Microsoft re-org focuses on edge, AI

Microsoft CEO Satya Nadella issued a memo to Microsoft employees recently – and we expect it is going to have as lasting an impact on the company as Bill Gates’ famous “Internet Tidal Wave” memo of 1995.

Entitled “Embracing our future: Intelligent Cloud and Intelligent Edge”, Nadella outlines a plan to reorganize the company around a vision of a ubiquitous distributed compute fabric that extends from cloud to ‘edge’ and infuses everything with AI.

Key Takeaways:

  • Edge computing and AI are going to be essential technologies for this new version of Microsoft.
  • Microsoft plans to invest $5bn in IoT products, services, and research over the next four years, further highlighting the shift of development focus to edge services.
  • Microsoft is showing leadership in AI by working to ensure that it develops tools to detect and address bias in AI systems.


Nadella has directed a team to be organized around what he called Microsoft’s “Cloud + AI Platform,” with the goal being the creation of an integrated platform across all layers of the tech stack, from core cloud services to edge services.

Within this organization are several specific units focused on AI, including:

  • Business AI – focused on the internal application of AI
  • AI Perception & Mixed Reality – A new team taking speech, vision, MR and related technology and build Microsoft products as well as cloud services for third parties on Azure.
  • AI Cognitive Services & Platform (focusing on AI Platform, AI Fundamentals, Azure ML, AI Tools and Cognitive Services)

Perhaps less noticed, but of great significance is Microsoft’s move to address issues around the ethics of applying AI. As Facebook is learning the hard way, AI and ML applied to personal information can be misused, causing significant damage to society as well as its stock valuation.

Nadella is establishing the internal “AI and Ethics in Engineering and Research” (AETHER) Committee to ensure Microsoft’s AI platform “benefit the broader society.” Nadella promised to invest in strategies and tools for detecting and addressing bias in AI systems.

Windows won’t go away, but definitely takes a back seat in the “Experiences and Devices” team. The former leader of the Windows and Devices Group, Terry Myerson, is leaving Microsoft, and there are a number of other executive moves detailed by longtime Microsoft observer and journalist Mary Jo Foley.

Company background

Nadella has issued impactful memos before – following his 2014 company-wide email describing his vision of Microsoft as a platform company in a mobile- and cloud-first world, he cut 18,000 jobs as part of the most massive layoffs in the company’s history.

How does it company to Gates’ ‘Tidal Wave’ memo from 22 years ago? Gates’ memo was filled with more urgency, as the company was in danger of missing the internet wave;  Nadella’s latest memo is forward-looking in a different way, written from the perspective of a company that’s not far behind the competition. Still, Nadella recognizes that company’s structure and size could be a hindrance in adapting to the era of cloud and edge and has adjusted accordingly. It might not be as well remembered as Gates’ memo 20 years down the road but will be of no less importance as the industry fills out the role that edge services will play in the next two to five years.

Leave a Reply

Your email address will not be published. Required fields are marked *