NEW YORK: Microsoft, the tech company, believes that formulating a clear set of “principles” can help guide its strategy in numerous complex areas of innovation, a move that could protect its brand in the long term.

Brad Smith, Microsoft's president/chief legal officer, discussed this subject during a session at the 2018 Techonomy NYC conference.

“Fundamentally, what we have found is this: first, to really define a set of principles that will govern how we will make decisions,” he said. (For more, read WARC’s in-depth report: Microsoft builds its business on principles.)

“Increasingly, you’ll see us articulate four principles around what we think it takes to have a trusted cloud. We have these six principles around the shared innovation initiative. And we do use those as we then make difficult decisions.”

This issue is growing ever more important for the technology sector, as companies like Facebook, Google and Twitter have all faced heightened scrutiny in the recent past – be it for Russian electoral interference, privacy abuses or the rise of bots.

“I do think that the more one can – in business and elsewhere – articulate principles, share them, and then show that you actually act on that basis, it helps,” Smith said.

Many observers previously chastised Microsoft for falling behind in sectors like social media, mobile and online search – three fields where ads play a key role, and that have seen criticisms about using consumer data for targeting purposes.

“What we are obviously seeing play out in some quarters is this tension between more advertising revenue and what it means to monetise people’s personal data in a way that may cause people to feel uncomfortable,” Smith said.

Most tech companies are forced into certain “tradeoffs”, he conceded. But while many of these firms rely on ads for the majority of their income, Microsoft has a diversified portfolio split across software, hardware and cloud computing.

“The truth is, no matter what business model you have, there is always a point in time when you face a question: Do we make more money? Or do we sacrifice and leave some money on the table for some other goal?” he said.

“It may be making more money in the longer term, versus the short term; it may be striking a balance that we feel is more sustainable as, say, a responsible, global company.”

Sourced from WARC