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- Microsoft’s president, Brad Smith, has built a reputation as “the statesman of the technology industry,” as one former longtime colleague put it.
- Smith’s influence in Washington, DC, is crucial at a time when Microsoft finds itself at the center of escalating tensions between China and the Trump administration in its bid to acquire TikTok’s US operations.
- Also, the Pentagon on Friday stood by its decision to award a cloud-computing contract worth as much as $10 billion to Microsoft, boosting the company’s government cloud business.
- Friends like Sen. Tim Kaine and peers like Google’s Kent Walker say Smith’s strength lies in his ability to find common ground — an approach that’s served Microsoft well in dealing with politicians and competitors alike.
- Are you a Microsoft employee? Contact this reporter via the encrypted messaging app Signal (+1-425-344-8242) or email (firstname.lastname@example.org).
- Visit Business Insider’s homepage for more stories.
Last month, the CEOs of Facebook, Google, Amazon, and Apple answered tough questions about their business practices from a US congressional antitrust committee, live for the public to see.
One of the most valuable tech companies in the world, however, was notable by its absence: $1.6 trillion Microsoft.
But while Microsoft CEO Satya Nadella wasn’t in the hot seat during that hearing, the company still had an impact on the proceedings. Weeks before, a top Microsoft executive came to consult with members of the committee in a conversation the company says was meant to share its experiences as the target of antitrust scrutiny in the not-so-distant past.
That executive was Microsoft’s president and chief legal officer, Brad Smith. And the specific request for his expertise shows his influence in Washington, DC, at a time when the company is navigating some tricky political waters.
Not only is Microsoft bidding to acquire TikTok’s US operations ahead of the Trump administration’s deadline for a deal, but it just last week scored a major victory as the Pentagon on Friday reaffirmed its decision to award the $10 billion JEDI cloud contract to Microsoft — despite arguments by Amazon Web Services that it lost the deal because of political interference.
Microsoft declined to make Smith available for an interview, but several people in his orbit say his strength lies in his ability to empathize and collaborate with the company’s opponents and even, in some cases, in his ability to hire them.
While Microsoft has taken strong public stands, particularly on immigration issues including President Donald Trump’s travel ban on several majority-Muslim countries and more recent suspension of visas for foreign workers, Smith has maintained good relationships with the White House and both sides of the congressional aisle by making sure he, and by extension Microsoft, never gets pigeonholed as partisan.
Where many technology companies are viewed on Capitol Hill as overtly liberal, Microsoft is never seen as being “stuck in a bubble,” said Barry Jackson, a former chief of staff to then-House Speaker John Boehner who also advised President George W. Bush.
That reputation has helped Microsoft stay out of Trump’s crosshairs, even as the administration takes aim at other tech giants such as Amazon. Now, Smith’s influence will be crucial as Microsoft navigates a bid to acquire a portion of the viral-video app TikTok from its Chinese owner under pressure from Trump for a sale.
Sen. Tim Kaine, the 2016 Democratic vice-presidential nominee who is a longtime friend of Smith’s, told Business Insider the key was that when it comes to reaching an agreement, Smith will set politics aside and seek the common ground. He described Smith’s negotiating style as, “Can we get to yes?”
“Some people negotiate and they say they want to feel like they’ve beaten you in a negotiation,” Kaine said. “That’s not the way Brad is. Brad would be trying to figure out that sweet spot where participants were able to achieve if, not all of their mission, you know, much of their mission.”
Smith’s focus on ‘peace’ played a key role in CEO Satya Nadella’s reinvention of Microsoft
Smith, a graduate of Princeton and Columbia Law School, first joined Microsoft as a lawyer in 1993. By 2001, he interviewed for the company’s vacant general-counsel position and was given the opportunity to make a PowerPoint presentation to Bill Gates — then Microsoft’s chairman — and then-CEO Steve Ballmer.
His presentation contained just one slide: “It’s time to make peace.”
That simple idea was radical for Microsoft, which at the time was at the tail end of an antitrust case levied by the US Department of Justice and numerous state attorneys general that had painted it as an unbeatably dominant force in the industry. Rivals like Apple, IBM, and Sun Microsystems were only getting more aggressive in their competition with Microsoft and the Windows operating system.
“The industry was incredibly divided,” Horacio Gutierrez, who worked with Smith at Microsoft for nearly 20 years before taking his current role as Spotify’s chief legal officer, told Business Insider. “There was a whole coalition of companies coming after Microsoft.”
He continued: “And he was the guy who realized that, if the company was going to continue to move forward and remain successful, it was time to find a way of being pragmatic and building bridges with other companies in the industry and with government.”
Smith’s impact on the company was made apparent in 2015, when Nadella promoted Smith to the title of president. The move, which came after Nadella had been Microsoft CEO for about a year, was a head-scratcher to many within Microsoft at the time, Mary Snapp, the company’s vice president of strategic initiatives, told Business Insider.
But over the years, the logic has become clear, as making peace has become one of the hallmarks of Nadella’s grand reinvention of the company. Nadella’s reign has seen Microsoft forge alliances in some areas with former rivals including Google, Apple, Oracle, and VMware.
Gutierrez called Smith “the statesman of the technology industry” and said he managed to find common ground with companies Microsoft once considered “ferocious rivals.”
While Nadella is often given the bulk of the credit for the grand transformation of Microsoft into a more open, collaborative company, Gutierrez says that the CEO “relies on [Smith] heavily” when it comes to making institutional change. Microsoft declined to make Nadella available for this article.
Overall, Gutierrez went as far as to describe Smith’s appointment to chief legal officer as “really the beginning of the transition that Microsoft made from the company that was sort of the embattled company of the late ’90s to the more mature company that you see today.”
Smith persuaded Bill Gates to become more diplomatic with governments and made Microsoft more collaborative with its former ‘ferocious rivals’
When Microsoft faced its own antitrust battle more than two decades ago, Gates made a point not to engage with governments.
As Gates said in the forward to Smith’s recent book, “Tools and Weapons”: “I prided myself on how little time we spent talking to people in the federal government. I would tell people, ‘Isn’t it great that we can be successful and not even have an office in DC?’ As I learned the hard way during the antitrust suit, this was not a wise position to take.”
That all changed when Smith came on board as general counsel, Snapp, who joined Microsoft as an attorney in 1988, said.
“Within months he and Bill went on the road,” Snapp said. “They went to visit our national capital. They went to visit our state capitals. And that had not happened before. That was not the plan before he became the general counsel.”
The unconventional approach ended up paying off, Snapp said, with Microsoft suddenly finding itself with many more friends and allies in high places.
“Brad has been the diplomat for the company in Washington, DC, and in other capitals around the world,” Snapp said. “As soon as he came into the role, he immediately worked to find areas to compromise, to resolve the issues, to build the relationships.”
Smith’s success set the model for companies like Facebook
Smith’s success has helped forge a new kind of role in the technology industry, with other tech titans looking to find their own diplomats.
Google, for instance, expanded Kent Walker’s role in 2018 to senior vice president of global affairs, giving him a wider mandate than his previous title of general counsel. Facebook, Snapp said, even called on Smith and Microsoft for guidance on creating a similar role within the company. Facebook was unable to confirm that conversation happened, but a company representative said that’s “not to say it didn’t happen.”
In some cases, situations have called for Smith to work with his counterparts at other companies, too.
For example, when Microsoft and Google were independently fighting US government orders to disclose data under the Foreign Intelligence Surveillance Act, it was Smith who reached out to Walker to join forces. Smith wrote about the exchange in his book.
“No one would have accused of us of being best friends,” Smith wrote. “I would not have blamed Kent if he suspected a Trojan horse. But he listened and came back to me a day later saying he wanted to work together.”
Walker, for his part, said Smith had more than once been the one to bring the tech industry together when the situation called for it.
“We have a cordial relationship at this point,” Walker told Business Insider. “And, you know, he is very attuned to know how companies can work constructively with governments and push back when necessary … Along the arc of history, he is somebody who has on several occasions has tried to work together with others in the industry.”
Smith met directly with New Zealand Prime Minister Jacinda Ardern, for example, after the 2019 shootings at two mosques in Christchurch and personally helped to convene a coalition of governments and tech companies including Amazon, Facebook, Google, and Twitter in an effort to eliminate terrorist and violent extremist content online.
Smith has helped Microsoft build vast network of political allies including in the White House and Congress
Smith’s style has won friends on Capitol Hill. He has “strong, individual professional relationships” with senior leaders in the Trump administration and in Congress, Snapp said.
The breadth of people who have passed through Microsoft has also helped, particularly when it comes to TikTok.
For example, Chris Liddell, a former Microsoft chief financial officer, now works in the White House as assistant to the president and deputy chief of staff for policy coordination. There are even TikTok connections: Zhang Yiming, the founder of TikTok’s owner, ByteDance, did a brief stint at Microsoft, while TikTok’s global general counsel, Erich Andersen, who just joined the company this year, is a 25-year Microsoft veteran who worked closely under Smith.
One Washington state senator is also a full-time Microsoft employee. Washington state has a part-time legislature and allows lawmakers to have full-time jobs outside the capitol.
The lawmaker, Joseph Nguyen, this year sponsored a bill intended to regulate government use of facial recognition. Microsoft supported the bill, but the American Civil Liberties Union wanted a moratorium on facial recognition.
Jennifer Lee, the technology and liberty project manager for ACLU of Washington, said her organization had been at odds with Microsoft in the company’s home state on issues including data privacy and facial recognition. Lee hasn’t worked with Smith directly but said his public statements about regulating facial recognition seemed to contradict action company representatives had taken on the issue.
“Microsoft has a huge influence on the state,” Lee said. “It’s been really challenging to counter the army of lobbyists they have in Olympia,” the state capital. Microsoft said it had only one in-house lobbyist in Olympia and used two external, contracted lobbyists for the issue.
The secret to Smith’s public-policy success is seeking out opposing points of view
Smith’s admirers, by contrast, say what makes him effective in the political sphere is his ability to empathize with his opponents — and sometimes even recruit them when all is said and done.
“There has been more than one time where after a particularly difficult business or legal issue, once that has been resolved we have asked the leader on the other side to come join us in a consulting capacity or frankly, on a couple of occasions, hired because we need that outside perspective,” Snapp said. “And I think that is something that’s really important.”
For example, Snapp said, Microsoft recently hired Casper Klynge, who The New York Times once called the world’s first ambassador to the tech industry. Klynge wasn’t exactly at odds with Microsoft, Snapp said, but comes from a strong privacy background and a country — Denmark — known as one of the world’s strongest proponents for strong privacy regulations. He started in January as the company’s new vice president of European government affairs to “strengthen the company’s external relationships with the EU institutions,” according to the company.
Smith’s willingness to recruit opposing views to advise Microsoft is perhaps best exemplified through the Microsoft Advisory Council, a group he helped form in 2013. Microsoft describes the group as consisting of “individuals from across the political spectrum who offer ideas and advice on a variety of national policy issues,” the purpose of which it says is to “gather ideas and seek feedback to help inform the company’s policy priorities.”
Members of the council, which Smith runs and meets with four times a year, describe Smith as someone who can listen to all sides and keep his own politics out of it.
“He is not what I would think of as the typical Silicon Valley or similar company executive,” Jon Kyl, a former US senator who is on the council, said. “He’s someone who understands the political and cultural issues in the country at any given time and who tries to see how Microsoft can fit into that.”
Smith asks the council for perspectives on an issue before Microsoft makes a decision. He opens the meetings by bringing up a point for a discussion, proffering an idea, and explaining what the company is trying to achieve. What’s unique about this, Jackson, the former Boehner chief of staff, said, is that Smith is genuinely “hungry” for as many different points of views as possible.
“Brad doesn’t get himself stuck in a bubble,” Jackson said. “Microsoft is not viewed as a partisan actor. Nobody looks at it as a bunch of liberal democrats. I really have no idea whether he is a Republican or a Democrat.”
Got a tip? Contact reporter Ashley Stewart via encrypted messaging app Signal (+1-425-344-8242) or email (email@example.com).