Microsoft at 50
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Welcome to Business Daily on the BBC World Service. I'm the BBC's technology editor Zoe Kleinman and today we're in Seattle in the United States to take you behind the scenes at Microsoft. It's not a place for the faint of heart. That's one of the things that I learned right away. As the tech giant marks 50 years since its founding, we look at how it became one of the world's biggest companies. What got us here is not to be obsessed about longevity.

but to be more obsessed about relevance. And ask what the firm's focus on AI means for its future. This is something that historically, highly manual, very boring, not exciting part of the job, but the agent's able to go do that for me automatically. That's all coming up on today's program. Welcome to building 87. Oh, I hit the button.

This is a group of a bunch of different labs all focused on hardware. We're on a tour of one of the most important tech headquarters in the world. This entire building was built to support Surface, Xbox and Quantum, but it's primarily Surface. We're here because 50 years ago, in a now legendary startup story, two school friends dropped out of university and founded a company.

Only because we'd read about the computer properly were we able to take the program and have it run. And so Paul was very excited and called me up when that worked. And that's really when I dropped out of school and started Microsoft. That, of course, is Bill Gates talking about his friend and co-founder, Paul Allen.

Now, as part of a series of events to mark this milestone anniversary, Microsoft has invited us as part of a small group of journalists to a series of events at its head office in Seattle, including a Q&A with its chief executive, Satya Nadella. What got us here is not to be obsessed about longevity, but to be more obsessed about relevance.

Size matters in Seattle. The journey to Microsoft's Redmond campus from the city centre takes you across the world's longest floating bridge. If you look closely, you can catch a glimpse of Bill Gates' enormous lakeside mansion, Xanadu 2.0.

And when you arrive at Microsoft HQ, well, it's also huge. It's set in 520 acres of land. Around 50,000 people work here. It's home to 130 buildings, five beehives, there is indeed Microsoft honey, and three tree houses. No surprise when you consider this company has a stock market valuation of $2.8 trillion. MUSIC

There are many worlds within this tech town. They fight cyber attacks here, design silicon chips, create new Minecraft experiences, research quantum, build the AI tools of the future, and they keep everything. Patti Thibodeau is Microsoft's archivist. We have a little bit of everything from our hardware, our software, and everything in between. Things related to gaming, as well as the technology

items that are made throughout the process of our development. So we have a wide array of content, whether it be physical items, video, photos, as well as the documentation that lead into all those. Do you have less physical stuff now because so much more of our stuff is digitized?

You would think. The thing is, is a lot of what we're creating is still physical. We are still creating hardware and things like that. So we are slowly creating more prototypes. It's not just like this is step one and we have one prototype. It'll be stage one with 50 different prototypes. So we are still collecting a lot of physical content. Is there a particular decade that was the most prolific that you got the most stuff from?

Probably the 90s. I mean, that was Windows 98, Windows 95. A lot of our big innovations happened around that period. Not that we aren't innovating now, but things like Copilot, things like that are still so new that we don't really have collections for those yet because we're trying to figure out how are we collecting on those new products. So given that there's been a good amount of time from the 90s, we are still collecting quite a bit from those areas. And how are you preserving it all?

We have our temperature-controlled vault. So we have a vault that we keep at 55 degrees, 45% relative humidity year-round. So anything that we can do to just expand the life of these products just a little bit longer so we can use them for reuse and learning.

And you've got clothes here, haven't you? You've got costumes, you've got motorbikes, you've got, it's not just operating system manuals. Yes. Yeah, we have a lot of various items that we have collected throughout the history of Microsoft that go beyond just our hardware, our software, because we want to be able to tell the story of Microsoft and not just our product, but our people. Wonderful.

One of those people right at the top is Brad Smith. He's one of the company's longest-serving executives, having joined in 1993 as part of its legal team. Now he's Microsoft's president and vice chair. To me, what's most exciting is that Microsoft has stayed relevant by constantly focusing on how to make computing possible

what I would say more accessible to people and genuinely beneficial to people from individuals to say small businesses to governments 50 years ago,

Basically, you could not fit a computer into even a large flat in London. They were so large. And Microsoft helped make computers not only smaller, but cheaper, more powerful, more beneficial. And we're doing it today with AI. It's really a story of constant reinvention. You have to keep on top of that really quite fast-moving wave, don't you? It's been fascinating for me as somebody who's been here more than 31 years. Wow.

You could look at Microsoft and say, wow, you've been such a successful company. Every year it feels like we're behind because the frontier keeps moving. But it's not a place for the faint of heart. That's one of the things that I learned right away when I arrived in 1993, having joined from having spent four years working in London. What do you mean by that? Well, it requires a certain intensity. It requires a certain ambition. I think it requires a certain humility.

That's what I've always tried to encourage our employees to think about. And you can't slow down. If you slow down in this industry, you are left behind. And now with the AI revolution that we're living through, the pace is faster than ever, isn't it? Is that the direction of the next 50 years?

I do believe the time from now to the middle of the 21st century will fundamentally be defined by artificial intelligence as quite possibly the single most technology development.

It will change the way we work, the way we interact. It will change, say, the National Health Service, how citizens interact with their health provider. And it will be constantly reshaping our industry. It'll be reshaping economies. And that is quite a scary thought for lots of people, isn't it? We are talking about a dramatic change in not only how the world runs, but also what jobs we do.

I think change is always a little bit scary and hopefully a little bit or more than a little bit exciting. And believe me, there are days when I think for all of us, we're like, please, could the world just spin a little more slowly for a few days? We could catch a break. But I think there's a lot that we've

done over the last few centuries in various parts of the world to figure out how to adapt to change, we're going to have to take those lessons and apply it again. Is there anything that you think AI either cannot or should not do? Well, to me, the most important principle is that AI needs to be a tool to help humans. And we should make sure that humans not only remain in the loop,

but remain the decision makers for the things that are truly consequential in people's lives. That is true in a great many areas of life. We want the fundamental decisions made by the governments that lead us to be made by the people we elect, not computers that they may turn to for some information and analysis. So I just think that it almost starts with a fundamental philosophy

AI needs to serve humanity. And if we build and deploy this technology with that philosophy and that principle in mind, I at least will be more optimistic about the future of humanity. There are two costs to AI which are very high at the moment. One is compute and the other is the environmental cost. Can we as a planet afford it?

I do believe we can afford it and I believe we should afford it in large part because of the benefits it will bring. It means having more sources of carbon-free energy, whether it's wind or solar or hydro or nuclear. It means having greener concrete, greener steel, greener chips, meaning chips that are produced in plants that run on greener energy themselves. I remain optimistic that we are going to achieve our goals.

This is Business Daily on the BBC World Service.

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I'm Zoe Kleinman, and today we're looking at Microsoft's 50-year journey and asking where the company goes next. Of course, over that half century, the company has come in for a lot of criticism. There have been accusations of monopolistic business practices and countless lawsuits, including from the US government.

Famously, about halfway through the 50 years back in 1998, it was sued because of its monopoly place in tech. It literally put Netscape, a very famous Silicon Valley company, out of business because of the browser wars that were famous. This is a company that used its size and market capitalization, its stock value to dominate industries everywhere.

Scott Budman is a technology reporter for NBC based in Silicon Valley. The legacy of a gigantic company that by sheer size and wealth can buy out its competitors and just own a marketplace.

is intimidating to a lot of people even today. There are plenty of young people who think, "I have a good idea. I have a way to do something better. Let's start a company." But they're so worried that Microsoft is going to get into that game that they maybe move somewhere else and do something safer. And the world misses a good idea because of that fear. But Microsoft itself has had a couple of big misses, most famously the phone.

Yes. Microsoft has struggled when it comes to certain consumer products, which is interesting because it does consumer software as well as business software well. It does video games, perhaps the ultimate consumer product if you're a young person. It does that very well, but it has struck out on a couple of big things.

You're right. Phones, Microsoft never got around to. It bought entire phone companies. I mean, it bought Nokia's handset company. Nokia, a very successful phone maker. It still couldn't make that work. It also famously bombed with the Zune, which was the idea that we, you know, Microsoft would make our own

iPod and nobody bought it. It obviously didn't turn out to be a success and everywhere you look you now see either iPods or now iPhones but the music player became a huge thing and Microsoft just could not successfully get in there. What's the view of people in the US of Microsoft? Is it a sort of national treasure or is it something that they don't quite trust?

That's a great question. I think overall, it's something they don't quite trust. It is the behemoth of behemoths, right? It's Microsoft. It's something that's been in most of our lives for our entire lives.

Here in Silicon Valley, where I sit, it was known as the evil empire. It was actually called that. Why? Well, because it was so big and it was somewhere else. It was way up in Seattle, which by the way, is not that far from Silicon Valley. It's a quick flight. Microsoft has since put a big beachhead down here in Silicon Valley. It's part of our ecosystem. I think because it's been part of our lives for so long and so big, it's always been seen as this huge company. But if you break it down,

Some of the products, whether the software, ChatGPT from OpenAI, Minecraft, which, you know, even my daughters play, people really like the individual products without even knowing that they're connected to Microsoft. What do you think the next 50 years holds for Microsoft?

I think and it's almost amazing. I think maybe 20 years ago, we wouldn't have been talking about the next 50 years. We would have thought this company is just going to sort of run aground at some point, whether for legal issues or just because it doesn't move quickly enough to keep up with the times. But now that it's doing that, the next 50 years actually look like whatever the next 50 years in tech look like.

And so to the future. The company's going all in on artificial intelligence. It's pumped billions into various projects, including its commercial partnership with chat GPT makers OpenAI. So what's the next big step? Corporate Vice President for Business and Industry co-pilot Charles LaManna is convinced it's something called agentic AI.

An agent works on its own. It can go and complete things completely in the background, run for hours or days even. We see the way we're going to interact with them will even feel different. You'll send them an email, and you'll get an email back the next day. Or you'll add them to a meeting, and they'll wait there, and only when they feel like it's the right time, interject with a suggestion or a recommendation. Or they'll listen to changes in a database or an application. So lots of different ways of interacting with agents that aren't just chat.

Charles is showing me an example of one of its AI agents. This one is used by the consulting firm McKinsey. The idea is to increase productivity. You're

You can see here's an example from a client asking to go do a project for Horizon Tech Solutions, and they describe some of the requirements in email. And the way McKinsey used to do this is they have a team of scheduling individuals who get these emails, and they spend about 20 days on average to get the right team assembled in the right location with the right expertise.

What they're able to do is to create an agent which would listen to these emails. And what their scheduling desk is then able to do is they go to Copilot. And the idea is that inside of Copilot, I have all these agents on the right-hand side. And I'll ask it to evaluate a request. So basically it's telling it, go to the email, look at the pending requests, and tell me what your recommendation is.

and will give a recommendation. Here's what they're asking for, here's the timeline and budget they have, and here's even some teams that I'd recommend to go schedule. This is something that historically, highly manual, very boring, not exciting part of the job, but the agent's able to go do that for me automatically. And they're making the job more efficient for that scheduling desk. It's very specific, isn't it? You have to be very clear in your instructions. Yeah, the way I say is if you hire someone to your team,

and want to document how they should behave, you kind of need that same level of specificity. And then one thing which makes agents really different from chatbots is they can actually do things. They can

take action, drive changes, update a system, or send emails, or make scheduling requests. Are they expensive? I'd say it's all relative. They're more expensive than like a classic web application or website, but a lot cheaper than having to go find an expert, or in most cases, it's just completely unserved need. They're not perfect. Neither are people. So you want to make sure you have the right systems and protections and guardrails so you're

If they're 95% accurate, that's enough to get the job done 100% of the time. And you can do that. And in the case of McKinsey, that's why they still have this step over here where the person is reviewing the suggestion before the agent proceeds. So kind of that idea of people and agents working together.

After four days of wandering around its huge Seattle campus, it's clear Microsoft isn't planning on going anywhere. Throughout competing, buying up or sometimes crushing its rivals, it's managed to stay among the top players in the tech world. Right now, it's throwing everything behind AI. But whatever the next big advances over the next 50 years, Microsoft wants to be there, right at the centre of innovation.

Thanks for listening to this edition of Business Daily. Today's episode was produced by Imran Rahman-Jones, Georgina Hayes, and Rumela Dasgupta, and presented by me, Zoe Kleinman. This is Doug Gottlieb for The Doug Gottlieb Show, where the Toyota Tundra and Tacoma are designed to outlast and outlive, backed by Toyota's legendary reputation for reliability.

Get in a Tundra with available I-Force Max hybrid engine delivering exceptional torque and towing capacity. Or check out a Tacoma with available off-road features like crawl control. It can take you beyond the trails. Toyota trucks are built to last year after year, mile after mile. So don't wait. Get yours today. Visit BuyAToyota.com for deals and more. Toyota, let's go places.