Microsoft Tries a New Role: Moral Leader

But while the company’s power has diminished since a couple of decades ago, when it controlled computing through Windows, Microsoft remains an influential voice. On Monday, its market capitalization of $733 billion made it the third most valuable technology company, behind Apple and Amazon and ahead of Google parent company, Alphabet, and Facebook.

“The irony for Microsoft is that they lost in search, they lost in social networks and they lost in mobile, and as a consequence, they have avoided the recent pushback from governments and media,” said David Yoffie, a professor at the Harvard Business School. “This has given Microsoft the freedom to take the high road as the ethical leader in technology.”

Since taking the reins at Microsoft in 2014, Mr. Nadella has brought a more sensitive style of leadership to the company than his two predecessors, Steve Ballmer and Bill Gates. That shift has proved to be more suitable for Microsoft in this era.

Two decades ago, Microsoft was depicted as a bully that ran roughshod over competitors in a landmark antitrust suit brought by the federal government, followed by similar cases brought by the European Union and private companies. Mr. Smith was brought in to make peace in Microsoft’s antitrust battles, and Mr. Nadella was the company’s first chief executive to start in the job since those suits were settled.

Photo

“We need to ask ourselves not only what computers can do but what computers should do,” Satya Nadella, Microsoft’s chief executive, said on Monday at the company’s developer conference in Seattle.

Credit
Kyle Johnson for The New York Times

In a phone interview, Mr. Smith, who is also Microsoft’s chief legal officer, called its legal problems in past decades a “gut-wrenching experience” that had shaped Microsoft in its current form. “It made Microsoft a better and more responsible company,” he said.

This year, Microsoft published a book that outlined some of the harmful effects that could come from artificial intelligence, such as bias in job recruiting. It has litigated four lawsuits against the United States government over the past five years in efforts to defend customers’ privacy rights. One of them, a fight over law enforcement access to data stored in an overseas Microsoft data center, went to the Supreme Court, which dropped the case after Congress enacted a law that mooted it.

“Not only did Microsoft learn from its mistakes, Satya is a unique and caring individual,” said Tim O’Reilly, a tech industry publisher and conference organizer. “He understands deeply that Microsoft must help others to succeed.”

The closest analog among Mr. Nadella’s peers is Tim D. Cook, the chief executive of Apple, who has painted Apple as a staunch defender of its customers’ privacy. He has jabbed at Facebook and Google, both advertising-supported businesses that profit from the personal data they collect from their users, a contrast to Apple’s business model of selling devices.

Facebook and Google, which owns YouTube, have defended their advertising businesses for allowing them to deliver services for free. They’ve promised to add more human moderators and invest in software tools that can screen out misinformation and other prohibited content.

Mr. Cook has not turned his ire toward Microsoft, which gets most of its revenue from software, hardware and cloud computing services. The company has investments in internet services that are supported in part by advertising, including its Bing search engine and LinkedIn, the social network for professionals it acquired in 2016.

Mr. Nadella has been more hesitant than Mr. Cook to publicly criticize other technology companies, turning to more subtle types of persuasion. A low-key leader, Mr. Nadella peppers his speeches and interviews with references to literature, warning that careless creators of technology could contribute to a dystopian world of George Orwell’s “1984” or Aldous Huxley’s “Brave New World.” His lieutenant, Mr. Smith, has become a ubiquitous ambassador for Microsoft on the big social issues facing technology in Washington, in Brussels and on the conference circuit.

Microsoft is still occasionally cast in the role of villain. A California man who sold recycled electronic waste recently pleaded guilty for creating thousands of unauthorized discs that helped people restore the Windows operating system on refurbished PCs. The recycler, who has been sentenced to 15 months in prison, has said Microsoft supported the case against him, which was brought by federal prosecutors, because he threatened part of its business. Microsoft published a long blog post that portrayed his actions unfavorably.

Still, the Microsoft of 2018 is a long way from the company that was once portrayed as a corporate predator.

“Microsoft lived through negativity that these companies are experiencing now, and it doesn’t want to go back to those days,” said Vivek Wadhwa, a distinguished fellow with Carnegie Mellon University’s Silicon Valley campus.

Mr. Smith of Microsoft said the greater scrutiny on the tech sector would not always fall on the same companies.

“At any given moment, there may be one or two companies in the spotlight,” he said. “I don’t think one should assume the same one or two are always going to be in the spotlight or always on the defensive.”

Continue reading the main story