentation tomorrow in Helsinki. Tell me how people in Finland are thinking about AI. You know what do they see in terms of opportunity? What are the concerns? And you can see the prompt here and some of the responses. And here in Helsinki, it's fascinating to see that, you know, while the majority of people are very excited about the opportunity around AI, there is a mix. There's a balance. 60% say, hey, we're very excited. We see opportunity. 40% cautiously optimistic, more concerned about how AI is going to impact society and making sure that the appropriate regulatory measures are in place to get the most out of AI whilst at the same time doing so in a trusted way and delivering on the positive promises. So if you look at the potential for impact, there's no question. It's not a question of if, it's a question of how. Making sure that you have the appropriate guardrails in place to get the best out of your AI capabilities whilst at the same time adhering to governance, manageability, cyber security, and frankly the ROI of AI for your business across all industries. So at Microsoft, we take this quite seriously. In fact, if you think about the first wave of AI solutions that have come out over the last 3 years, much of it was around productivity. In fact, I don't think our industry has done too much of the world a great favor by focusing on productivity and efficiency and leading to some of the concerns about the impact on jobs and career obsolescence when in fact if you actually push AI to do more for humanity you can unlock growth, creativity, democratize intelligence. You think about the gaps in society that have existed throughout time. Those who have had access to knowledge, the opportunity to learn, harness their potential, have outpaced those that have not had that access. So, putting AI to work for the world's best educator, the cure for the incurable, unlocking creativity and growth, the world's best film creator, the world's best musician is out there. And that potential can be unlocked through AI. So we have focused a lot of our attention over this last year on building a platform to enable this potential so that we can demand more from AI as a society. But like all businesses, you need a framework, a framework for success. And we've put forth this four-pillar framework at Microsoft. In fact we use it internally. I'm the proud owner of it inside of Microsoft so I use this framework for success to measure and think about the outcomes we can drive using AI. And again, it's been fascinating. The pace of adoption has been unlike any other wave of technology we have ever seen. Three years ago, everybody thought, wow, okay, we can kind of see this as being some cute parlor tricks. You know, maybe it can help us write our holiday cards, but I don't think anybody actually took it serious in the context of business. Then as time went on, fear, uncertainty, and doubt set in, and folks would come to Microsoft headquarters saying, hey, Judson, we think the AI robots are coming to kill us all. What can you do to help? And now today, people have a thousand big ideas of all of the things they think they can get done with AI. If they've paid an advisory firm $25 million, they have 4,000 big ideas of all of the things they think they can get done with AI. And about 98% of them aren't really very good ideas because they're grounded first in technology versus business outcomes. And we believe AI transformation, frontier transformation has to be grounded in business outcomes, empowered by technology and in that order. So this four-pillar framework helps us stay grounded. You have to ask yourself, is the AI solution in question going to enrich the experience of our employees? Are we going to be able to attract the best talent to come to our company once they're here? Can we provide them with the best tools to nurture their potential to help them realize their career opportunities and goals more effectively with the AI that we've put in place? We measure this inside of Microsoft in our own AI transformation. I've rolled out Copilot to all of my people. And you might say, well gosh, that's obvious. You make the product, but actually the opportunity cost is quite high because of the cost of the infrastructure and everything we have to do to prioritize these days. Everything I implement internally is just one less thing I can implement externally. So the payoff must be there. So weekly I track the utilization and the enrichment of the employee experience and measure it back. And I can tell you that within our sales force, for example, the folks that are the top users of AI are 10% better at producing pipeline, have 23% faster close rates, and generate 9 million more revenue per head. So the business results and the outcomes and the nurturing of the environment is critical. When it comes to customer engagement, you also have to think about how you're going to personalize the relationship you have with your customers. And Microsoft has tens of thousands of enterprise customers where we have great one-on-one relationships, but we also have millions of SMB customers. I would love it if someone with a Microsoft badge could talk to each and every one of those customers, but it's just simply not practical. We can use AI to drive hyperpersonalization and better engagement, customer self-service. And as a result, our NPS scores have gone up by over 12 points. Our customer self-serve is up 35% year-over-year. And so the realization of growth through better customer engagement powered by AI is there. The third pillar is about reshaping business processes. And we all have legacy processes that need to evolve. Microsoft recently celebrated its 50th anniversary, which is not that old. Many of you work for companies that are older, but in technology, 50 years makes us ancient. So, we have to remember the fact that when Microsoft first started distributing its products, we printed software onto a CD and put it into a box and handed it to distributors and had them send it around the world. If you stare closely at my order management system today, you can see artifacts of that past. Using AI to reshape those business processes so that people can spend less time on the overhead of operations and more time working with our customers, more time innovating new products. We've committed to our board that we'll continue to grow revenue at the same rates for the next three years with the same headcount. So, it's not about reducing our workforce. It's about shifting to the left and having better engagement with our customers and shifting to the right and building better products for our customers. Which brings me to the fourth pillar, bending the curve on innovation. We've all seen what AI can do in terms of writing software. And in fact, at Microsoft, on average, AI writes 35% of the code that we have today. And that spans across our entire portfolio. Some of our newer products like the ones you'll see today, Copilot, Co-work, more than 80% of the codebase for that product was written using AI. So we can see how it helps you get better product, more product to market faster than ever before. But it goes so far beyond coding into basic science and discovery. Our quantum lab teams that are staffed with very intelligent PhD researchers that are the last folks in the world that would admit that AI could help them do something better than they could do it themselves. They will tell you that we're 5 years ahead on our quantum delivery. We're now bringing chipsets to market. We never would have been able to do that without using AI and the discovery process, new states of matter, new materials. And it's not just in technology, it's in other industries as well. We see it in healthcare delivering on the promise of AI drug discovery, shortening the cycles to bring new medications to market, better cures, lower costs, better outcomes for society. So this four-pillar success framework when used properly can help drive frontier transformation, true growth, expecting more from AI. In addition, you need to have the right approach inside your company. These three traits we think represent high potential for the frontier firm. First, you have to put AI in the flow of human ambition. We can't spend our lives cutting and pasting into prompts and getting data back and then figuring out what to do with it. It has to show up in the tools that people use each and every day. And you'll see this throughout the demonstrations that we're going to have for you this morning. The second is you have to unlock ubiquitous innovation. There's a maker in every one of us. And more often than not, the people on the front lines closer to the business are actually in the best position to solve these problems versus having to rely on professional IT or development to build products for their own use. So putting AI development tools into the hands of the citizen developer and enabling that business potential is super critical. But if you do that, you also then have to have this third trait which is observability at every layer of the stack. What is AI doing in your environment? Is it helping you to produce the outcomes that you expect? Is it operating in a well-governed, well-managed and secure capacity? And are you getting the ROI that you demand? So, we're going to show you how you enable these three traits through the power of a platform. So when I travel to all of these locations around the world and have great privilege to talk to so many customers and so many industries, I often ask, what do you think the most important aspects of an AI solution are? And if I were to have asked you to do a little bit of a survey, I'm sure we'd get a lot of different answers. But two that most often come up are, gosh, Judson, isn't it about models? Like every day, every week, we hear about a new model dropping and new capabilities with the model. So models must be one of the most important things in these solutions. Then some of you might say, well, it's silicon, right? You need GPUs to make AI come to life. So it must be models and silicon must be the two most important things in an AI solution. This morning, I want to debate that with you. I think the two most important things in any AI solution are intelligence and trust. You have to have a platform that harnesses your intelligence as an individual, as an organization, as a company operating in an industry. And AI needs to amplify that intelligence, not take it over, amplify it, help you reach your potential while you continue to build out the platform of intelligence that differentiates your business. The second thing is you have to have a trust platform that enables this governance, manageability, security, ROI, the things I've been talking about as an aspect of frontier transformation. We believe in this at Microsoft. So much so that we have pivoted our entire portfolio of capabilities around intelligence and trust because these are the two most important things. I mean, case in point, 6 months ago, all anyone was talking about was the latest GPT-5 models. Then a month later, it was Gemini 3. Then a month after that and even through today it's Anthropic. Next month it'll be something else. So do you want to change out your entire information work platform, your entire development platform, your security and operations platform, your supply chain platform, your finance platform, your system of record every time a new model drops? No, you want to build a platform for intelligence and a platform for trust and leverage the latest and greatest AI to amplify the same. So in November at our Ignite conference, we announced over 70 products, but all really anchored around five key products that enable intelligence and trust. The first three all relate to what we call the Microsoft IQ platform. It's a platform that enables your IQ to remain front and center as the top priority in your AI strategy and your top priority in your frontier transformation strategy. It's far different than simply using models to connect to data. I'll give you some examples. Work IQ is the brain inside of Microsoft 365 Copilot. It knows how you work, with whom you work, the content over which you collaborate, your most important business flows and it knows this definitively not through inferencing or guessing. The second thing is Fabric IQ which provides the same kind of semantic context over your data. Now what we've done here is we've taken the brain out of Power BI which was already a cross-cloud, cross-data service analytics solution. So if you have data in Google BigQuery or Amazon S3 data stores or Azure data services or your own on-premises data environment you can use Fabric IQ to understand all of your data and enable models to reason over it to produce better outcomes. The third is Foundry IQ which is the middle tier. Think of it as the application server layer that allows you to harness your own knowledge bases and nurture your IQ. Again, your differentiation. Put it all together in a scenario like supply chain management. So, if you're going to build an inventory agent, an out-of-stock agent, an availability to promise agent, you're going to need to reason over the system of record. Lots of data sources. Fabric IQ shines there. You're also going to need to then look at external data, data from third-party logistic companies, weather patterns, tariff scenarios, and there you can use Foundry IQ to harness all of your data. And then finally, you're going to want to work across your distributed workforce and their Work IQ can help you understand how to get the right information to the right employee at the right time to take the right action. So the IQ platform enables model diversity, openness and heterogeneity to really bolster your IQ, keeping it front and center in differentiation. The next major announcement we made was around Agent 365. It's an observability platform, a trust platform that enables you to see every agent operating in your environment, whether it was built on the Microsoft platform or anyone else's. An open registry for all of your agents, connections to your security environment, and a mapping visualization that allows you to see how agents are coming to life in your business. When we turned this on inside of Microsoft before we announced in November, the preview, we had over 150,000 agents being used by 80,000 employees on a weekly basis, which is materially greater number than we ever thought we had. And we're a reasonably competent technology company. So this agent sprawl is a very real thing. Getting your arms around it, being able to govern it, that's what's behind Agent 365. And then finally, we announced Agent Factory, which is a way for you to build agents across line of business using every asset that Microsoft has in one single meter so that you can build consumption patterns that map back to the real work being done and pay for value. But we didn't stop there. The innovation continues. In March, we announced wave three of Copilot, bringing agentic capabilities into Copilot that I'll show you in just a moment. We also announced the preview of Co-work, Agent 365 becoming generally available earlier than we had planned because of the adoption. We already have 30 million agents out there worldwide in the agent registry in Agent 365. And then we announced something called Microsoft 365 E7, the frontier suite that has all of these Copilot assets and Agent 365 built into the solution so that you can deliver on the promises of AI transformation. Now, we've brought all of these scenarios to life today for you in a scenario through a company we call Zava. And I want to play a video for you to introduce conceptually everything that we will show to you for the rest of the session this morning. So please roll the video.