‘Israeli economy is so strong, worth investing in,’ says Microsoft VP

“Israel is an important creator of technology,” noted Ulrich Homann, a Corporate Vice President in the Cloud and AI business at Microsoft.

By Sophie Shulman, Calcalist

“Israel earned the nickname ‘Startup Nation’ and I’m always pleased to discover what’s new in the Israeli startup scene, and how Microsoft’s cloud operations can help startups develop and grow faster,” Ulrich Homann, a Corporate Vice President in the Cloud and AI business at Microsoft, told Calcalist in an interview during his recent visit to the country.

Homann, who works closely with Scott Guthrie, who serves as Microsoft’s Executive Vice President of the Cloud and AI group, arrived in Israel to hold a series of meetings with local startups that sparked his interest. Homann has been working at Microsoft for 30 years.

“I began working there before we launched our first Windows operating system. When I joined, the program was on the horizon but wasn’t being sold yet. I worked with all of Microsoft’s current and former CEOs: I really loved Bill (Gates), Steve (Ballmer) was interesting, but maybe not everyone’s cup of tea. And Satya (Nadella) was everyone’s favorite. He’s also eloquent, considerate, his empathy is genuine, and of course, he’s super smart.”

What types of startups interest Microsoft in terms of the cloud?

“I devote plenty of time to meeting with startups in Israel that interest me in three different aspects. The first is whether these startups are capable of growing rapidly through their cloud infrastructure. The second is spotting new developments that Microsoft’s customers can also benefit from. We also love to connect our customers with startups to speed up their growth and locate new customers too.”

Microsoft is continuing to invest in Israel in several scopes, despite the fact that it didn’t win the State of Israel’s Nimbus tender to develop the government’s cloud infrastructure.

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“I am not familiar with the details of that decision, but it doesn’t affect our decision to invest in Israel. We aren’t only investing in startups, but also in financial entities and other large companies. The Israeli economy justifies our investments, and soon we’ll open up our very own data center. It has nothing to do with our expectations to win the Nimbus tender. Manufacturing is also very important, and we view Israel as an important manufacturer; not just of technology. I know what the return on our investments is in the short term, but I also know that in the long run they’ll pay off, since the Israeli economy is so strong that it’s worth investing here.

“There’s always a risk that there will be a slowdown, but now we’re seeing the opposite happen too. The pandemic exposed us to how critical cloud capabilities are both in terms of competition but also how important it is to have a cloud infrastructure. The transition to the cloud in some industries is still slow, but it hasn’t stopped. Most companies see the cloud as something that ensures stability in any given situation while also ensuring flexibility. If I don’t need physical infrastructure anymore – just like what happened to some companies once the pandemic broke out – then why should I pay for it?”

So you believe that cloud infrastructure will continue to grow?

“It seems that way. We need to be prepared for the opportunity but also for a crisis. What I’ve been seeing now is the growing need to innovate. Many companies understand that their business processes are outdated. For example, a bank in Poland that works with us completely threw out its mainframe infrastructure and transitioned entirely to the cloud, since it’s much cheaper and also enables more innovation through its artificial intelligence-based services.”

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What have been some exciting new developments in the cloud lately?

“More than we can count, so we’ll focus only on the big things. Cloud technology is our asset in every field and in every sector. We operate 200 data centers in 65 different locations around the world, because we believe that our customers shouldn’t have to worry about their capabilities. I believe that the ability to reach anywhere is very important. Now, many customers prefer having their own home-based cloud system, but we don’t view this as a threat since some things are better carried out within a broader cloud system, and some by customers themselves. In some cases, it’s also cheaper.”

“Microsoft always believed in the combination of both options, and we’ve never said that the world will be based on the cloud alone. There are several security issues when creating such systems, such as in the healthcare system which requires customer-based computing, including analytics. That’s why we’ll continue to invest here and also in our multiple cloud capabilities, or in other words in different types of clouds. If you’re a big customer that works with Azure, IBM, and Amazon, how will you know where each type of data is located?

“That’s why we are developing more technologies that will, for example, allow us to scan metadata in any type of cloud and connect everything so that customers can manage all of their data in one place. Also in terms of security, it allows us to easily scan all types of a customer’s cloud infrastructure, even if it isn’t a Microsoft cloud-based system.”

‘New opportunities for Israeli startups’

“When it comes to analytics, there has been a sharp rise in the use of artificial intelligence, and there has also been a transition from using a lone model that can only decipher text and not images to incorporating a more complex model that combines text with speech,” he continued.

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“Customers can build their own capabilities like (Amazon’s) Alexa or (Apple’s) Siri, and it’s a very interesting trend. Another trend in artificial intelligence is using big complex models that process different data sets. For example, additional uses would be having a system generate automatic email responses in Outlook. We support 120 different languages, and I, for example, also use the German language setting and know that it works well in Hebrew too.

“The last and most important trend is how a machine can take a language and turn it into code. We’ve built it for (software developer) GitHub using a solution we call Copilot, and it enables them to skip the boring and simple parts of programming and focus instead on the parts that really require creativity and unique thinking.

“We’re also investing a lot of time in understanding how our competitors work, but our main focus is on our customers. They tell us: ‘We love you guys, but we want you to expand parts of your platform, such as Azure, Microsoft 365, and GitHub. We want all of our products to be fully integrated.’ Another effort that has borne fruit is our focus on certain sectors such as finance or health. There are new opportunities there for Israeli startups, since once we launch our cloud services to financial bodies and startups possess a unique technology that can integrate well with our own, we can better incorporate their technology into our systems.”