Microsoft Corporation (MSFT) Earnings Call Transcript
February 10, 2021
Earnings Call Speaker Segments
Hello, everybody. Good afternoon. This is Kash Rangan from the Goldman Sachs technology team here. Really delighted to be able to host Microsoft and a very special speaker from Microsoft, Corey Sanders. I was going through his background. First of all, Corey, welcome to Goldman Sachs Technology Conference.
Thank you for having me.
Absolutely. What a pleasure. And I noticed that you're a computer science undergrad, and you are a Microsoft lifer. And explain to us, if you don't mind, how you started out being a [ quarter ], if you will, and then all the way up to running worldwide commercial sales, which is the single most interesting business at Microsoft. Every business is interesting, but this is the one that is front and center. It's the biggest business, the fastest-growing business. It's a center of attention. How did you -- how was your progression like going from [ computer science back to this ]? Congratulations.
Thank you. Thank you. Yes. No, it's been -- I mean, it's been a wild journey. Interned at Microsoft originally. Truth be told, they're the only one that offered me a job. So I guess got lucky there. But started as an intern, as a developer like you mentioned. I was actually fixing bugs in Windows back in the Vista days. So that was kind of my first gig. Over time, I felt like I wanted to do more with sort of building product and engaging with customers. And so I moved to working on product in Azure. And it was in '09. So the product had just been named Azure, just to sort of level set where it was. And so I think I was like the fifth PM on the project and helped build out some of the original compute services, did that for about -- sorry, a decade, about 9 years. And then I realized that I really loved working with customers on their problems. And so as much as I enjoyed building the solutions at Microsoft, I actually really enjoyed helping customers build their solutions using our capabilities. And so it moved me into this role, which is, as you mentioned, sort of, I'm responsible globally for, I like to call it, customer enablement sort of across all of our commercial solution areas. So that includes Azure, so Apps and Infra, Data and AI. But it also includes modern work, Teams, Office, sort of all of the productivity capabilities, collaboration capabilities and then also Dynamics and Power Platform. So it's been a wild ride. And like you said, a lifer at Microsoft, but love to be a part of every year of change for us, which has been really pretty something -- something to behold certainly from the inside.
Absolutely. I mean it's really remarkable that you are in the worldwide commercial sales organization, and you have such important responsibilities. I guess having been a former engineer, still -- I suppose you're still an engineer, you'd see tremendous credibility when you speak with customers. So what's on customers' minds these days? Does the availability of a vaccine changing things to do with customer priorities and maybe it doesn't? What are your thoughts there?
Yes. What's been -- obviously, the pandemic has been such a terrible impact for our society. And it's really changed the approach that many customers have taken towards digital transformation. I know that Satya oftentimes calls the sort of the dawn of the second wave of digital transformation. And there's really -- it's really true when you sit with customers. They are accelerating in ways that perhaps they had talked about or always thought about planning to do at some point, but they're really putting energy behind it. In some cases, because they have to. In some cases, they're moving to a digital workforce or remote workforce, being able to depend upon collaboration around the world and leverage that for their services and solutions, whether it be working their manufacturing plants in a remote way or engaging with their customers in a remote way, depending upon e-commerce when perhaps 90% of their business used to be in-person sales. These are some of the changes that we're seeing, and it's really shifting the way companies spend money. It's shifting the way they focus and prioritize these types of projects in that they're more and more seeing that if they don't take these digital transformation steps forward and invest in these areas, they're going to struggle to continue to remain relevant in the sort of shifting market.
Got it. Corey, if you could just put a finer point on it, what kinds of projects are getting prioritized versus -- is it the IT budget? Is it certain finite thing? We make room for something, you got to eliminate room for something else. What is going up, what is coming down, given your broad perspective running commercial sales for the company?
Yes. Look, I think the focus on leveraging data for insights and doing this in sort of a remote environment feels like it's sort of a broad brush, a really big shift for companies. Many, many companies deal with silos of data. They deal with each individual business unit having sort of their own data, their own analytics, their own sort of assessment. And as these companies have both needed to figure out what is going to be their next revenue stream, what is going to be the areas that they have to pull back from, how are they going to reprioritize, the focus on consolidating data on thinking about analytics fully end-to-end to drive outcomes, that's been a really big area of focus. I think that, that's been something that we've seen just a whole lot of attention brought to. And then I think sort of layering on that sort of how to take that data to drive sort of digital-first remote experiences. So taking sort of that data and being able to improve the way people engage in a day-to-day environment, improve sort of the way in which again sort of an auto manufacturer runs their assembly line, listening to the devices on the assembly line and then being able to support remotely service of that assembly line in a digital way. So these are the places that are getting the investments and getting a lot of attention as people look to this shift and almost all of those being sort of cloud services that they're depending upon.
Got it. Got it. So I suppose it's positive for analytics, business intelligence, Power BI, those kinds of products, right?
Yes, definitely. Sorry. And I could definitely -- I was talking broad strokes, but let me talk specific to Microsoft. So yes, I mean, the types of products that, that really supports. Certainly, Teams and collaboration being a really big major one, right? Obviously, everyone is sort of shifting to those collaboration experiences. Analytics, like you said, sort of being able to take analytics, but then also our AI services built into things like Dynamics, right? Taking advantage of customer insights and being able to draw conclusions based on the business outcomes that they're looking for, again, pulling from those single data sources. Those are the big areas, for sure. And then I would probably maybe add one more, which is security. This is something that's seen such a huge level of investment. And I think the -- perhaps one of the saddest parts of the pandemic outside of the pandemic itself is that it's become an opportunity for bad folks to take advantage of many customers and many challenging situations that folks have. The investment in security is going up, and it needs to. And I think the opportunity to secure environments from endpoint to infrastructure and sort of bring all those components together, that's been a really big investment area over this last year.
Got it. Got it. When you look at the pipeline of commercial business, maybe you want to characterize it on a year-over-year basis or sequentially, maybe more useful to look at it sequentially because the economy is hopefully improving sequentially fairly rapidly. At least according to Goldman Sachs economics team, we're calling for U.S. GDP to accelerate to about 10% or so in Q2, some of the highest forecasts out there. So as you look at your pipeline today, how does it look relative to say, 3 months back or 6 months back or 9 months back?
Yes. It really depends on the customer and the industry, right? Like I think it's -- obviously, the breadth of customers that we support are pretty wide and pretty differentiated. I think for some of the industries that are starting to see some of the rebound as sort of you just outlined, sort of seeing the V-shape in their business, we are seeing sort of that combined with sort of the point I just made about this increased focus on digital transformation, is pushing a lot of energy and excitement into customers approaching their business in a different way, willing to sort of take the investment and sort of build their dependency on sort of these cloud-based solutions, these digital solutions. And so I think across the full breadth of Microsoft's products, it's pretty exciting. I think that the opportunity to go out and help customers, deliver on that promise. And so I will say, though, it does really depend on the industry. There are still industries hurting and still industries that are trying to figure out their next step. But for the ones that are feeling that sort of rebound that you outlined, I think they're definitely showing up with a lot of passion to go make these digital changes quickly.
Got it. If you could, Corey, just look at an average customer or the profile of an average customer. When they are doing digital transformation with Microsoft, I mean you've got a $67 billion, $68 billion run rate business growing 34%. What are the products they're picking and choosing from the Microsoft family under the banner of digital transformation? And what is the outlook for those kinds of products going forward?
Yes. A few that sort of I already talked about, but I think that maybe to sort of reemphasize and go even a little bit deeper, I think data being a core component of digital transformation and then the AI output of that into all of our other services. And so when I think of sort of the key services, I think Synapse, sort of our data warehouse, our analytics solutions around that. We are just seeing a huge amount of excitement and attention there with sort of data ingest coming from lots of sources, right, again, sort of the data silos trying to break those down, bring them together and drive your insights and outcomes. So that's an area that I think I've got a lot of passion about. And then I think that sort of feeds all of the other businesses. So if you think about sort of the shift in sort of depending upon digital, digital data, sort of digital leads, as I like to call it, for driving your sales business, suddenly Dynamics becomes a really interesting conversation, sort of categorizing your customers using AI, sort of being able to engage with your customers using collaborative technologies while also understanding sort of the right next-best action using sort of the data ingest that you pulled together. So I think our Dynamics capability is driving business outcomes. And I mentioned retail. You could expand that to supply chain. You could expand that to commerce. You could expand that to sort of all of the Dynamics suites. We're really seeing some energy and passion there. And then maybe as a separate category is sort of the change in the way we work. I do think that this sort of push even in a rebound state, even sort of a state where the vaccine becomes prevalent and people start working in person, the desire to engage in a much more collaborative way than ever before possible with Teams and sort of the extension points of Teams, not just of meeting with a camera, right? But sort of a meeting with a camera, with chat, with the apps that you use, with sort of the understanding of your work-life balance, with the recommendations around sort of the right tools that you should be using to improve your experience, chat bots to help automate processes. I think all of that is really coming together as a great opportunity for what customers are looking for.
Got it. And then to the piece of the business that everybody wants to talk about, Azure. How did the name Azure come about? I'm just kidding. That's not the question. But...
I think the color of the sky, I think, was the absolute original -- yes, the original idea. So anyway...
Cloud computing. Yes.
Yes, exactly.
Yes. And it took a while for people to really start to, "Oh, you know what? This is real. This is actually real." We had -- I don't know if you remember Bob Muglia. He presented with us in 2009. He talked about Azure for the first time. We were, "What is he talking about?" Well, 11 years later, here we go.
I just joined his team in 2009. So yes, I knew Bob.
You did? No way.
Yes, I knew Bob very well. Yes, yes, exactly.
Wow, that's amazing.
Yes, yes.
Amazing. I have to pick your brain on Snowflake because he used to be at Snowflake later. But I do want to ask you about Azure. Azure looks like it's the turn in the business in this quarter, which was a very pivotal quarter. It's such a big business. What -- and it's almost generic to ask what is driving that reacceleration. You probably answered 90% of it. But if I want to just get a little specific, what is causing that reacceleration in Azure? And how sustainable is this terrific growth rate that you guys have put up?
Yes. Look -- yes, so we're really excited. I mean I'm really excited, obviously, having started in Azure in my early years. Look, a big part of this is sort of the overall industry growth that you mentioned, right? I mean, I think this -- if you sort of look at the history of sort of the Azure usage and customers' approach to Azure, there was a period where mostly customers were focusing on optimizing, right? They were focusing on reducing their spend, but -- which creates an opportunity for reacceleration as sort of the business starts to rebound and sort of, as you mentioned, that sort of industrial trend has started to really turn around, which has been -- which is exciting, I think, for all of us for sure. I would also say specific to Azure and Microsoft, some of the things I even already talked about, there is an increased usage of some of the premium services and some of the sort of new services and solutions being built as customers focus on digital transformation versus sort of the classic lift and shift for sort of agile infrastructure, which I love, right? I designed it originally, so I love the service. But when you sort of get down to true digital value for customers and sort of that digital transformation momentum, it's these premium services. It's new application development. It's Synapse. It's being able to take advantage of Databricks. It's these types of capabilities that we're seeing some real momentum around. And it's helping fuel it. For your point about sort of long -- look, I'm pretty excited about the growth that we're seeing. But I'd always couch it with, as you mentioned, it's a big business. And so there's always -- you've always got to kind of remember that it's a big business. And so that will sort of temper outcomes.
The amazing thing is that as big of a business as it is, every time we speak with Microsoft, we get the sense that more and more of that growth is driven by new workloads, whereas -- we've been trying to think that it's a migration. It's a transition. You take that whole thing to your point, lift and shift, right? How much of that is still around because I'm looking at Microsoft having been in the server business for 25 years, you've got a massive, massive install base. You've got a big market share, right? Does that ever start "moving to the cloud" at some point?
Yes. So we're -- look, I think we're definitely seeing both, right? I mean, I think that we see a significant migration of existing workloads. The Windows, Linux, SQL, right, like it's not -- not just the Microsoft core components, but it's a lot of exciting open source development -- or migration, I should say, as well. So that's definitely a big component of it. Like I said, new workloads, for sure, are driving a lot of the incremental growth. When we think about just this trade-off, hybrid actually is a big selling point and a big value-add for customers, right? And that hybrid story is sort of enabling customers to think about digital transformation, not as a cloud-only answer, right? When you think of some of our capabilities like Azure Arc, which creates sort of a unified experience between on-prem and cloud, enabling you to run things like Kubernetes or sort of managed data services in both places, it allows customers to make that digital transformation step without the boundary of whether you're going to be in public cloud or not. And so the result of that is they will still buy more on-prem in addition to growing in the cloud. And so it's -- which I think is a great outcome for customers, right? They really sort of -- they don't sort of have this boundary condition. They don't have this sort of limitation. They can take their digital transformation in the way that they want to. And I think it's a unique set of offerings that we have that can enable customers to do that. And this is why we see growth in both, right? It's something that I think we get questions a lot of, hey, how is your cloud growing and your server. And this is a big component, right, is that customers are growing both. And sort of the hybrid picture is enabling them to do that seamlessly.
Got it. At one point in time, the 2 tracks were going sort of parallel with cloud development and the on-prem, then you had this thing about Azure Stack, which I still remember when I heard about Azure Stack, I said, "This is brilliant because you could bridge the old world with the new world upgrading to Azure Stack." And what you're saying is actually even more positive for the type of the cloud business because if you're still seeing a lot of our on-prem business, those workloads are going to be loyal to Microsoft for a lot longer period of time. So when they do make that decision to go to the cloud, it's you that it's going to benefit, right?
Yes. Exactly. I mean, I think that Azure Stack sort of bringing -- was the first component of this overall picture of hybrid. But yes, to your point, I mean, it really is about offering choice. It really is about saying that, look, you don't have to -- when you're picking sort of SQL, I'll use the sort of my best example, you don't have to make a tough decision over PaaS in the cloud or manage your VMs on-prem. We're giving you this choice to be able to use SQL however you want to use it, wherever you want to use it. And we think that's a value add, to your point, that's going to keep them using SQL. We think that they'll see the value in sort of that renewal conversation and will continue to expand even usage of SQL as they continue to grow, right? It's just one example of that type of product. Yes.
It just occurred to me that you would have a viewpoint on databases in the cloud, which alone, that alone could be a 30-minute conversation, so fascinating.
I love databases in the cloud. Yes, totally. We should -- we could take that offline.
But maybe we should talk about it, right? I mean I'm not going to ask you. But I'm fascinated that, that segment of the market, you still have some big companies there. But you guys have really turned that business around committing to the cloud in a significant way. And you're seeing the benefits of that in improved market share, whatnot. What is your prognostication? You get benefit -- you're a computer science undergrad from Princeton. You have the credentials, the street cred to be able to have a viewpoint on this. How do you see databases in the cloud? And how is Microsoft positioned for that future that could be potential really?
Yes. Yes. This is -- you're walking into sort of one of my most favorite maybe topics, and I think differentiators that we do have with Azure, which is our Synapse Link product. One of the things that if you sort of go into the depths of database challenges that customers have, they sort of split their data up into operational data, so the things that are supporting a website, right, and then analytics data, right? The things that are sort of -- they're running overnight and they're sort of deciding, hey, which product should we put first on our page or second or whatever. That's a retail example, but it goes everywhere. And one of the biggest costs that customers have is trying to bring that operational data into that analytics data and then do your calculations and run it. And like many customers over years, they basically do every night, they run this big ETL process. It costs a whole lot of money, et cetera, et cetera. And this is where when you think of some of the future databases and the opportunity to be able to have one global scale databases, so you're no longer having to spin this up in one place, you can click a button and you've got it in 7 places worldwide to support your website. But Synapse Link, which is something that we recently announced, allows you to, in database terms, effectively join your operational data into your analytics data. So you effectively can run your analytics queries. You can determine your, sort of what's the right product to show on your page without moving data anywhere, without duplicating data. It basically just pulls from the operation. Now this is only possible with this type of cloud innovation, where we know the database is going to be built and deployed in this way, and we know the analytics service is going to be deployed in this way. And so we can make this connection behind the scene that saves customers' time, money and energy. To me, sort of the point that I mentioned even at the very beginning, this is one of the biggest silos of data that exists in the world. And this is such a unique solution. So I got to do a little bit of the bits and bites there. But I think -- for me, I think the direction of databases generally in the cloud is going to be to break down these barriers. You're going to have very little to manage. You're going to have very little extra processing that needs to be done. You're going to consider your data all one entity, and you're just going to pick and choose the value you want to get. You want an operational store here, great. Click and you go. You want to run your query over here, click and you go. And there's very little work to make them all work together. So anyway, you got to a really exciting point for me. I'm sorry, I went too long.
That's great. We started pondering and writing about databases in the cloud about a decade back or so. So it's great to see the excitement. What opportunities do you have for competitive market share gains, displacement of legacy databases? Is that something Microsoft's giving attention to? Because that's a big, big market out there.
Yes. I mean, I think one of the big things we focus on is choice when running. And I think when you look at some of the sort of modern capabilities, sort of the global scale, I look at something like Cosmos DB, it's all built around open source database solutions. So with Cosmos DB, you basically click a button, and you have a fully managed global database built on a whole bunch of open source models that you can go use. It allows you to more easily move from perhaps if you feel sort of a legacy database or sort of feel the weight of that legacy database, you're able to make these migrations to a cloud-based solution more aggressively. I think we're going to see a lot of customers do that as they move through digital transformation as they decide they need a global scale solution and it's hard to manage their existing ones. I think we'll continue to see some of those legacy databases just move as infrastructure. And I think, again, making sure that we're there to support customers on both is going to be the key.
On the earnings call last month, the company talked about $10 million-type transactions for Azure and Microsoft 365. When you speak with customers, how are they thinking about Microsoft being positioned in their cloud road maps? And how strategic is Azure becoming to their road map to the cloud, if you will?
Yes. I mean, again, it sort of depends on the customer's probably the best answer. I mean, I think that for customers where they are looking for a partnership with us, they look fully left to right across our entire portfolio, right? So Azure is, of course, a key component to it, the Azure infrastructure, the sort of the data platform that I've maybe talked ad nauseam about at this point. These are key components to their strategy as they look at modernizing. But the most strategic partnerships that we end up building, which then bring the resources that we have to bear to go support and build and design these types of transformations extend beyond just that, right? They will include Teams modernization. They will include applications built in Azure and exposed in Teams as an example. And they'll frequently include Dynamics and sort of business outcome-based transformation as well. So it's -- look, it's a key component because I think it brings a lot of these pieces together. But the most strategic partnerships that we have are typically inclusive of more than just Azure, is maybe the best way to put it.
Got it. Got it. How competitive is the market? I mean, now you've got 3 big companies, 2 in addition to Microsoft. Is it really the pie becoming larger or Microsoft getting more share of the pie? How do you think about this dynamic, competitive dynamic?
Yes. I mean, I think without necessarily quoting sort of share numbers, I -- look, I do think this movement for digital transformation is pushing many more customers to plan usage and migration to cloud, right? So I do think we are seeing the overall opportunity continue to grow, which is great, right? And I think it's great for customers, too. I am bullish on what I think we're able to do for customers. I'm bullish compared to our competitors. And again, it's sort of -- I don't want to continue to repeat the same point, but I do think it's actually tied very heavily into the fact that it's more than just Azure, right? I think that the -- I feel good head-to-head when it comes to our data platform or our infrastructure platform, obviously. But the places where we really, really compete well is when we're able to paint a picture of their full IT landscape and how the Azure -- excuse me, how Microsoft with Azure can change their end-to-end. And so I think that's where we are really differentiated, and I find our competitors really struggle to land sort of a similar picture because it's much more piecemeal. And so the key components there, obviously, sort of the, as I mentioned, the data into sort of the business outcomes, the collaboration and then security is actually a really big one there where we see sort of the security of Azure combined with the security of sort of the modern work experiences creates a lot of differentiation, distinct value with sort of AAD across the full picture that our competitors struggle to paint a similar picture.
Got it. In the few minutes that we've got left, I just want to get your thoughts on Office 365. What inning are we in the transition from old Office to Office 365 prem? Or maybe the market opportunity has gotten bigger, we should not be thinking about the transition of the old versus new? How would you level set us on that aspect?
Yes. I think there's probably a couple of key points. The first one would be I think sort of Office 365, Microsoft 365, it's really transformed into a collaboration experience, right? And I think that Teams has done really an awesome job of putting these components together, right? There's -- it's no longer a discussion of Word and Excel and PowerPoint. It's a discussion of collaborating in Teams and how all these components come together to enable that experience. And it's not just a sort of a licensing bundle, right? It is actually a customer experience end-to-end. And one of the best examples, I think of this, is we recently announced Viva this last week, which is really sort of taking these components and bringing them all together, so some of the things that came out of Viva directly in Teams, you're able to sort of understand corporate requirements. You're able to understand sort of community changes that are happening in your corporation. You're able to understand your work-life balance using an analytics platform to see what you're doing in e-mail, what you're doing in Word, what you're doing on Teams and how you're spending your time and when you should be taking breaks and so on and so forth. So that type of analytics built in, these are things that customers are just going to start expecting as they look at their collaboration productivity software. It's all one thing, which is productivity, efficiency and collaboration is one. And this is where I think that when I look at the future of Microsoft 365, it's really tied into that Teams experience and all the experiences that surround it. And so I'm pretty bullish on it. I think it's -- I think that part of the transformation is in early inning. I think there's a lot of room for us to continue to innovate, and it's also an area I feel pretty good about our differentiation in sort of having that full platform spectrum.
Got it. There's really only one other company that does this, the collaboration aspect, not the video conferencing, which got acquired by Salesforce.com. Any thoughts on how we should be looking at Microsoft's differentiation with Teams vis-à-vis a Slack or maybe a Zoom or RingCentral? Any thoughts there?
Yes. I mean, I think it's the breadth of sort of connection points, right? When you look at sort of Teams, it is certainly an integration point with Dynamics. If you look at something like our health care cloud, from -- Microsoft health care cloud, sort of the ability to bring sort of a customer patient experience, with the collaboration experience, with the chat experience, right? So there's absolutely opportunity with our business apps. But it goes much beyond that, right? When you think of sort of the integration back with our analytics platform, integration with something like a chat bot or Power Apps, right, these are some unique integration points that there's sort of no single competitor today that has that full breadth of offering from a productivity suite, an e-mail suite and all the way through to the business apps and the analytics underneath. And then maybe the kind of final point there that I think is, again, unique is the security expectations across that full end-to-end, right? We have a real depth in our security product and our security capabilities that allow you to do that from Teams to Dynamics to Azure Analytics with a single security view that customers, again, are expecting. That's sort of an assumed part of this new world, where everything is remote, everything is collaborative, but everything needs to be secure. And this is where I think we stand alone.
Yes. So I know the market likes to look at -- or at least financial markets like to look at the subscriber growth rate, installed base growth, et cetera of Office 365. How much more room is there for adding more subs in the next few years or many years?
Yes. I think -- so there's probably 2 areas to talk about there. I think there's one which is sort of coverage, right? I think that there's the classic sort of Office coverage model was information workers, right? And as you sort of look at this, again, this collaborative app productivity, chat bot experience, I think there's a much broader conversation around frontline workers that really is able to add value, right, a unique value in that frontline worker segment. And then I would also say premium services, right, the sort of ongoing value of increasing services like Viva, like some of the security services, compliance has been one that we've seen pick up that I think continue to add value to the overall suite and give opportunity for sort of upsell momentum as well. So I do think, obviously, there's seats on the planet sort of perspective. But I do think there is opportunity both in more coverage but then also in sort of premium value to be had.
Got it. As you mentioned, frontline worker, I could not help but think that the pandemic has been unusually harsh on the frontline worker, right? As we get through a vaccine, these frontline workers come back. I mean it's got to be a positive for your business because you've been talking about the F1 SKU, what not for quite some time. Do you think that the turn of the frontline worker is a good incremental positive for Microsoft?
Yes, definitely. I mean, look, I would say the frontline worker getting -- being able to get back to work is good for the economy in general. Like it's -- just I think it certainly lifts all boats. So I would -- I think it's a great thing, and obviously -- look, everyone getting the pandemic -- excuse me, everyone getting the vaccine and the pandemic going away, is, I think, really, really key. One of the things that as we look at sort of frontline workers, one of the things that we've seen sort of the opportunities pick up is that those industry-focused solutions, right? The health care solution that I mentioned sort of being able to enable retail-based frontline workers to be able to have a single experience between e-commerce and their storefront. So I do think there's a lot of opportunity there that even goes broader than just Teams in sort of enabling frontline worker experiences. So yes, I think it will end up being a good thing for all of us.
Got it. Curious to get your thoughts, how customers are thinking about their collaboration, communication strategy going forward, especially with vaccines being distributed? Are we going to collaborate less because hopefully, we come out of the pandemic? Or how does that behavior change or not change?
Yes. We've started adopting a phrase in my team of sort of digital first. And what that means to us is even in-person engagements, in-person conversations with customers, we still want to be very digitally led. And so when I think of -- frankly, I look at some of the things that Viva just launched. Even when we get back together, I can barely wait for sort of in-person meetings and sort of in-person engagements. Still being able to take advantage of some of the progression we've made in sort of leading with digital, leading with AI, sort of being able to understand how we spend our time, understand who we spend our time with and leveraging AI services to guide our meetings and to guide our productivity, I don't think that goes away. In fact, I think we actually double down on it, right? So I think in-person will be fantastic, frankly, again, for just the overall mental psyche of the world because I think we all missed the sort of the in-person engagement opportunity. But I don't think it reduces the opportunity of being digitally led in how we engage and how we sell and how we work in factories. Being able to support a remote factory without jumping on a plane is always good. Whether we can't jump on a plane or we can jump on a plane, we'd probably prefer not if we could do it remotely, it saves money. It saves time. It saves time away from family. So I think there's opportunity for digitally led across the board.
Got it. Got it. On the earnings call, Microsoft talked about a percentage point benefit from COVID-related savings to your bottom line. Do you -- when you talk to customers, are they experiencing such savings? And what are they planning to do with these savings? If you have a view on that.
Sorry, savings from?
So Microsoft talked about COVID-related savings for the company's bottom line, right? So when you talk to customers, do they experience such savings just probably because their T&E...
Got it, got it, T&E. Got it. Okay, great. Sorry. Yes. I mean, look, when I talk with customers, I think it's always a balancing act, and it always sort of depends again upon the industry, right? Because I think there's certainly savings from things like operating expenses, travel expenses, et cetera. But I think that the bigger conversation is typically sort of how IT spend is shifting, right? I think sort of -- and I do think that's a really interesting opportunity, sort of IT spend shifting from sort of managing site locations, et cetera, to managing remote capabilities and remote security and sort of remote communications. So I do think -- it's hard for me to say savings or not because every company is different in how they approach it. But shifting in how they're spending their money is absolutely happening and sort of shifting in how they think about what to prioritize. And it again comes back to even my first answer around the digital transformation, right? That shift in actually repivoting money towards taking those steps towards digital transformation is definitely happening. Now whether it's a net negative because their travel expenses were enough to offset or what have you, right, each company to their own. But I think that's definitely a key component.
Got it. Well, on that exciting note, I just want to say a big thank you for this high octane, high energy, high enthusiasm presentation. Really, really enjoyed it, and it's awesome to discover that you actually worked with Bob Muglia back in 2009, and you had a big role to -- in shaping up Azure. And once again, thank you for taking the time to be with us. Really appreciate your commitment to Goldman Sachs.
Thank you, Kash. I really appreciate the time. Yes. It was fun talking with you, and we should talk more about databases. I feel like we -- I feel like there's a lot more to dig in there.
I love databases. While we're finishing up, I just wanted to share with you, you heard the term PaaS and IaaS, right? First, we had SaaS. So my contribution, if there's anything that I've done for the industry is to come up with PaaS and IaaS. It's a true story.
Is that right? Oh my goodness.
So 2007, we -- what do you call this thing? The cloud. Oh, they want to -- Gartner already has this thing called SaaS. What about PaaS? So...
So I have you to blame for this. Okay.
I know. I'm very sorry about that.
Having to explain to a customer the difference between those 2. That was my early days in Azure.
[indiscernible]
Absolutely.
Have a lovely day. Thanks so much, Corey. Bye-bye.
Yes, thank you too. Yes. Bye-bye.
Take care.
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