With the exception of some business cards and a few business books, her office in Mississauga is entirely paperless.
She is not on some mission to save the world’s forests – saving trees is just a fringe benefit of doing everything in the cloud. And the cloud is where Microsoft Corp. (Nasdaq:MSFT) is headed.
“Literally everything in my life is on a device and it’s in the cloud,” Kennedy told Business in Vancouver during one of her recent trips to Vancouver, where Microsoft is planning a major expansion and relocation that will double its current head count from 550 to 1,000.
Kennedy reads all her books, magazines and newspapers on tablets (a Microsoft Surface and a Lenovo Yoga) and does all her business reading and writing on Microsoft’s OneNote.
Her zeal for cloud-based, cross-platform services and applications is a case of eating her company’s own cooking. Under its new CEO, Satya Nadella, Microsoft has a new direction: “mobile first, cloud first.”
“Part of why I was chosen is I have a pretty heavy cloud background,” said Kennedy, who replaced former Microsoft Canada president Max Long in October 2013.
Born and raised in Chicago, Kennedy studied industrial management and engineering at Purdue University, earned a master’s degree from Queens University in Charlotte, North Carolina, and then spent more than 30 years in the computer business – 19 with International Business Machines Corp. (NYSE:IBM) and 12 with Microsoft.
While working for Microsoft in Seattle, Kennedy and her husband, Jim, got to know Vancouver and Vancouver Island when their son, a rower, decided to go to Brentwood College in Victoria for his last two years of high school.
“We were living in Seattle and we would take the ferry up,” Kennedy said. “I love Vancouver. We would often drive up and meet him at the ferry and come into the city for the weekend.”
Before her latest promotion, Kennedy spent five years as regional vice-president for Microsoft’s enterprise customers.
“In the business that I had before, we grew the business by $1 billion,” she said. “We went from $2 billion to $3 billion in about three years.”
Much of that growth was the result of very large enterprise customers moving off desktops and local servers and into the cloud. It’s that trend that has prompted Microsoft to move into new territory.
The move is part of what Kennedy describes as the company’s third wave of disruption.
“I was around when Bill Gates had the vision for the PC on every desk and every office, which was crazy to most people, but it happened,” Kennedy said.
The second wave started in the mid-1990s, when companies began moving off mainframes and onto the Internet.
The third wave is the move to the cloud and mobile devices, allowing consumers and businesses to access anything, anywhere, and it is forcing Microsoft to reinvent itself.
With the exception of its Xbox game console business, Microsoft has traditionally been strictly a computer software company, unlike its biggest competitor, Apple Inc. (Nasdaq:APPL), which is both a hardware and software maker. Sixty per cent of Microsoft’s revenue comes from enterprise software, Kennedy said.
But plummeting PC sales and the rise of mobile have forced Microsoft into the hardware space. Last year, it launched its own tablet – the Surface – and it has just completed an $8.3 billion acquisition of the Finnish mobile phone company Nokia.
Microsoft has also been investing heavily in the next generation of workers. On one of her recent trips to Vancouver, Kennedy met with B.C. school officials to talk about providing B.C. schools with Microsoft products, like Office 365, for free.
It’s not just an exercise in philanthropy or branding, but part of the company’s efforts to equip the next generation of workers with the tools they need.
“When they come to the workforce and I need to hire them – and I just hired [25] top university students – they need to be ready to work,” Kennedy said. “Being ready to work means you’ve taken the right math classes; you know how to use the software that is widely used.”
The new employees she refers to are the first hired under the Foundry Vancouver program, which recruits the best and brightest university students from across Canada for a 16-week paid internship, during which they will work on new Microsoft applications and services in Vancouver. Many will end up being hired permanently, while others may go off to work for other high-tech companies or start their own.
“This is only the second time we’ve ever done this,” Kennedy said. “We did it first in Boston with MIT. It was very, very successful. We decided to pick a second city and we could have gone anywhere in the world, and we picked Vancouver.
“Some of them will come and work for us, and that’s fantastic, but some of them will go out and spawn a new … digital economy for Canada.”
The Foundry Vancouver program is part of Microsoft’s plans to expand its workforce here. The company plans to build a new 150,000-square-foot training and development Microsoft Canada Excellence Centre in Pacific Centre, above a new Nordstrom outlet. It is slated to open in late 2015. As part of that expansion, which is worth an estimated $90 million annually in direct spending, the company plans to add 450 jobs to its existing head count.
Microsoft employs 1,250 people across Canada, about 550 of them in Vancouver. That includes more than 300 game designers and engineers at its two console game studios, BigPark and Black Tusk.
Microsoft’s investment in Vancouver is being made without the kind of subsidies that Toronto and the government of Ontario have offered to large tech companies and game studios – something Vancouver Mayor Gregor Robertson alluded to May 1 when Microsoft announced its Vancouver expansion plans.
“It’s great news when companies of Microsoft’s stature are compelled to be in Vancouver and build their business – create jobs here – without incentives,” Robertson said.
Although Microsoft Canada is headquartered in Mississauga, Vancouver’s tech talent pool and proximity to Microsoft’s head office in Redmond, Washington, have made it an important part of Microsoft’s Canadian business.
Microsoft opened a development centre in Vancouver in 2007 and then acquired BigPark studios in 2009. BigPark makes console games exclusively for Xbox.
In 2012, Microsoft opened a new Vancouver studio, Black Tusk, which just this year was given Gears of War – a billion-dollar franchise and one of the top-selling Xbox games.
In addition to its gaming studios, Microsoft plans to expand its Vancouver development work. Engineers here will work on Microsoft products such as SharePoint, Skype and Yammer, a private social network used by companies and organizations for collaboration.
