Nadella: Microsoft needs a ‘data culture’ by Adam Lashinsky @FortuneMagazine April 17, 2014, 1:50 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons Microsoft’s MSFT neophyte CEO Satya Nadella held an event in San Francisco Tuesday, his third public appearance in three weeks. Unlike his last outing, to unveil Microsoft’s Office app for the iPad, the daylong affair didn’t get much attention, most likely because it was focused on enterprise software. It’s true that Nadella didn’t say much that was new. Reuters and Bloomberg covered the basics, which included updates on Microsoft’s database and ancillary products. Yet I was struck by the words Nadella and other executives used to describe Microsoft’s goals, primarily the many ways they dressed up and accessorized the word “data.” Big data is the theme of the era, and no one can ignore it. But Nadella and his team have hit on clever ways to explain it, which strikes me as a positive development. After all, this is the part of the business Nadella ran before his elevation to chief executive, and it’s also the part of Microsoft’s business that is least vulnerable to competition. In Nadella’s world view, data generated by, living on, and enhanced by Microsoft’s software is the company’s future. He said the company needs a “data culture where every engineer, every day, is looking at the usage data, learning from that usage data, questioning what new things to test out with our products, and being on that improvement cycle which is the lifeblood of Microsoft.” He talked about “data exhaust,” such as server logs, social-media streams, and transaction data that is meaningless unless it can be turned into “data fuel” for something he called “ambient intelligence.” Getting this right will lead to a “data dividend” for Microsoft’s customers. MORE: For Microsoft’s Nadella, signs of leadership potential Such fluffy language included examples too. Microsoft executives showed how users can exploit new features of Microsoft’s Office productivity software to catch cybercriminals, improve energy utilization in buildings, and target marketing expenditures. Words have limitations, of course. Nadella encouraged users to “think of Office as the scaffolding from which you can access the data.” I like that. Yet too often others have erected their products far from Microsoft’s building site. To this day I’m annoyed that Microsoft didn’t build LinkedIn from its Outlook email program, a veritable birthright for Microsoft. For years now I’ve distributed an informal email to a group of friends, linking to my articles. That group function in Outlook did next to nothing for me other than send an email. I finally got modern and am using Mailchimp now instead. The analytics are gorgeous, and Microsoft should be giving them to me, not some startup with a funny name. Still, words are a start. Kevin Turner, Microsoft’s chief operating officer, used the word “humility” at least twice in communicating the company’s attitude toward its customers. And Nadella isn’t done using his words. Microsoft said that the CEO will begin hosting the company’s quarterly earnings calls on April 24, a departure from Steve Ballmer’s routine. Investors love to hear from the CEO directly — especially if he can tell them his words are translating into the kinds of numbers they want to hear.