GDPR Perspectives from Microsoft, Salesforce, and SugarCRM

810px-Flag_of_EuropeIt is less than 36 hours until GDPR becomes the law of the land in the EU Zone.  As the regulation has extra-territorial privacy requirements, non EU companies, even those without a physical presence in the EU, are subject to its requirements with respect to communications with EU citizens and management of their data.

The US has a much weaker set of laws and there is concern that US firms are laggards with respect to compliance.  However, a number of US technology firms have called for adoption of a US GDPR.

On Monday, Microsoft once again reiterated its belief that “privacy is a fundamental human right” and announced that GDPR will be their privacy standard globally.

“As people live more of their lives online and depend more on technology to operate their businesses, engage with friends and family, pursue opportunities, and manage their health and finances, the protection of this right is becoming more important than ever.”

  • Julie Brill, Microsoft Corporate VP & Deputy General Counsel

Companies, therefore, have a “huge responsibility” to protect and safeguard personal data.

Since GDPR was enacted in 2016, Microsoft has dedicated 1,600 engineers towards compliance.  “GDPR compliance is deeply ingrained in the culture at Microsoft and embedded in the processes and practices that are at the heart of how we build and deliver products and services,” said Brill.

She noted, however, that GDPR is a “complex regulatory framework” subject to “ongoing interpretation” by regulators and feedback from customers.  As such, the firm will “determine the steps that we all will need to take to maintain compliance.”

As a provider of corporate infrastructure, Microsoft views GDPR as an opportunity to differentiate itself and assist its customers with compliance on the Microsoft Cloud.  “One of our most important goals is to help businesses become trusted stewards of their customers’ data,” said Brill.  “This is why we offer a robust set of tools and services for GDPR compliance that are backed up by contractual commitments.  For most companies, it will simply be more efficient and less expensive to host their data in the Microsoft Cloud where we can help them protect their customers’ data and maintain GDPR compliance.”

Additional details about Microsoft GDPR compliance can be found in their Trust Center.

Salesforce and SugarCRM have also taken a strong position on GDPR calling for similar legislation in the US.  “What we need is a national privacy law, and that will really not just protect the tech industry; it’s going to protect all the consumers,” said Salesforce CEO Marc Benioff.

This is not a new position for Salesforce.  Back in 2014, Benioff said, “I’m all in favor of consumers having more power and more control over their data. As a consumer, you should have all of the rights. It’s like a cloud Bill of Rights. As a consumer or as an enterprise, you should have the right to be forgotten or to add or take away your data.”

As part of its compliance, the firm named their Senior VP of Global Privacy and Product Legal Lindsey Finch as their new Data Protection Officer.  Finch has been with Salesforce for a decade with previous stints at GE (Privacy Counsel), the Federal Trade Commission, and Homeland Security.

“The official DPO designation is a natural outgrowth of our existing programme. My team and I will continue to partner across the company to foster a culture of privacy – designing, implementing, and ensuring compliance with our global privacy programme, including ensuring that privacy is considered throughout the product development lifecycle,” said Finch. “The top theme I’m hearing is that our customers are using the GDPR as an opportunity to focus on their privacy practices and putting their customers—oftentimes end-consumers—at the center of their businesses. The GDPR is a complex law, but putting the individuals to whom the personal data relates at the forefront, and focusing on their expectations and preferences, is a great starting point for compliance with the GDPR and other privacy laws.”

Finch described Salesforce’s approach to GDPR compliance:

“We started by kicking off a thorough review to ensure compliance across the company. The GDPR is an incredibly rich document—99 articles and 173 recitals across 88 pages! Our Privacy team broke this down into key principles and worked closely with our Technology & Products organization to review our compliance. We found that we were already in a really great place,

Since then, a lot of the work we’ve been doing has been to document how our customers can use our services to comply with some of the key GDPR principles, which we’ve published on our GDPR website. There is no finish line when it comes to GDPR compliance. While Salesforce currently offers the tools for our customers to comply with the GDPR, we will continue to release new innovations that help our customers achieve compliance success.”

Salesforce CMO Simon Mulcahy echoed Benioff and Finch at the Salesforce World Tour event in London last week.  Mulcahy stated that many companies simply view GDPR as a compliance issue and nuisance, not an opportunity to align company interests with customer desires.  “It is a compliance issue, but it’s also a phenomenal opportunity to give your customers what they want. What they want is to know that when they give you their data, you’re looking after it appropriately.”

“Benioff is right that we will need some regulation and I can’t see how we can set two standards–EU and US–so we’ll likely need to adopt what the EU has done or risk chaos.  This also fits well into the narrative of the information utility. GDPR is another driver sending us toward utility formation for the information industry.”

  • Dennis Pombriant, Principal Beagle Research

Larry Augustin, CEO of SugarCRM noted that firms have been lax in their privacy and cyber security processes saying that self-regulation has proven to be insufficient with “too many incidents.”

“Data privacy issues are not going to go away. People are thinking a lot here now about GDPR, because Facebook, Twitter, and all of these issues keep coming. And Experian in the US, about managing personal information related to credit card data… there’s just a constant barrage of issues around data privacy and personal information,” continued Augustin.  “Everyone has to address it, whether it’s in the context of GDPR or the next thing that’s going to come along. There is definitely a heightened awareness and interest.”

SugarCRM has built a data privacy manager into its CRM as a “command center” for the data privacy officer.

In my discussions with clients. they all admit to the regulations being a muddle that initially adds risk to their business models.  The penalties are draconian, but the compliance requirements are ambiguous, particularly for B2B firms.  As such, we are likely to be hearing about issues concerning GDPR compliance requirements over the next few years.

E-Mail Guessing Strategies Work Poorly

I’ve long suspected that email guessing strategies based upon corporate email templates are risky.  If the hit rate is low, you can quickly undermine your sender score and hurt your firm’s ability to communicate with customers and prospects.

Almost every sales rep does it as a quick workaround.  Hell, I’ve done it.  But, as a strategy for building marketing datasets, it is a dead end.  When sales reps do it, there is a high probability that their well drafted email will bounce.  When marketing does it, they will kill their email deliverability.

Two companies provide evidence to the failure of this strategy — DiscoverOrg and SalesLoft.

SalesLoft offered the Prospector service in 2014. It was a gerry-rigged Google search of LinkedIn that employed an email guessing strategy. The service was discontinued when CEO Kyle Porter decided to focus on Sales Engagement.
SalesLoft offered the Prospector service in 2014. It was a jerry-rigged Google search of LinkedIn that employed an email guessing strategy. The service was discontinued when CEO Kyle Porter decided to focus on Sales Engagement.

SalesLoft began as a LinkedIn scraping service that employed Google to build lists and then utilized email guessing to enrich the lists with dubious quality emails.  SalesLoft Prospector grew into a multi-million dollar business, but CEO Kyle Porter saw the business as unsustainable.   Instead, Porter used revenues from Prospector as a financial bridge for building out a sales engagement Cadence service which has grown rapidly.  Porter describes their service as “sincerity at scale.”

Yesterday, they announced the acquisition of partner SalesNinja which provides integrated meeting analytics for their sales engagement platform.   The tool transcribes and tags meetings for sales coaching, new hire training, and meeting note searching.  The goal is to improve sales efficiency and efficacy while identifying best practices.  Instead of dubious lists, the firm is looking to build quality conversations between sales and prospects.

SalesLoft’s mission is to “enable salespeople to sell with true intent and sincerity,” said Porter several years ago.  “The concept of getting a good prospect list and pounding it to death is old, trite and has become a terrible strategy and drag on our customer’s brands. We have never intended to participate in that process. SalesLoft Cadence is a different process, creates a different relationship, much different results and is executed by professionals with professional solutions.”

DiscoverOrg was never tempted by such strategies and employs a large editorial team to research and maintain executive profiles.  In a recent test of 2,700 editorially gathered emails that were also SMTP verified, DiscoverOrg found that basic template guessing was only 62.4% accurate.  When nickname substitution was employed, the rate only rose to 66%.  When they analyzed the incorrect guesses, they came up with multiple reasons for failure:

  • Large companies have multiple email formulas
  • Brands and subsidiaries create complications
  • Subdomains are becoming more popular in email addresses
  • Some companies use multiple email domains for different roles
  • Nicknames are very common
  • Middle initials and middle names
  • Duplicate names
  • Foreign names
  • Secretive email formulas

“A lot of data providers offer ‘confidence levels’ or likelihoods that a specific email is good,” blogged DiscoverOrg SVP of Data and Research Derek Smith.  “They’re just peddling their own guesses. Anybody can pass along their best guess at an email. Real sales intelligence gives you accurate, actionable data that won’t result in a bounce of your carefully crafted prospecting message.”

In the end, prospecting shortcuts are problematic.  The best sales and marketing professionals employ accurate data and insights for their messaging.  Furthermore, in the era of GDPR (three days from now), you can’t have explicit consent to communicate with an EU citizen when you are guessing at how to contact her.


DiscoverOrg Study

 

 

HG Data: CEO Interviews (Part III)

 

HG Data Technographics may be used for building AppExchange Workflows. For example, separate workflows can be employed for prospects using competitor or complementary platforms.
HG Data Technographics may be used for building AppExchange Workflows. For example, separate workflows can be employed for prospects using competitor or complementary platforms.

I sat down with Craig Harris and Elizabeth Cholawsky of HG Data last month. Elizabeth had joined HG Data as their new CEO eight days earlier with Craig shifting from CEO to R&D Leader and Chairman. We discussed the transition, partner management, product planning, and the entry into other information verticals. The interview has been edited for length and will be published over the next few days.  [Part 1; Part II]


Michael: As you continue to build out the IT vertical, do you see yourself beginning to compete against your partners, and how do you anticipate that playing out in the coming years?

Craig: I don’t see that being an issue. If you actually map out our partner ecosystem, what you’re going to find is there are about 12 to 15 different applications of data that these partners deliver. There are some companies that try to be a Swiss Army knife – shallow amongst lots of different applications. Most of our partners are really domain experts in a focus area.

Look at where we are anchored currently, HG Data for Salesforce.  Many of our partners are also inside the Salesforce ecosystem. We don’t compete with our partners that have managed applications, even our partners that have Lightning Data apps.  We are still solving different types of problems with our Salesforce applications.

Our focus right now is really on the systems of record. There are a few other CRM systems that we have our eyes on as well as marketing automation. We are looking for a way where we can be embedded in the systems of record and be synergistic with partners as opposed to competing with them.

Michael: When you look at some of your key partners like DiscoverOrg or TechTarget, they built out other content functionality that you don’t have. It seems like you will not be looking to build those in the next two to five years. When you have those shallower applications, they are just licensing technographics and putting it in with your basic prospecting. I could see those less inventive platforms becoming more competitive with you as you build out some of your functionality there.

Elizabeth: There is a complementary strategy consisting of a really strong partnership and channel strategy, combined with still going the route of allowing our data to be productized through leading systems that people use. There will be conflict with some. That’s just the competitive situation that’s been endemic to the technology industry broadly, forever.

The issues are solvable when you have a good strategy laid down. You go into the partner relationships explaining that strategy and where you want to play and why you want to do that. To me, that comes back to the customers, their use case and how they want to consume the data that we’ve got.

It’s a big expanding market out there. I think there is a lot of room for really high growth, with both vital channel partners, as well as doing what we’ve embarked on with the systems of record.

Michael: What size and growth metrics are you comfortable disclosing?

Craig: Not much. We’re 57 employees. As I alluded to earlier, we have an eight-figure run rate, so that leads to a pretty big range. We’re not disclosing [revenue] publicly. I will say, anecdotally, we had a great year of revenue growth.

Michael: What is your split today between content licensing and direct sales? Do you see that shifting much going forward?

Craig: Probably close to the 50-50 mark.

Michael: Probably wasn’t 50-50 two years ago.  That’s a significant gain on the direct sales side then?

Craig: Yes. HG Data for Salesforce has been a very nice contribution to that as has our display advertising and HG Data Audience product line. The end user, they don’t necessarily want to go log in to ten more systems when they’re trying to solve a very specific problem. Who are my best prospects? Who should I talk to? What types of conversations should I have and what types of key strategic insights can I use and when? For us, this is all about having our data at the right place at the right time for the right person – to help them solve the thing that they care about which is: Who’s my next customer?

We are not going to do this alone. We are going to need partners for that journey.

HG Data: CEO Interviews (Part II)

HG DAta Harris

I sat down with Craig Harris and Elizabeth Cholawsky of HG Data last month. Elizabeth had joined HG Data as their new CEO eight days earlier with Craig shifting from CEO to R&D Leader and Chairman. We discussed the transition, partner management, product planning, and the entry into other information verticals. The interview has been edited for length and will be published over the next few days.  [Part 1]


Michael: Craig, let’s talk about your new role and the future of HG Data.

Craig: Over time we’ve ingested and continue to ingest billions of company documents. These documents don’t just cover IT or technographics. They span every geography, every vertical, every category.  Technographics is really just scratching at the surface. There are so many more insights within our corpus, and we’ve already built the tools and have the machinery to extract them. That’s where I want to spend my time. That’s where I want to focus.

That means a couple of things. It means going much deeper in this phase that we’re already in. Going beyond just company X is using product Y. There’s so much more context and insight and actionability that we can mine around the technographics that we are already selling to the market. There are other opportunities beyond technographics and we’re already monetizing that in the digital display part of our business, which is growing really fast.

I think this is just a perfect partnership between Elizabeth and myself. I get to go back to what I love the most which is the R&D. We’ve got a real pro here at home that can help us scale to the next revenue milestones and beyond.

Michael: The other industry that you’ve entered is healthcare. You partnered with `.

Craig: Yes, that was a couple of years ago. Our thesis is, we’ve got this massive corpus of information, can we extract information beyond technographics? Doing our deep dive into healthcare, of course, we started with the specialized software and hardware products that are used within healthcare organizations.

Quickly from there it became looking at equipment that you used in the operating room or how many beds are at certain healthcare facilities. That was very much a successful test of our ability to move into other verticals. That quickly became a very meaningful business for us. We’ve already proven that we can replicate what we’ve done in the technographic space.

More importantly, beyond technographics, there’s so much opportunity in the space that we’re currently in. We launched our HG Data for Salesforce product in November, so this is really one of our first forays into going and putting more of an experience around the data. This is an area where having someone with Elizabeth’s experience just puts us in a great position to explore those avenues.

Michael: Lightning Data is just an application – Account data maintenance within the AppExchange. It’s a small subset of the broader scope of applications in the AppExchange.

Elizabeth: Right. Yes. We’re working closely with them and talking about co-marketing opportunities to get a little more visibility around the Lightning Data app.

Michael: You have some other products you also launched around marketing analytics last year?

Craig: Well, so we’ve got the HG Data Platform. I wouldn’t really call it a product but an introductory way to discover the different data sets that we have available. It also has light analytics in terms of growth of those products by geography and other types of firmographics.

But really the main product launched is HG Data for Salesforce. That’s our premium offering inside Salesforce. We also have a demo version called HG Data for Salesforce Lite.  We just launched that.

HG Data Focus [Chrome extension] is a tool used by thousands of sales reps and BDRs and marketing folks. That’s been a wonderful way to experience our data.

The other product launch was HG Data Audience. It’s our digital display advertising offering where we’ve worked with third-parties to get our data put into the systems or the workflows for building both syndicated audiences as well as custom audiences.

That product is growing really fast.  It’s branded and available inside of Oracle Data Cloud, LiveRamp Data Store, DoubleClick Bid Manager and many others

Michael: Craig, going out five years, where do you see the company on the product side?

Craig: With technographics, if you look at some of the partners that we have within the HG ecosystem, we’ve identified at least a couple dozen different use cases and applications for our data. That’s just looking at the sales and marketing ecosystem. The enormity of what could be powered by HG, if we choose to build that ourselves for end users inside of their workflows, is exciting. Or, we may decide in certain scenarios that there are other companies that are just so good at that particular delivery of service to customers that we are more impactful powering that application It just makes a lot more sense to leverage partners in certain circumstances.

What I see happening over the next two to five years starts with technographics. We are going to choose some of those areas of application and we are going to build and power really wonderful experiences with our data directly for end users. And with many other applications for sales and marketing, if not the majority of other applications, we are going to continue working very closely with the wonderful partners that we have been working with for so many years. Over the two to five-year time-frame, I believe that we have the opportunity to go and replicate that same experience in a multitude of other vertical markets.

That’s where I’ll be spending a lot of my time just exploring which other verticals and markets we can go into and build unique data sets. Currently, I believe that we deliver the holy grail of data within the software and hardware space. Part of the holy grail of data is technographics.  As we evaluate moves beyond healthcare and we move into manufacturing or transportation or any number of verticals, the definition of the holy grail of data becomes very different. That’s where I’m going to be spending the better part of the next several years working as Elizabeth helps provide some guidance. We are going to be very deliberate with the next markets that we choose to move into.

Michael: What sort of time-frame do you see yourself entering these additional verticals?

Craig: Right now, I think the focus and the priority is optimizing the areas that we are already in, so there’s a lot more work to do in technographics and healthcare before we start jumping in those multiple other verticals.

My vision for HG Data five years from now is that HG Data has become the de facto leader in the technographic space – not just building the data and surfacing the data, but in putting it to work for our customers.  At the end of the day our customers don’t care about technographics. They care about knowing who their next customer is going to be or how they are going to retain and grow their existing customers. Five years from now I hope that HG Data will be informing this in the IT vertical as well as four or five other vertical markets.


Part III covers partnership strategy and company performance metrics.

HG Data: CEO Interviews

HG Data Cholawsky

I sat down with Craig Harris and Elizabeth Cholawsky of HG Data last month. Elizabeth had joined HG Data as their new CEO eight days earlier with Craig shifting from CEO to R&D Leader and Chairman. We discussed the transition, partner management, product planning, and the entry into other information verticals. The interview has been edited for length and will be published over the next few days.


Michael: Elizabeth, can you provide a quick overview of your history and experience and why you are the best person to be running HG Data?

Elizabeth: I’ve been working with subscription-based products, SaaS products, and products in the cloud since they were first invented almost 20 years ago.

Over the last 20 years, I’ve worked as VP of marketing at a couple of companies which you may not remember. Commission Junction was acquired by ValueClick, and I was VP of marketing there.

In 2007, I moved on to Citrix and the GoTo products, as GM.  It was a great experience because we were at the early stages of getting GoToMeeting out to market. When we got Citrix big enough, we divided into lines of business to streamline the decision making.

That was about a $200 million business when I left it in 2014.

I took those executive learnings and was recruited to lead Support.com. I went there in mid-2014 and by the beginning of the following year, we had a product to market. By the end of that year, we were at about $1.2 million ARR. Pretty quick ramp for that product in the SaaS market.

Michael: What else will help HG Data grow rapidly in the coming years?

Elizabeth: I have always been attuned to the discipline of product and product development. The core of all good technology companies is its product. My affinity is for that as well as the details, and I have been immersed in both – really having a sharp eye for the product / market fit.

Michael: Craig, you made a decision to step back from running the company day-to-day, but it sounds like you’re taking a more technical role with the organization as well as continuing as the Chairman.

Craig: We closed our Series B round about two years ago and, after we closed, I had a great chat with our new investors.  I dropped a bomb on them and said, “Hey, when would be a great time for me to go and really have my dream job?” The same thing from which HG Data was founded which is R&D. That’s always been my love, that’s always been my passion. That was what got me to start my first company NOZA and, when NOZA was acquired, it was the R&D and the pursuit of solving very challenging data problems that led me and my co-founders to start HG [in 2010]. It just what I love and that’s what I find myself doing on the weekends.

I asked our new investors, “Hey, thanks so much for wiring us $12 million. At what point do you think will be a good time to talk about hiring a CEO to get it to really scale?” Jon Seeber of Updata Partners said, “Hey, once you get to an eight-figure run rate, we’ll talk about it.” Well, it didn’t take that long until we were at an eight-figure run rate so this has been in the works for some time now. We just wanted to find the perfect fit. Product management has never been the thing that HG Data has led with. We’ve always led with the Holy Grail [HG] of data.

We put together a group of advisory product people a year and a half ago. We were brainstorming, trying to take that data and put it to work inside of our customers’ workflows. That was the next step for us and that’s not something that I have a lot of experience with. For me, it also wasn’t something where I’d just go hire a VP of Product and then, voila, we’re going to be able to become that type of organization. For us, it was something that the board and I wanted to have just in the DNA of our leadership and so that’s why literally after seeing a couple of hundred candidates, Elizabeth was the perfect choice for us and really a no-brainer

Elizabeth: I feel like I’m in the most fortunate situation. I just feel like that’s a hugely fortunate thing for a new CEO to have [the founder] as a partner.  [When] the founder walks away, you lose a true guiding light of the company. That’s not going to be us.


Continue to Part II

InsideView Apex: Determine TAM, ICP, and Look-a-Likes

InsideView Apex TAM Visualization
InsideView Apex TAM Visualization

Sales and marketing intelligence vendor InsideView launched their Apex “go-to-market decision engine.”  The new product combines InsideView and CRM data to assist with analyzing new market entry, identifying a firm’s Ideal Customer Profile (ICP), and assessing its Total Addressable Market (TAM).

“Smart B2B companies today are asking these questions: ‘Who are my best customers?’, ‘What are the new geographies and industries where I can expand?’, and ‘Are we going after the right customers and the right revenue?’,” said InsideView CEO Umberto Milletti. “We realized we had the technology, expertise, and data to help companies answer these questions quickly and with confidence so they never miss an opportunity. Business strategy shouldn’t be based on gut and guessing. And it shouldn’t require cumbersome data analysis. InsideView Apex uses cutting-edge technology and the best possible data so you can make the right decisions for your business.”

Go to market planning features include an ICP wizard, new/adjacent visualization tools with “what if” targeting analysis, TAM and market penetration analysis, new account and lead identification, and exporting of new ABM prospects to CRMs and MAPs.

“Revenue teams can use InsideView Apex to visualize performance against target segments in real time to optimize for success and focus resources on the targets with highest potential,” said Joe Andrews, VP of Product and Solution Marketing.  “Marketing can see performance indicators at each stage of the funnel as leads convert to opportunities and won deals. Sales ops can identify where leads or opportunities may be getting stuck to course correct in real time.”

The Apex account score is based on an AI algorithm which correlates attributes from deep company profiles that are proprietary to the InsideView Platform.  The account score is maintained and updated dynamically within Apex as customer ICP lists change. However, the account score is not currently pushed to CRM or InsideView for Sales.

If customers have also licensed InsideView Sales and Enrich products, ABM accounts are tagged.

Other visualization tools include a five-quarter historical view; market segmentation of leads, opportunities, and wins; and account whitespace (market penetration) analytics.

InsideView Apex Funnel Analysis Dashboard
InsideView Apex Funnel Analysis Dashboard

Apex integrates with Salesforce, MS Dynamics, Eloqua (Oracle Marketing), and Marketo.

Apex is licensed as an annual subscription and is priced in tiers based on company size which serves as a proxy for the number of market segments being targeted.

Apex is not the first tool in this category (e.g. D&B DataVision and DiscoverOrg AccountView), but it is emblematic of the expansion of sales intelligence vendors into market intelligence and strategic planning. When I started GZ Consulting six years ago, the sales intelligence firms were wary of entering the marketing realm, but the top sales intelligence firms are now offering ICP/TAM tools, marketing automation connectors, segmentation analysis, look-a-like prospecting, and data enrichment tools.  This shift goes hand-in-hand with the blurring of the lines between sales and marketing.  For example, sales engagement platforms provide cadence, analytics, and email marketing tools for sales reps alongside dialers and sales coaching.  We are also seeing visitor intelligence and intent data being displayed within CRMs.

“Most B2B companies perform go-to-market planning and analysis in product silos and often fail to involve sales and marketing teams early in the process – those who must execute the strategy.  Planning is a slow, manual process, based on limited information.  Most firms have few ways to measure market performance reliably against strategy, making it nearly impossible to course correct in real time. It’s time to change this.”

  • Forrester Principal Analyst Laura Ramos

A 2018 InsideView survey of 500 American sales and marketing professionals found that TAM measurement was non-existent (25%) or ad hoc (28%) at surveyed organizations.  Only 23% of respondents work at firms that regularly evaluate Target Demand.  The remaining 24% of firms perform Target Demand analysis annually.

“All of the efficient and creative demand generation in the world will be wasted if the targeting is off,” wrote the firm in their 2018 Sales and Marketing Alignment report.  “The shotgun approach to sales and marketing no longer works. There’s too much noise in the market and in prospects’ inboxes. The only way to stand out is to know who you’re targeting, and why and when they buy, and it can’t be done effectively unless both sales and marketing buy in it. Developing an ideal customer profile (ICP) and using it to determine your total addressable market (TAM) will help sales and marketing know exactly who to target, why they need your products, and when they need them.”

Satya Nadella and “Trust in Technology”

Microsoft CEO Satya Nadella digressed from standard earnings call topics two weeks ago to discuss the importance of ethics, privacy, and cybersecurity.  While he did not provide a specific reason for the digression, the Facebook hearings and impending GDPR implementation were likely motivators.

Nadella noted that the intelligent cloud and intelligent edge are “tremendous opportunities” for Microsoft customers, but that it is critical that both Microsoft and its customers “ensure trust in technology” across three dimensions: privacy, cybersecurity, and ethics. Nadella argued that “privacy is a fundamental human right” and that the firm has implemented an “end-to-end privacy architecture” which is GDPR compliant.

“For customers, we will provide robust tools backed by our contractual commitments to help them comply with GDPR,” said Nadella. “In fact, for most customers it will be more effective and less costly to host their data in Microsoft’s GDPR-compliant cloud than to develop and maintain GDPR compliance tools themselves.”

With respect to cybersecurity, the company spearheaded a coalition of 34 global tech and security companies for the Cybersecurity Tech Accord, “an important first step by the industry to help create a safer and more secure online environment for everyone.”

Nadella also announced the establishment of an AI and Ethics in Engineering and Research Committee at Microsoft “to ensure we always advance AI in an ethical and responsible way to benefit our customers and the broader society. This includes new investments in technology to detect and address bias in AI systems. Microsoft stands for trust, and this will continue to be a differentiating focus for us moving forward.”

Up until recently, information technology and social media have been viewed as social goods with few drawbacks, but now that we are all tied into the social communications fabric, we are beginning to worry about the dark side of such connectivity whether it be job losses through automation, the stripping away of privacy, the vulnerability of our networks to hacks, or the undermining of objective truth and democratic systems.

One step towards addressing these problems is the GDPR Chief Privacy Officer requirement with its focus on privacy and cybersecurity.  At most companies, this role is likely to be one of compliance, not ethics or broader social questions.  At a few, however, this role may grow beyond mere compliance and begin to address the broader social and economic issues posed by information technology.