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Microsoft is a Web2 giant producing software, consumer electronics, personal computers, and related services.

Yorke shares his experience working at Microsoft in a strategy and transformation role in blockchain and Web3 technology, specifically focusing on the production of a blockchain-based full-stack application within one of the largest supply chains in the world.

We dive into what Microsoft is doing within the blockchain space, how Microsoft is using NFTs internally, and the use-cases of Ethereum and IPFS inside the company.

We also talk about the different CEOs that have led Microsoft over the years and even get into the rumors of Google choosing their slogan “Don’t Be Evil” because of Microsoft.

Listen to the interview in this week’s podcast episode here:

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I am interested in learning more about how Web3 and crypto work together. Web3 aims to keep everything decentralized and open to give power back to users. However, I am curious to know if there are any centralized elements in this and how you approach this concept. Can you provide more information?

The journey of exploring blockchain and supply chain started in 2018 with a thesis around the intersection of blockchain technology and the developing world in the context of raw materials.

As the exploration continued, the opportunity for traceability of high-value goods and the transformative potential for the finances of those goods was realized.

The team also realized that their technical approach solved for a distributed system across multiple parties in a supply chain, which existing ERP systems like SAP and Dynamics are not equipped to handle.

Who would be the clients of such a service?

This is a high-tech industry that focuses on providing enterprise supply chain solutions. The suppliers are all companies that supply components in the high-tech industry, which now includes automotive and other industries as well. Microsoft is a key player in this industry and is investing in it.

Other companies involved include Lenovo, AMD, Intel, Nvidia, ZT systems, Samsung, and many others. These companies supply high-value components that go into every computing platform, including cloud, PCs, laptops, and phones. By working with Microsoft’s Cloud, which is one of the largest supply chains in the world, these companies have the incentive to drive the end product to its final state. It would be difficult to achieve this in any other way.

How did you start in the blockchain space initially? I know it’s been a while. And how are you thinking about that within the context of Microsoft?

I stumbled upon blockchain technology while researching new and innovative technology trends. I wondered why I didn’t discover artificial intelligence technology instead, but eight years ago, it wasn’t as advanced as it is today. I constantly read and follow social media to stay updated on new technology.

In early 2015, I came across blockchain and realized that it solved problems that I had struggled with in my tech career. These included unique identification and transcending the boundaries of an enterprise. This led me to think about humanitarian identity and opportunities. The intersection of blockchain technology and humanitarian opportunities resonated with me, and I dove deeper into this technology for about six months before fully committing to this journey.

Why are you excited about crypto and Web3, and how do you view the space in general?

From 2015 until now, there has been a lot of progress and changes in technology, especially in the Ethereum public network. We’ve seen a big shift in how we view technology and its evolution. One major change is the Merge, which has had a big impact on the carbon footprint of the organization.

This is a significant historical moment and it opens up new opportunities for businesses to think about how they can reduce their carbon footprint when building systems.

As we near 10 years of using public blockchain technology as a computing mechanism, there are many possibilities for continued growth and development in this field. This is a different pattern than we’ve seen in traditional enterprise companies, as systems were previously separated in silos. This is an evolution of open-source and distributed systems.

Microsoft has a lot of moving parts, so between cloud and social and developer resources, and then even gaming, how do Web3 and crypto kind of fit into that?

Microsoft is a large company with many divisions and capabilities, including its browser and Bing search business, LinkedIn, dynamics ERP business, gaming business, Office, and Azure cloud business. To strategize on anything in a company of this size, it is important to be a catalyst and instigator, but ultimately the business must prioritize which capabilities will work best for them.

Product teams have their own cycles, and it is important to educate and understand the capabilities and advantages of an approach. An example of this is the decentralized identity work in Microsoft’s identity engineering organization, which has now been made available to the public as part of the identity suite of products.

The concept of digital certificates, assets, and ownership rewards, whether referred to as blockchain tokens or Web3 tokens, will continue to evolve in the industry and may be used differently across product teams within Microsoft.

How do you handle the challenge of answering questions from different topics in gaming, social, and crypto, and how do you navigate pushing new ideas, such as tokens on a balance sheet, within a company? Any advice for others in a similar situation?

A while back, I started on a journey and had questions about what to do next. I had been teaching entrepreneurship and enterprise in my role as a professor at NYU and had developed some course materials on the subject. However, I decided to apply my startup instincts to my current situation within a large corporation. I realized that the same instincts and qualities needed in a startup are also required in any ecosystem, even within a company.

One important aspect for success on this journey is resilience, as you will often face rejection or negative answers. It’s also important to remain objective and understand the business reasons behind decisions, prioritizing based on what the company needs to achieve.

There is always a need to educate and inform others about new developments and ideas. To do this, I run a weekly crypto briefing series where I invite founders to speak about their work and record it for internal use. This journey is ongoing and requires constant effort to share information and stay informed.

Can you describe the level of difficulty you faced in maintaining excitement within Microsoft, both for yourself and for the company, during the years 2015 and 2016?

Companies, including Microsoft, have default behaviors and these behaviors can diverge from those of innovators. 

One of the biggest challenges in innovation within a large corporation is that the structure of the company promotes taking the easy path instead of focusing on long-term innovation.

 This can cause employees to focus more on achieving short-term goals and rewards rather than having a mission for their work. In a startup, the mission is the first priority and this is something that can be lost in a larger enterprise.

New technologies, such as AI and blockchain, can bring excitement but it’s important to recognize that implementing these technologies in a large enterprise takes time and requires resilience.

What is the current attitude within Microsoft towards crypto and blockchain, considering the bear market and the recent events with FTX?

The behavior seen on Twitter as a result of the massive fraud committed by FTX is an unfortunate result of people using the crypto industry for their own personal gain and to the detriment of consumers.

This type of behavior can harm innovation in the industry and lead employees to question why they should continue working in the field.

The lack of oversight and regulations in the crypto industry can change the industry and cause a desire for more regulations, but it is important to remember that instances like FTX are not the norm and are not a part of the design of the industry. Those who believe in the importance of technical innovation will continue to work in the field, understanding that these incidents are aberrations.

Tell us about your involvement in the Ethereum Enterprise Alliance

In 2016, the Enterprise Ethereum Alliance was founded to create compatible and aligned Ethereum stacks for the enterprise sector, using Quorum as a template for a standardized enterprise-class stack.

We have continued to guide others towards this standard and have recently welcomed more crypto-native companies to participate in our work.

Going forward, we anticipate that the need for privacy and privacy enablement will become increasingly important in the enterprise sector, so the Enterprise Ethereum Alliance will focus on this topic and take a point of view on it.

How has the perception of using blockchains in enterprise systems evolved over time, and what was your perspective on the shift from private internal blockchains to tooling solutions, such as Microsoft’s approach?

I think technology can be helpful or harmful. It can be hard to see how a transactional system with sidecar storage works in a distributed system outside of a company. Some may question if it’s necessary to use it in a company when there are better options available. This lack of understanding can lead to issues like censorship and corruption. In the consortium space, there’s also confusion around governance.

People may not understand that blockchain technology is not like a database and this can cause problems with systems integrators. When people are first introduced to blockchain technology through products like Hyperledger Fabric or Corda, they may not fully understand it. Even companies like IBM have expanded to include other products because of this.

I remind my teams about the limitations of transactional blockchain systems and the potential for abuse when giving them options or opportunities.

How did you choose IPFS over something like Arweave, as an example?

I have been in the space since 2015 and have known about IPFS for a long time, finding it to be a fascinating technology.

I have continually reevaluated our technical choices and have considered other products like Arweave and Textile, but ultimately found that IPFS is the best fit for our needs and our application stack.

We are using IPFS in a private context, with the privacy switch turned on, and have implemented controls to ensure resilience and to connect it to our private network using Tessera.

It’s always fascinating to observe how protocols are applied in real-world scenarios, so that’s exciting. Additionally, you briefly mentioned your work with cloud technology. Can you explain your approach toward utilizing the cloud and blockchain technology together?

I described a client application in an enterprise that’s in a cloud organization from a supply chain perspective. We fully embraced the idea of using distributed systems to work with end-tier suppliers. We also have regulations around the country of origin and anti-slave labor. To build this, we need to think beyond just our enterprise and use distributed systems as a valuable tool.

To reconcile cloud with distributed systems, we need to be careful and maintain the capabilities of a system that runs well in cloud while also maintaining the qualities of a truly distributed system. We can facilitate this by having multiple customers run in our cloud, but ideally, we need to provide the utility for those who want to be on-premises or in a different cloud.

Microsoft is a Web2 giant producing software, consumer electronics, personal computers, and related services.

Yorke shares his experience working at Microsoft in a strategy and transformation role in blockchain and Web3 technology, specifically focusing o...

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