Microsoft CEO Satya Nadella on the enterprise of Windows

We’ve bought a particular episode of Decoder at this time — I’m speaking to Satya Nadella, the CEO and chairman of Microsoft. Satya’s all the time been one among my favourite tech execs to speak to, and Microsoft has some massive information for us to debate: it introduced Windows 11 yesterday, which comes with an all-new design, a bunch of latest options, and the power to run Android apps.

That’s all wrapped up in some massive adjustments to how apps are distributed on Windows: Microsoft is opening up the Windows app retailer, permitting builders to place extra sorts of apps within the retailer, and it’s permitting builders to bypass the charges within the retailer in the event that they need to use their very own fee methods.

If you’ve been listening to Decoder, you understand there’s a whole lot of controversy about Apple’s App Store charges and the management it has over builders on its platforms. There are lawsuits, there are payments in Congress, and there are sad Europeans. Nadella and Microsoft are explicitly positioning Windows as the alternative, saying it’s extra open and that the purpose of Windows is to permit different corporations to construct massive companies and platforms of their very own with out Microsoft getting in the best way.

If you suppose that appears like a reasonably intense function reversal for Apple and Microsoft, properly, you’re not unsuitable. Twenty years in the past, Microsoft was going through down regulators whereas the Mac was the extra open platform. But I used to be curious how Nadella felt about it, how he thinks about Windows as a platform and what Microsoft’s duties are, and the way he thinks the varied antitrust payments in Congress will have an effect on Microsoft’s plans for the longer term. And I undoubtedly wished to know in regards to the choice to run Android apps on Windows.

A pair notes: Satya talks about Azure and “the edge” quite a bit. Azure is one among Microsoft’s cloud computing platforms that competes with Amazon’s AWS and one among its greatest and most essential traces of enterprise. And if cloud computing is about computer systems far-off from you in information facilities, the sting is in regards to the computer systems closest to you — like Windows PCs.

Nadella additionally mentions “aggregators” within the context of the Windows retailer. He’s speaking about locations within the person interface the place a lot of folks present up and are directed to the opposite apps and providers they want. This is a reference to Ben Thompson’s aggregation theory, which truly comes up on Decoder on a regular basis.

Other stuff you’ll hear him say:

• NUI, which stands for pure person interface, like voice and gestures
• POSIX, which is a set of working system requirements
• WSL, which is the a part of Windows that allows you to run Linux
• PWAs, that are progressive internet apps
• UWPs, that are Universal Windows Platform apps
• HoloLens, which is Microsoft’s augmented actuality headset
• Pat, who’s Pat Gelsinger, CEO of Intel

This one’s deep. I feel you’re going to love it.

The following transcript has been edited for readability.

Microsoft introduced Windows 11 at this time. There is quite a bit to speak about, however I need to begin with some private information, as they are saying. You solely not too long ago grew to become the chairman in addition to the CEO of Microsoft. What does that really imply to be the chairman?

The actuality is — as you understand — in relation to company governance within the United States at the very least, it’s actually the lead impartial director who has full authority over all the people who find themselves a part of the administration, together with me and my compensation and my performan.

Basically they rent and fireplace me. The impartial administrators are the oldsters who’ve the governance. If something, the best way I interpret any change right here is basically how can we convey the administration workforce and the board collectively round what’s Microsoft’s objective [and] technique? How can we maintain ourselves accountable as a workforce?

So orchestrating it, as someone greatest described it to me — possibly I ought to attend extra conferences, or extra committee conferences. But I consider this as only a pure outgrowth of what I’ve been doing for the final seven years. There’s no actual change, fairly frankly, across the rigor of company governance and who has really bought the rent and fireplace authority on the CEO. And that’s the impartial administrators of the Microsoft board.

You led proper into my subsequent query, which is — who’s your boss? To whom are you most accountable?

To the board of administrators and the lead impartial director in some sense, if you concentrate on it. If your boss is outlined as the one who finally can maintain you accountable, it’s the impartial administrators of the Microsoft board.

I ask each govt who comes on Decoder this query: what’s your decision-making framework? Microsoft is an enormous enterprise. You have a number of traces of enterprise, a number of billion-plus-dollar traces of enterprise. How do you make selections?

I attempt to simplify this. Maybe you and I’ve talked about this previously — I’ve had this framework which I’ve been in step with ever since I grew to become CEO.

It begins with mission, it ends with tradition, and in between [there is] what’s our worldview, what’s our technique. I consider the issues which can be fixed as that sense of objective and mission and tradition, and the issues which can be temporal are worldviews and techniques.

To your level in regards to the decision-making framework: something we do needs to be aligned with that first query, which is: is that this one thing that is sensible given who we’re as an organization? And extra importantly, if we go about doing that, does it add distinctive worth on the planet? Is that one thing that each differentiates us competitively and is that one thing that’s helpful for folks? That’s, to me, essentially the most useful method to [run] the companies we’re in.

When we are saying “what does the CEO do?” They have to select and select which companies you’re in. Then they should set requirements on what cultural values are expressed internally as skilled within the lived expertise. And so these are the 2 issues I attempt to return to on a regular basis.

Let’s speak about a giant choice. Several years in the past, you and I have been speaking and also you mentioned, “Windows, we could just rename it Azure Edge, if people would let us. It’s just an extension of our big business, which is Azure. We’re in a mobile-first, cloud-first world.”

In 2019, I feel you had mentioned to Wired, “The operating system is no longer the most important layer for us.” But at this time, Windows 11 was introduced. I listened to you and Panos Panay, who’s the chief product officer at Microsoft, focus on how the pandemic actually refocused your consideration on Windows and what it could possibly be.

Tell me about that course of, as a result of it does really feel like a giant shift.

All of these statements that you simply mentioned I’ve made earlier are all nonetheless true as a result of Windows doesn’t stay in isolation. Windows lives in a world the place there’s a whole lot of cloud computing.

There are a number of cloud suppliers and a whole lot of cloud computing. So something that could be a shopper working system finally does rendezvous with cloud computing. In that sense, technically and business-model-wise and utilization and experience-wise, it’s the cloud and the sting.

The billion-plus customers of Windows, for positive, we consider from a distributed computing structure perspective as the sting of Azure. And you possibly can even say the Windows of us would take a look at Azure because the cloud for Windows. So that’s, I feel, completely proper.

The different level is it additionally lives in an ecosystem. Let’s say Windows has a billion customers. So does Android. So does iOS. In truth, Android and iOS could have greater than a billion customers maybe, or possibly Android has 2 billion, [and] possibly iOS is just like Windows dimension or what have you ever. But the truth is any Windows person — we have now to start out with the belief that they’ve a telephone and that telephone could also be Android and iOS and we have now to design for it.

I do suppose that working methods are essential, however they’re essential in as far as they compose with every thing else that’s a part of my life, whether or not it’s different units with different working methods, [or] whether or not it’s clouds that I take advantage of, that are powering among the purposes and experiences.

It’s a sensible actuality, actually. Let’s meet Windows customers the place they’re, and meet their present wants and unmet, unarticulated wants.

You don’t suppose that the pandemic pushed Windows in a distinct path? That was very a lot the sense that I bought. Everyone is working from house, everyone seems to be looking at a Windows laptop computer for a lot of extra hours of a day than they could have been beforehand.

Absolutely. There isn’t any query about that.

What occurred within the pandemic, even for me — I didn’t have a house workplace. Suddenly, I discovered myself [saying], “Oh my God, not only do I need a home office. I have all my girls home and they need all their own independent PCs.” Without the PC, we wouldn’t be capable to do distant schooling, distant work, telemedicine visits. It grew to become mission vital.

All screens in life matter. So that realization that bigger screens on which Windows runs are tremendous essential, as a result of not all duties may be carried out on a cell machine, grew to become abundantly clear. We got here out of the pandemic with — I’d say — a renewed sense of why we have to do a few of our perfect work in serving [the] prospects we have now at this time.

That’s why I take into consideration enhancements to Windows Update. I need to have a good time that as a lot as any function as a result of it’s essential. It issues to our customers. They inform me in my inbox loud and clear daily about what all I needs to be doing with Windows Update, and I take that critically now.

I like the concept that you have been at house and your loved ones was at house and abruptly Windows Update bought actual for you, too. My workforce is all the time telling me that at any time when it’s about me, it turns into rather more essential. Was there any of that occurring?

Oh, for positive. Although I’ll should admit that the folks inside the corporate are much more accountable than ready for a CEO to have a private expertise. We have higher methods, higher accountability [than that[.

But that said, if I go back to your decision-making framework [question], I feel I’ve a greater appreciation popping out of this pandemic about Windows’ function on the planet. As an ecosystem, as an working system — what ought to we accomplish that that we’re serving the present prospects and their expectations? Windows Update being one [example]. And additionally, what ought to its innovation vector be given the place the world goes?

That brings me to among the massive adjustments in Windows, that are basically about what sort of working system Windows goes to be and how much companies you may run on it and how much enterprise will that be for Microsoft.

There is a brand new person interface. The Start button is within the middle of the display screen. There’s beauty variations. But you’re additionally permitting Android apps to run on Windows. You are integrating the Amazon Android app retailer. You’ve made some adjustments to the shop economics. You’ve diminished Microsoft’s reduce to 15 %. That’s compared to the very controversial 30 % that Apple prices.

Then you’re saying to builders, “You can be in our store and you can not pay us a cut at all if you want to use your own payment model.” How a lot of that’s opportunistic adjustments — you’re seeing all of the controversy and also you sense a market alternative? And how a lot of it’s this being the proper method to shift what you are promoting”?

I feel it’s pushed by competitors. What I imply by that’s – what ought to Microsoft do to handle the platform and the platform guidelines such that we will thrive in that function?

The approach I’ve interpreted what platforms do is: they should create alternative for individuals who construct on the platform.

That’s the best way to maintain a platform related. If you’re creating an awesome alternative for others to be born in your platform and scale in your platform — that’s the Microsoft I grew up in. That’s the Windows I grew up with. Whether it’s the Adobe of us creating their Creative Cloud or SAP constructing their ERP [enterprise resource planning] enterprise. Or in at this time’s world, whether or not it’s Discord constructing their neighborhood for players on Windows or some other enterprise.

To me, how can we make Windows extra vibrant going ahead?

I sense an actual alternative, as a result of the opposite two ecosystems which can be at scale, for their very own internally constant set of causes, have conflated — at the very least in my thoughts — the platform and the aggregation layer with one algorithm. There’s no purpose why there needs to be one algorithm. They may be disaggregated.

After all, we do have a retailer. We do have commerce. You can use all of it or you may convey your personal. That’s [a] sensible factor for Microsoft to do.

I’m not even attempting to make some worth assertion that Microsoft is virtuous right here and others should not. Others have chosen it for no matter causes they’ve. This is a design selection and a enterprise mannequin selection. I need to make our personal set of design and enterprise mannequin decisions in order that creators discover extra selection.

That’s competitors. I’m going again and say, “It’s time to compete.”

You talked about the opposite two platforms at scale. That’s clearly iOS and Android. Then you talked about the internally constant causes for his or her selections. Apple has been fairly clear about its internally constant causes for saying the shop extends throughout its total platform. The loudest purpose is that that is how Apple pays for giving the software program away without spending a dime. Everybody will get iOS updates without spending a dime over the lifetime of their telephone, [and] the telephones final a very long time. To pay for all of that innovation, and software program, and safety updates, and all these issues, Apples takes a reduce of what occurs within the retailer. That’s Apple’s enterprise mannequin.

You additionally give Windows away. If I’ve a more recent PC, I’m simply going to have the ability to replace to Windows 11 without spending a dime. How do you pay for these updates in the event you’re not going to take a reduce of every thing?

We have totally different enterprise fashions. In many circumstances, we have now subscriptions. We even have OEM royalties. Apple clearly has machine gross margin. I feel everybody finally has to have a enterprise mannequin that enables [them] to pay for what they do. I feel it’s only a query of, the place are you monetizing and what are then the foundations on which basically others can monetize? They should be long-term secure.

In our case at Microsoft, I’ve all the time felt that, at the very least the definition of a platform is: if one thing larger than the platform can’t be born, then it’s not a platform.

The internet, it grew up on Windows. Think about it. If we mentioned, “All of commerce is only mediated through us,” Amazon couldn’t exist, if we had in some way mentioned, “We’re going to have our own commerce model.”

Therefore I feel every firm has to decide on and see what aggregation layer, what platform layer, [and] what guidelines work for them and their ecosystem. But, in our case, it’s very clear to us that we do need to remedy for a similar safety points, [and] discoverability points, as a result of that’s one of many the reason why we’re emphasizing the shop.

At the identical time, the shop can be utilized at totally different ranges by totally different creators. We need to have that flexibility be a aggressive differentiation.

You talked about guidelines. Let’s say I’m VP of The Verge at Microsoft. My purpose for the 12 months is to extend Verge signups by 30 %. The easiest method for me to do this is to go to the Windows workforce and say, “Every time you open Windows, show people The Verge. Push them towards a signup to The Verge.” This is a stress that each working system feels. Windows has actually felt this push and pull. The Edge workforce needs Edge to be the default browser in Windows.

How do you steadiness that inside stress in opposition to desirous to be an open platform the place rivals can succeed in opposition to Microsoft’s personal merchandise?

There are two various things. One, you curating a set of experiences that work properly with one another, after which permitting for another person to curate an expertise that maybe is a substitute to one thing. [Do] you permit that solely via your retailer or different guidelines, or is that one thing that may occur impartial of you?

Take the browser, which is at this level fairly foundational. We, in fact, have a browser. It is default. But you don’t have to go to Microsoft. You can go to Google and obtain their browser, or you may go to Firefox and obtain their browser. In some sense, [that’s the] skill to have each company as a client to instantly select, and on the similar time, preserving our proper to curate and, fairly frankly, the appropriate of others to curate as properly.

We need to be a platform for platform creators, not only a platform for different folks’s apps. That’s the delicate distinction we need to name up, which is: I would like us to do an awesome job of being a platform. That means all of the issues platforms do. We’ll have a retailer. We’ll have our personal defaults. We will curate stuff. But if someone else can are available in and create a lot of worth on our platform and use it as the bottom infrastructure, [at the] OS degree, so be it — together with the shop.

By the best way, that’s how we run our cloud. It’s not like that is that totally different to us. We have layers within the cloud from the purposes all the best way to infrastructure. Different utility distributors and firms use it in numerous methods.

It’s humorous that you simply introduced up browsers. Microsoft famously fought an antitrust battle about bundling the browser with Windows and setting it because the default. It looks like the foundations of the street there are a bit of bit clearer. There is a whole lot of historical past about browser defaults in Windows. What about locations the place it’s much less clear? Do you will have inside guidelines? Do you will have a tradition that claims, “Okay. We can set a default, but the Windows team needs to build the hooks for other platforms and other services to be defaults”?

Absolutely. There isn’t any query. But, to start with, no matter we realized out of our case within the ‘90s implies that you simply have to be an open platform. There are sure issues which can be constructed into the working system. If there are issues which can be impartial of the working system, then others can completely substitute with out compromising the integrity of the system.

Even communications — whether or not it’s Slack, or Zoom, or the rest — [they] may be top notch on Windows. In some sense, we don’t have that restriction that different folks’s software program in its full glory can’t be accessible on Windows. We do have distribution benefits, however that doesn’t imply that different folks don’t have their very own distribution benefits. For me, at any time when I go to some Google web site, they’re very clear about their distribution benefit, even on a Windows PC. There is simply no method to escape that, and that’s okay.

How many Google websites do you go to in a day?

Probably YouTube, I feel, is the one that almost all typically comes up on my Bing search.

Speaking of Google — you’re bringing Windows nearer to Android. That’s been occurring for a while. One of the most important bulletins of Windows 11 is that Android apps will run instantly on Windows. What have been the professionals and cons of that call?

Interestingly sufficient, the Windows structure’s all the time had this. You can have a number of personalities in Windows. In truth, I keep in mind after I first began at Microsoft, I used to be evangelizing the POSIX interface on high of Windows NT. And now one of many favourite options of Windows for me is WSL. I adore it. The new terminal, and the truth that now we even help the total Linux UI on Windows. Linux is now top notch on Windows, and Android is simply one other subsystem. Now we will help these a number of personalities.

The choice for us was — what’s the easiest way to each permit for extra purposes to be accessible to our customers? How can we add worth to the 1.3 billion [Windows] customers who might want extra purposes? That’s one aspect of it.

The different aspect of it’s to create extra alternative for individuals who have constructed Android apps by exposing them to this billion-plus person base. I feel that each side profit from this, and it was a reasonably easy choice to go allow that. And now it’s going to be pushed by what’s the adoption, what are the use circumstances, what apps do they need to use which can be Android on Windows versus PWAs versus UWPs and what have you ever. We are going to take that method, the place we welcome all apps.

What was the very best argument you heard in opposition to it?

I feel all the time the argument will probably be, “do we have to have a consistent app model?”

Because if you concentrate on innovation — is there’s some form of NUI and even an AI chip that we need to gentle up? How can the APIs of that be lit up in such a approach that this utility can benefit from it? When you will have a number of subsystems and a number of app fashions, are you able to floor your platform system-level innovation such that each one apps gentle up?

Thatis going to be the elemental problem in such a world, however we really feel that there are methods. One of the methods I take a look at that is you may gentle an Android app or a PWA app or a UWP app on Windows sooner or later, and even at this time, for among the new AI APIs.

At Microsoft we construct for iOS, we construct for Android, we construct for Windows. That’s one among [our] basic challenges. We’re attempting to be sure that as builders, we will leverage as a lot of the frequent code base, as a lot of the cloud, however on the similar time, be native on every platform.

Android apps now run on Android, they run on Chrome OS, they’re going to run on Windows. Do you see them changing into form of the bottom frequent denominator utility surroundings for a developer that simply needs to hit every thing, with out a few of these alternatives that native improvement brings?

I feel whether or not it’s the internet or Android, [it] will get you to a number of locations sooner, and you then optimize on these platforms primarily based on what your customers let you know, as a result of the very last thing anyone needs is an app that’s there, however no one’s utilizing, or no one’s liking. Therefore, finally, it needs to be aggressive.

We’ve lined [Android apps on ChromeOS] quite a bit. It’s not nice. What’s going to make this nice?

I’m principally involved in seeing what app builders begin doing as soon as they’ve traction on Windows with an Android app. Are they then going to increase it to benefit from some native functionality? Is simply the system-level work we have now carried out, with all the issues that it inherits, going to make it potential?

How do I get, let’s say, The New York Times app or The Wall Street Journal app , after which see it alongside, say, some PWA app? [With] all the windowing work, it really works superbly. Now the query is, what’s the expertise for the customers? And they’ll vote with their clicks.

You’re a accomplice with Amazon to distribute Amazon apps. You mentioned on the occasion different Android app shops are welcome to take part in delivering to Windows. The Amazon Appstore proper now’s fairly centered on Amazon’s personal Fire tablets and merchandise.

It’s… wonderful. I’d not name it nice. It actually doesn’t have the amount that the Google Play Store has for Android apps. Are you anticipating that it’s going to get higher? Do you suppose it’s adequate now? Tell me about that partnership.

I feel it’s a great place for us to start out, and I hope that extra builders even take a look at Amazon Appstore as a method to go attain extra customers. I’m hoping that advantages them and us. And as I mentioned, if this works, I’d hope that even Google will check out it, proper? If they really feel like this can be a approach that they will improve the utilization of Android apps, we’ll welcome some other app retailer.

And, in fact, there are components of the world the place already there are lots of substitutes to the Android app retailer, which [are] even larger than the Google app retailer. And so we’ll see what occurs in that dynamic as properly.

You’re passing via Amazon’s app phrases. You’re not getting in the best way of that relationship. It’s their retailer. If Google reveals up, they might have their retailer and their very own economics. Would you then anticipate the phrases there to be aggressive? Are they going to battle for builders?

That’s truly an enchanting query. That’s the factor, proper? The world has not seen that — aside from maybe on Windows, the place you will have Steam and now you will have Epic. You have our retailer. There are a number of marketplaces and there needs to be competitors in marketplaces.

It’s form of like there are a number of working methods, and on any given working system, if there are a number of marketplaces which can be all vibrant and competing, how will it look? You’ve seen it in gaming on Windows. I’m hoping now we’ll see it at scale on all classes.

You’re taking Microsoft’s app retailer reduce down to fifteen %. It’s 85 / 15. What do you present builders for that 15 %? What’s your argument that builders ought to pay Microsoft the cash and never roll their very own [payment systems]?

It’s the invention. It’s the app verification. It’s all the issues that one expects in an app retailer at this time that offers you the peace of thoughts that someone goes to curate the apps, take a look at the safety of the apps, after which make it straightforward so that you can discover the apps you need. Then, in fact, the commerce capabilities. And there’s actual prices related to all of that.

We don’t consider the app retailer as an impartial enterprise. It’s form of a utility that will increase the worth of the working system at this level. App shops very a lot have to be a part of working methods at this level. We don’t in any respect disagree with that. It’s only a query of — ought to there be competitors and suppleness? And even there, we simply have our guidelines. Other platforms might produce other guidelines, and customers will select.

As you and I are speaking, there are antitrust payments in Congress being debated proper now about digital marketplaces. Some of them are very focused towards the Apple and Google ecosystems. Others are concentrating on different components of the tech stack. Do you suppose Microsoft goes to come back beneath fireplace for the issues it does with Azure or the issues it does in Windows?

Whatever guidelines they give you will apply to everyone who’s an business participant. So very a lot so, Microsoft will probably be half and parcel.

The query is what finally passes into regulation. And then, we take a look at the place Microsoft is in relation to all of that. I feel that in the event you step all the best way again, digital know-how is available in these two flavors. There is that this taste — I’ll name it an element of manufacturing, that it’s an enter to someone else’s creation. And there’s one other taste the place I’ll name it issue of distribution, for lack of a greater phrase, the place it’s about matching provide and demand.

An working system is definitely an enter to someone else’s creation. An app retailer is extra a distribution functionality. You mix the 2 and arrange guidelines that then have their very own second-order results round what’s taking place with the aggressive ecosystems round you. So I feel that’s the place persons are going to have a look at it from a legislative perspective and say, “Hey, what set of rules allow for the most amount of surplus to get created in the broader economy?” And that’s a great factor.

I feel competitors has all the time been the very best factor that helps capitalism transfer ahead, and we will probably be topic to the identical algorithm that everyone else will probably be.

You talked about ecosystems, and I need to ask you in regards to the broader ecosystem that Microsoft performs in. Most folks don’t expertise Windows on Microsoft {hardware}. The Surface merchandise are nice, however most individuals expertise Windows on different corporations’ laptops with different corporations’ chips in them. Some components of that ecosystem are doing nice. Some components are lagging behind.

I’m curious the place you see the Intel relationship and their roadmap versus all the stuff you would possibly need to do with customized AI {hardware} and the opposite options you’ve mentioned.

First of all, to us, the Intel relationship is fairly vital, and we’re enthusiastic about Pat [Gelsinger, Intel’s new CEO] and his workforce and their innovation roadmap, and we will certainly deeply be partnered with them, and so will we with AMD and Qualcomm.

One instance: the PC has all the time stood for that very broad design floor space by way of what might one do, whether or not it’s silicon innovation, board-level innovation, ASICs, the best way they will get assembled, what Nvidia has carried out with GPUs. That is what led us to construct superb gaming PCs, superb laptops, desktops, what have you ever.

I feel within the subsequent 10 years, after we take a look at it — what’s the system on bundle that Pat likes to speak about? I’m very enthusiastic about it. What goes to be the extent of innovation that’s going to come back about that may permit us to rethink the working system, lighting up on that, after which there to be vibrant competitors and innovation? I take a look at Intel innovating, Qualcomm innovating, AMB innovating, and Nvidia innovating, and say, “I want to do a great job of bringing all that innovation to life through Windows, and then surfacing it to developers.” You convey your UWP, you convey your PWA, you convey your Android app, use Windows to gentle up on that silicon innovation.

That’s the chance I see. And our OEMs at Dell and HP and Lenovo are enthusiastic about that.

Last query. You at present make one Android telephone, the Surface Duo. Are you going to make extra?

I need to construct out experiences which can be all the time pushing the shape perform. I like the best way you mentioned it instantly. [laughs]

I don’t consider [Surface Duo] instead to the telephone. Even although typically I dream about it as a telephone, it’s not a telephone. It does have telephone performance, however we wouldn’t have constructed it if what we have been attempting to do was a telephone. We have been attempting to see what’s subsequent.

I adore it as a result of it completely is my pocket book. It’s that Moleskine that I carry round with me in all places. I do use it as a telephone, however that’s distinctive. That’s not the use case. But my god, do I really like studying Kindle on one display screen and taking OneObserve notes. That’s form of my killer app. We constructed it for that. And I need to hold innovating on that. Whether it’s HoloLens and what occurs sooner or later there, or Duo and what occurs sooner or later, I would like us to take pictures on purpose, on adjustments in kind and performance.