Microsoft CEO Satya Nadella highlights ‘second wave of Digital Transformations sweeping every company and every industry’


Satya Nadella highlighted how a new wave of Digital Transformations is occurring over the past year across companies and industries and is driving Microsoft earnings, which beat analyst expectations in 4Q20. Microsoft’s Cloud segment saw 23% revenue growth, led by a 50% increase in revenue attributed to the Azure cloud platform. This was higher than the company’s other two divisions, Personal Computing (+14%) and Productivity and Business Processes (+13%). Notably, Microsoft’s security revenue increased 40% in 2020 over 2019 to more than $10b.



Microsoft’s position as one of the three biggest cloud providers puts it in position to have some of the best information regarding companies digital transformation trends. Last April Mr. Nadella commented in the wake of the Covid driven lockdowns that “we’ve seen two years’ worth of digital transformation in two months”, and the accelerated ‘second wave’ of digital transformation he is describing has been evident as well.

Indeed one of the key fallouts from Covid is that companies that have been traditionally thought of as ‘not digital’ have had to rapidly figure out how to digitize their products and processes, or watch as their digitizing competitors race ahead of them. The Cyberhedge Cyber Governance Indices, which measure how successful companies are at digital transformation, show that the equity markets are rewarding companies that have effective digital transformations and punishing the laggards.

These indices confirm Mr. Nadella’s comments that digital transformations are happening across ‘every company and every sector’, as the outperformance of companies with the best cyber governance (the 5-Star’s) over the companies with the worst cyber governance (the 1-Star’s) is consistent across every sector, in every market covered (US and Europe). This is not a story of ‘tech outperforming old industries’, it is a story of ‘the companies with the best digital transformations and cyber governance across every industry outperform their peers’.

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What are the Cyberhedge Cyber Governance Indices?

These first ever benchmarks prove good cyber governance matters to shareholder value. They measure stock market performance of companies with good and with bad cyber governance scores. Scores are based on Cyberhedge’s proprietary cyber governance rating methodology. Market performance is tracked by an independent firm. The results show that companies with good cyber governance outperform their peers in US, UK, and EU markets.

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