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How much will the Visual Studio 2012 launch raise the GDP?

Satya Nadella

Satya Nadella, President, Server and Tools Business, Microsoft

“How much will the Visual Studio 2012 launch raise the GDP?” That’s the question I asked — referring to a headline speculating that fourth-quarter iPhone sales could raise the GDP by half a percentage point — of Satya Nadella, president of the Servers and Tools Business for Microsoft. “Ask J.P. Morgan to do the math,” laughed Nadella, who’d just finished crowing about the success of his 6,000-person division in today’s executive briefing at the close of the day’s activities for the launch of Visual Studio 2012 in Seattle.

“Only inside of Microsoft can a $19 billion business — the second highest revenue generator for the company — be sort of downplayed,” he said, citing double digit growth over last 10 years (except for one quarter in 2008 that we’d all rather forget) on the top and bottom line. “We now have close to 40% operating margins. We’ve also generated four or five individual billion dollar business including Terminal Services, System Center, Business Intelligence. It’s a really a testament to the popularity of our tools,” he said.

But at the root of it all, he said, is the explosion of data center infrastructure. “It used to be we were good, we were cheaper. There was always someone else like an Oracle or VMware selling against us into a tier-one data center. But our total cost of ownership is one tenth of theirs, plus the value advantage over them,” Nadella said. Out of today’s $2.2 trillion of IT spend, the modernization of data center and the growth of the STB division is due to “more people using our tools for building infrastructure, on which to build apps to run on devices. We are the best at it.”

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