Microsoft CEO Satya Nadella keeps talking about 'tech intensity' — here's what it is, and why it's so important to Microsoft (MSFT)

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• Microsoft has been talking about what it calls “tech intensity” for at least the past year, including prominently with a new “State of Tech Intensity 2019 Study.”
• Tech intensity basically means the potential for its customers to grow by adopting technology, and then building their own on top of it.
• Microsoft continues to talk about tech intensity as it positions Microsoft to be the provider of those platforms, tools and training as traditional companies adopt new technologies.
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Microsoft yet again heralded the phrase “tech intensity” this week when it released a study about how American companies are using technologies such as artificial intelligence and machine learning.

CEO Satya Nadella has been talking about tech intensity – basically, the potential for its customers to grow by adopting technology and then building their own on top of it – for at least the past year, and it’s become an important part of Microsoft’s pitch to customers.

Nadella appears to have first talked publicly about “tech intensity” in his keynote at the company’s 2018 Ignite conference, and the phrase has persisted. Nadella has written blog posts about it, Microsoft executives have used the phrase in interviews, it has appeared in official communications and marketing materials from the company and even made a comeback during Nadella’s keynote at Ignite this year. 

“In a world where every company is becoming a digital company, we see examples of organizations in every industry embracing tech intensity to thrive and maximize their impact,” Nadella wrote in a blog entry earlier this year.

Much like its other often-used “digital transformation” phrase, Microsoft continues to talk about tech intensity as it positions Microsoft to be the provider of those platforms, tools and training as traditional companies adopt new technologies.

What is tech intensity

Nadella often uses a formula to describe tech intensity – “(tech adoption) ^ tech capabilities = tech intensity” – but he defined it most clearly in a LinkedIn post earlier this year as “the potential for companies and countries to jump-start their growth by not just adopting technology, but by building their own technology too.”

Basically, Nadella is saying companies in all industries need to adopt the latest technology platforms and tools – ideally, Microsoft products – and then train their workforce to be able to create their own uses for advanced technologies like artificial intelligence.

Microsoft also wants to be part of the second half of the equation, too. The company is investing in educational resources, including recently building a new team capable of training users at any technical level on how to get the most out of its Azure cloud-computing business.

Microsoft said it recently surveyed 700 executives and decisions makers from U.S. companies in nearly every industry and found 73 percent of companies report they’re creating their own intellectual property using technologies such as AI and machine learning, the internet of things, blockchain, and mixed reality.

Why Microsoft won’t stop talking about it

Tech intensity is basically a pitch for Microsoft.

It positions Microsoft to be the provider of those platforms, tools and training as traditional companies adopt new technologies. The phrase is closely linked to another often-used phrase at Microsoft, “digital transformation,” which basically means traditional businesses transitioning to new technologies such as the cloud in order to stay ahead of the curve.

Pharmaceutical company Novartis, for example, is using Microsoft artificial intelligence technologies to establish an “innovation lab” for its employees to find new ways to use AI across the business.

The tech intensity pitch may have even been part of the company’s bid for the Pentagon’s contentious $10 billion cloud computing contract known as JEDI. Microsoft’s US Regulated Industries President Toni Townes-Whitley used the term throughout a lengthy blog post in October describing what Microsoft can offer governments.

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