Microsoft CEO reveals supply chains are 'back on track'

Vendor commits to prioritising healthcare organisations if Azure reaches constraint capacity

Microsoft's supply chains are back on track, though the "bigger issue" is the demand for products in Western countries battling COVID-19, according to CEO Satya Nadella.

In an interview with CNBC, the chief exec was confident that product launches announced pre-outbreak would continue as planned, but said that he is concerned about demand in regions battling the virus.

"The supply chains are all coming back; right now that is not a real issue. I think the bigger issue is what happens in the US and Europe and other developed markets about the demand side, going forward," he told the outlet.

"We feel good about where we are - look at how we are able to meet the demand of working from home kits. I think on the supply side we are getting back on rails, the question now is getting the products done and launched and the situation, in terms of demand."

Microsoft's diverse business and portfolio will allow the company to weather the ongoing crisis, Nadella said, adding that his main priority at the moment is to be the "digital responder to first responders".

"Microsoft has a great balance sheet, we are a very diverse business; we have a mix of annuity and non-annuity that is also stronger than the last time we went into the financial crisis," he said.

"Right now my focus is our responsibility as the first responder to other first responders. I think that with all these changes there is going to be a new demand that we will have to scale to meet.

"We will weather the storm, we are a healthy company in terms of our financial strength, the diversity of the business, the segments, the geographies, the product lines and business models. I am quite confident, quite frankly, that we will come out of this pretty strong."

The capabilities of modern datacentres and public cloud infrastructures have allowed the tech giant to handle the increased pressure on its Azure cloud platform as more people work remotely, the CEO said, adding that it has seen a 60x usage in Teams.

"If there is a silver lining to any of this, the current architecture of public cloud and SaaS applications has that elasticity built into it," he continued.

"If this was a previous generation of datacentre or software architectures I don't think we would have been able to deal with this crisis as effectively as we have been able to. We are definitely holding up and seeing peak demands.

"Across the board, there is a change in the network and scale characteristics, but the good news is that the public cloud infrastructure and SaaS application architectures are scaling and holding."

In a separate blog post, Microsoft revealed that should its cloud platform face capacity constraints, it would prioritise healthcare workers and organisations.

"As demand continues to grow, if we are faced with any capacity constraints in any region during this time, we have established clear criteria for the priority of new cloud capacity," the blog post stated.

"Top priority will be going to first responders, health and emergency management services, critical government infrastructure organisational use and ensuring remote workers stay up and running with the core functionality of Teams.

"We will also consider adjusting free offers, as necessary, to ensure support of existing customers."

This news comes days after it announced it would be making Teams free for all NHS workers to communicate with each other through the pandemic.

"These are certainly unprecedented and challenging times. It is not business as usual. But, together, we can and will get through this," the vendor stated.