Scott: Sure. As you would imagine, we've developed a rather robust process for this, so we and the [product] groups negotiate what we call "ship criteria," and this can range from performance indicators, quality indicators, all kinds of different things. We've done the same thing with our cloud services. A lot of people don't know, but I run all of Microsoft's mail on the exact same servers that we sell customers.
I am another customer just like any of our other big customers would be. The only difference between me and the other customers is I'm always running the beta version or the next set of things that they're going to release into the service. And we kind of educate and socialize the fact with our employees that this is an important part of your role as an employee here at Microsoft: to help us find bugs and correct things that would not deliver a suitable customer experience. In the tradition that we've had with other products, we do the same thing with the cloud.
Knorr: I see.
Scott: That gets everybody's [skin in] the game in a little different way than if it's somebody else's job.
Knorr: So you're a consumer of the cloud services that are launching. Are you also using Office 365 now?
Scott: We are on a version of this that will become Office 365. We're dog-fooding that as we speak. But let me be clear -- I don't have the whole company on it yet. It works the way I just explained it: We take a small group and then we go big as the product goes further and further along in its development cycle.
Knorr: So is the end goal then to have everybody up and using, say, the enterprise version with Office Professional Plus by some certain date? Do you have a schedule for that?
Scott: We do and I don't remember it off the top of my head. Now, what we're going to do in the case of Office 365 is we think there's a whole bunch of hybrid scenarios where companies are going to want hosted Exchange for some [of the] company perhaps or use the Office 365 service for some other parts of the company. We also support mixed modes like that where we'll include the next version of the server product. I said, "Thanks a lot guys, my world just got doubly hard," when we started offering services. But those are real customer scenarios, as it turns out, and something that we should do.
Knorr: Are you doing something similar with Azure?
Scott: Yep, absolutely. One of the biggest enterprise, Tier-1, can't-break apps in Microsoft is the set of applications that supports our licensing portfolio. I made the commitment over a year ago to move that whole platform to Azure, so we're right in the middle of doing that work right now.
Knorr: As a CIO who also has a bottom line to meet, you have to worry about costs and efficiency. Are you actually seeing some measurable efficiency in terms of your own costs with cloud deployments? Are you seeing some economies of scale there?
Scott: Yeah. It's come about in two ways. One is that, for all of the critical production environments that we have, there's a bunch of upstream stuff we call the development environment and the test environment and the pre-production environment. And historically we've tended to size those environments to mirror what we expect to need in production because that's the best way to test these sorts of big hairy applications.
But the reality is that much of that upstream stuff just sits there idling and underutilized much of the time, particularly when you're not in a heavy development cycle. Sometimes it gets reused or repurposed, and certainly virtualization helped us get some more efficiency. But with the cloud, we're seeing that we can take that to the next level. That has been a big part of the economic story, even if we don't, at the end of the day, always get huge benefits in the production environment.