DSEI Maritime Strategic Conference 2019

The following is the full script from a presentation made on Monday, 9 September 2019 at DSEI, London. It does not include the demonstration shown to the audience.

I was asked today to talk about the military and market advantage available from data and technology. However, I’m not going to talk about that subject. Instead, I am going to show that data and technology IS the market or military and that it is how you THINK that makes the advantage.

50 billion connected devices are going to come online by 2030. Population estimates for the same time are 8.5bn so six times devices per person. This seems a low estimate, to me, and I believe that we will hit that figure much sooner, probably by 2025.

Those devices will be collecting, processing, sharing and analyzing data across the globe. That brings the second figure in front of you into focus.

90 percent of the data in the world today was generated in the last two years. Of that, 75% is never actually read – from blogs to how many times you swipe into the underground, the data that we are building is not being managed. It is not being exploited. It is simply being created and then shelved.

In Defence, the analysis figure for collected data is over 95% - only 5% of information collected is analysed and only 1% of data is analysed in near real time or real time. We are simply producing more data from more devices yet we are not using that technology or data to empower people or organisations.

Which is where Microsoft is using its mission to make a difference. Our mission is to empower every person and organization on the planet to achieve more.

We make small businesses more productive, multinationals more competitive, governments more efficient, and improve outcomes using data and technology. Collectively, we can impact the 7 billion people on the planet through the power of technology.

Our world view is that we are living in the era of the intelligent cloud and intelligent edge. It’s being driven by rapid advances in three underlying technologies:

1. First, computing is becoming ubiquitous and distributed – with the ability to adapt to a wide range of inputs, whether that is touch, speech, vision or gesture.

2. Second, AI is becoming infused into every experience, mediating our interactions and distilling knowledge from everything around us. Defence still sees AI as 5 years away. In Microsoft, we know that it was 5 years ago and defence has to catch up.

3. And, third the interaction model we have with computers and computing is no longer device-first, it’s human-first and includes all the devices in our lives. People are able to engage with data and technology where they need it, when they need and to use it in ways that empower them real time. They no longer need to head back into an office, log onto multiple systems using multiple passwords in order to make a difference. They can make a difference using their phones, watches, visors on Hololens. Data and technology, today, is ubiquitous.

Data and technology today has also moved out of the technology and IT sector. As a percentage of world GDP, tech spend will reach 10 percent by 2030, up from 5 percent today. That’s a 14 trillion dollar opportunity. But the even bigger opportunity is that other 90 percent. Because that 90 percent will also be impacted by digital technology.

Hiring for software engineers is growing at a rate 11% faster outside the tech industry than within the tech industry, according to LinkedIn data. The number of software engineers is growing at 3X the rate of mechanical engineers.

Last week, someone asked me how many Royal Signals Soldiers would need to be able to code in 2025 – I asked why would anyone not be able to code in 2025 and why are you assuming that it will be a minority? Today every company is a digital company, and every organization will need tech intensity to compete and grow.

So how are we seeing successful companies grow and be empowered in a world of data and technology?

We use a concept of Tech Intensity, or for military users, Technology Tempo. This is the speed that a person or organization can make an impact relative to their competition or adversary.

Tech Intensity = (Tech Adoption x Tech Capability) ^ Trust

It’s a simple formula, but it’s critical when we think about what we hope to achieve.

In Defence, we often look at the second part, Tech Capability, and focus our effort, time and money on buying the latest, best bit of technology. The black box that makes things better.

Instead, we need to concentrate more on the first part, Tech Adoption, and spend time and resource deciding how we think digital, how we use digital and how we acquire digital. An organization with poor, slow processes that buys the latest and best software or hardware to accelerate delivery will just have faster poor, slow processes. We all need to think digitally across our businesses and organisations.

The third part of this equation is trust – both trust in technology and trust in their mission and business model. None of this is possible without trust. There are two aspects to this …

1. First, trust in business model and mission. At a time when digital technology is transforming every industry and every part of our daily life and work, when we are becoming increasingly disrupted by data and technology, we need to build trust in what we are doing. As leaders, in this room, we need to have teams that trust and believe in what they are doing and how they are doing it.

2. Second, instilling trust in technology. It’s why we believe privacy is a fundamental human right. It’s why we have an end to end cybersecurity approach to protect our customers. And, it’s why we believe in responsible AI, and ask the tough questions, like not just what computers can do but what they should do.

We need to deliver trust in technology, as we heard this morning from other speakers, so that it is reliable and delivers in the most demanding situations.

Building this trust requires changing our cultures. For military users, the purpose and utility of missions is clear although we sometimes reserve missions for military operations rather than changing culture. Missions and purpose drive culture.

Satya Nadella, Microsoft’s CEO, said, “As a culture, we are moving from a group of people who know it all to a group of people who want to learn it all. This is the only way we’ll make progress toward our mission to empower every person and every organization on the planet to achieve more.”

Organizations are starting to understand that while technology is important, alongside customers, their employees are at the centre of any transformation. If people lack the right mindset to change and the current organizational practices are flawed, digital transformation will simply magnify those flaws. CIOs play a leading role in guiding CEOs to digital business, however managers and employees will need to navigate the digital frontier together, which requires a new set of leadership skills. Management’s challenge is to figure out how to capture the benefits of digitization while minimizing the costs – and making sure those costs are shared and not borne disproportionately by one group.

We should be looking at new military doctrine not around how we fight campaigns or conduct battle group attacks. We need a new doctrine for digital thinking in defence across strategy, through acquisition, and down to individual people. All of our business needs to start by thinking digital.

Harvard Business Review reported this year that 87% of senior business leaders identify digitalization as now a priority and in many cases is a do-or-die imperative.

One of IDC’s digital transformation predictions for 2019 is that by 2020, at least 55% of organizations will be digitally determined, transforming markets and re-imagining the future through new business models and digitally enabled products and services.

In a digital business transformation context, all these aspects – business functions, processes, assets, models, and activities – are interconnected. This is an essential aspect of digital transformation: the interdependency and inter-connectedness of everything. Ultimately, success in the digital age lies not in the efficiency of technology or collecting data but in the dexterity and adaptability of the people who wield it. Digital is a defence-wide strategic priority – and there's much more work to be done.

So what is the market or military advantage of data and technology? It is simply that data and technology allow you stay in the market and remain in the fight. Your peers and adversaries also have access to the same data and technology. Advantage, then, is obtained by how you think and use this opportunity. That is why we need to start thinking digital to gain advantage.