The Rebirth Of Microsoft – How Satya Nadella Saved It (Or Did He?)

The Rebirth Of Microsoft – How Satya Nadella Saved It (Or Did He?)


Microsoft today is a company on the rise,
with its reach ever expanding into new industries. But less than a decade ago, Microsoft had
a very different image: one of stagnation, bureaucracy and decline. The recent reinvention of the company has
been a lesson for the history books and in this video we’ll see how it happened. This video is brought to you by Dashlane. Never forget your passwords again by registering
with the link in the description. For most of Microsoft’s history it was Bill
Gates who was at the helm. It was under his guidance that Microsoft first
conquered the operating system market and in fact he was so successful that the US government
almost broke Microsoft up. But after 25 years of leadership, Bill eventually
stepped down and the man he chose to replace him well, he had a much more different vision
for Microsoft. Steve Ballmer was not a technology guy: even
though he was the 30th employee hired at Microsoft and had been around for decades, he had worked
in departments like business management and sales. In Steve’s eyes it was these departments
that were responsible for Microsoft’s success and so he did his best to reorganize leadership
around the business people instead of the technology people. As he himself put it, he wanted to “break
up the technology fiefdoms,” which in his view were spending ridiculous amounts of money
trying to develop new technology without any idea whether it would be beneficial to the
dominance of Windows in the PC world. Steve saw that Windows worked and he tried
to promote it as much as possible. That’s why the biggest move in his career
was the attempt to spread Windows to the mobile market, first through Windows Mobile and then
Windows Phone. In many ways, Steve was continuing the philosophy
Bill Gates had adopted two decades earlier: aggressive expansion and an outright war against
competition. Unfortunately, Microsoft was far too late
in the smartphone game, so Steve’s dream of making billions by selling phones never
materialized. If you look at a chart of Microsoft’s stock
price under his tenure you’re gonna see just how bad things were: even though Microsoft’s
revenue increased during this period, the loss of the smartphone market was just too
much. These years under Steve became a lost decade
for Microsoft and in 2014 when he announced his resignation, the stock jumped 7% on the
news: that’s how badly investors wanted him to go away. The biggest question then became who would
be his successor and everyone naturally assumed Microsoft would hire someone external to reshape
the company and to bring it back on the path of innovation. The answer, however, was exactly the opposite:
not only was the new CEO a longtime insider at Microsoft, he was in fact the leader of
one of the division Steve Ballmer himself created. Satya Nadella had been around in Microsoft
since 1998 and a decade later, when Steve Ballmer announced the creation of Microsoft’s
enterprise division, Satya became its executive vice-president. Of course, at the time nobody considered Steve’s
idea to push Microsoft into the enterprise business as viable. This was before Amazon Web Services had become
profitable and before the cloud had really taken off in the mainstream. In reality, when Steve saw that Windows Phone
wasn’t working he wanted to pivot towards else and enterprise was his idea. Unfortunately, this pivot began only a few
years before he was forced to resign, but internally, it was becoming clear that enterprise
was indeed the way to go. The immense success of Amazon’s cloud business
convinced Microsoft’s board that they should work in that direction as well, and who better
to execute that plan than the man in charge of Microsoft’s own cloud efforts. When Microsoft announced that Satya Nadella
would be the new CEO, the entire world was confused. To start things off nobody even knew who he
was: when you look at the search volume from Google Trends for his name you’ll see what
I mean. So out of nowhere, a rather unknown executive
becomes the CEO of Microsoft and unsurprisingly there’s a lot of skepticism around the decision. But then, something almost magical happens:
the stock starts climbing up after a decade of stagnation and Microsoft’s cloud computing
platform, Azure, starts growing rapidly and becomes incredibly profitable. Within a few years praise for Satya Nadella’s
leadership is coming from across the world as everyone believes they’re witnessing
a miracle. But the truth is that when Satya took over
from Steve, Azure had been in development for over six years and the enterprise division
which is now the bread and butter of Microsoft had been profitable even during Steve’s
time. Ironically, even though during Steve’s leadership
the stock price didn’t move, Microsoft’s net income more than tripled. So Microsoft’s rebirth at the hands of Satya
isn’t an economic one: the fact of the matter is that Microsoft was wildly profitable before
and continued being so after. What Satya did achieve was a philosophical
rebirth, and while that might not sound nearly as impressive, it’s actually just as important. When Satya took over, Microsoft was suffering
from decades of bad reputation, which was honestly very much deserved: from anti-competitive
practices to suppression of open-source development, there were very few people saying nice things
about Microsoft in 2014. And yet, the reorganization Satya enacted
after he took over had an incredible effect. Microsoft essentially did a 180 degree turn
on its philosophy: it not only embraced open-source development, but actively started supporting
it, so much so that one of Satya’s biggest moves was to acquire Github. It is extremely telling that in Satya’s
first ever speech as CEO of Microsoft, he didn’t mention Windows even once. In fact, during that speech Satya announced
that he’d be bringing Microsoft Office to iOS and within a few months he did the same
for Android. It turns out that in such an interconnected
world making friends is better than making enemies. Of course, none of what Satya gets credit
for today would’ve been possible without the groundwork Steve Ballmer laid a decade
earlier. While everyone is quick to praise Satya for
economic achievements he might not have been fully responsible for, we should recognize
his true contribution: taking decades of cutthroat aggression and transforming it into an attitude
of productive collaboration. And speaking of productive collaboration:
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description and use the code ‘businesscasual’. Anyway, thank you for watching. In case you somehow missed it I just started
an Instagram page, where I’m gonna share awesome side content and teasers for future
videos, so go and follow me there. We’re gonna see each other again in about
two weeks, and until then: stay smart.

Author:

100 thoughts on “The Rebirth Of Microsoft – How Satya Nadella Saved It (Or Did He?)”

  • U moron u r trying to lessen the Sathyas contribution…without sathyaa microsoft would have declined to worst….thnx to sathya….

  • Frank R. Haugen says:

    As a developer, I am almost always at odds with Management, who for all intents and purposes is like Ballmer: Good at business, bad at the nitty gritty.

    Ballmer however, was a flexible CEO, and wasn't afraid to pivot and change to meet the needs of the end users, because he is a first class businessman, but unfortunately a second rate innovator, so Microsoft was always reactive

  • Satya Nadella, where is the surface Phone?? Where is?? Nadella destroy the windows phones and mobile platform. I hate Nadella's strategy becose i hate IOS and Android mobile platform. Hey Microsoft, i want a new mobile device, i want a windows phone!!

  • Vignesh Balasubramaniam says:

    Microsoft is dead. It will die a tragic death. Windows will die, and the world will be a much better place.

  • Praveen Kumar says:

    Lol!!! Steve Ballmer is responsible for the downfall of NOKIA , ever since NOKIA started using Windows on their phones, NOKIA lost it's Value in the market. Kudos Steve Ballmer 👏🏼👏🏼👏🏼

  • Michael ODonnell says:

    As usual, decent material ruined by the production team with all their Artiste Wannabee "improvements" like irritatingly needless panning/zooming/fast-cut B.S.

  • Whites = Innovation + technical skills -> startups, small medium enterprise
    Indians = technical skills + politics -> large enterprise
    East Asians = technical skills -> underdogs
    (Only in the context of North American Tech Industry)

  • Steve Balmer was not late to the mobile market. Microsoft under Bill Gates had it tied up. They had the business mobile market and more and better mobile apps and development tools than any other. It took years for Android and Apple to get even close. It was a PC in the palm of your hand. However, Steve, against the kicking and screaming of everyone else, decided that Zune, a gaming platform was the way to go, and the Windows Mobile apps were incompatible. So, he started a Microsoft Store with no apps, and a poor OS that had glitz, and made it hard on anyone but Microsoft to write apps for it. At that point Apple was way ahead, but Microsoft's developers went to Android, which was more open than IOS and their store, which in turn provided the basis for Android development tools, which made Android #1 for the best apps.

    Then came along Satya who could only think Software as a Service, and crammed that down everyone's throat. He later backed off some because users left. He didn't save anything. He renamed Zune/Windows RT, and told everyone they were getting Windows 10 on their mobile devices, which is a lie. Until you get to a certain size, you are running Zune/Windows RT and Zune/Metro/Modern/Universal Apps, which have evolved from useless to weak.

    With Gates, the managers worked for the techies. Balmer thrived in this this market and Gates needed him for the management role. However, Balmer while cheer leading became convinced that he was the one who swung the bat that hit the home runs. What he proved is you cannot manage what you don't understand. Satya knows the technical leadership has been lost so he develops areas that don't require it, and point everything they make toward the Software As A Service environment because he knows Microsoft is losing the platform advantage. The problem with that is his market is slipping away to the innovators a little at a time, and Microsoft no longer has the on-fire talent it once did due to their own mismanagement.

    What changed Gates focus was Melinda and her family. I am glad for him. It was probably a little hard for him to let go at first, but I'd bet he is happy now that he made the move. No matter how much money he made, he was one of the most underpaid people in the world. The world owes him a lot.

  • Steve Balmer was not late to the mobile market. Microsoft under Bill Gates had it tied up. They had the business mobile market and more and better mobile apps and development tools than any other. It took years for Android and Apple to get even close. It was a PC in the palm of your hand. However, Steve, against the kicking and screaming of everyone else, decided that Zune, a gaming platform was the way to go, and the Windows Mobile apps were incompatible. So, he started a Microsoft Store with no apps, and a poor OS that had glitz, and made it hard on anyone but Microsoft to write apps for it. At that point Apple was way ahead, but Microsoft's developers went to Android, which was more open than IOS and their store, which in turn provided the basis for Android development tools, which made Android #1 for the best apps.

    Then came along Satya who could only think Software as a Service, and crammed that down everyone's throat. He later backed off some because users left. He didn't save anything. He renamed Zune/Windows RT, and told everyone they were getting Windows 10 on their mobile devices, which is a lie. Until you get to a certain size, you are running Zune/Windows RT and Zune/Metro/Modern/Universal Apps, which have evolved from useless to weak.

    With Gates, the managers worked for the techies. Balmer thrived in this this market and Gates needed him for the management role. However, Balmer while cheer leading became convinced that he was the one who swung the bat that hit the home runs. What he proved is you cannot manage what you don't understand. Satya knows the technical leadership has been lost so he develops areas that don't require it, and point everything they make toward the Software As A Service environment because he knows Microsoft is losing the platform advantage. The problem with that is his market is slipping away to the innovators a little at a time, and Microsoft no longer has the on-fire talent it once did due to their own mismanagement.

    What changed Gates focus was Melinda and her family. I am glad for him. It was probably a little hard for him to let go at first, but I'd bet he is happy now that he made the move. No matter how much money he made, he was one of the most underpaid people in the world. The world owes him a lot.

  • Steve Balmer was not late to the mobile market. Microsoft under Bill Gates had it tied up. They had the business mobile market and more and better mobile apps and development tools than any other. It took years for Android and Apple to get even close. It was a PC in the palm of your hand. However, Steve, against the kicking and screaming of everyone else, decided that Zune, a gaming platform was the way to go, and the Windows Mobile apps were incompatible. So, he started a Microsoft Store with no apps, and a poor OS that had glitz, and made it hard on anyone but Microsoft to write apps for it. At that point Apple was way ahead, but Microsoft's developers went to Android, which was more open than IOS and their store, which in turn provided the basis for Android development tools, which made Android #1 for the best apps.

    Then came along Satya who could only think Software as a Service, and crammed that down everyone's throat. He later backed off some because users left. He didn't save anything. He renamed Zune/Windows RT, and told everyone they were getting Windows 10 on their mobile devices, which is a lie. Until you get to a certain size, you are running Zune/Windows RT and Zune/Metro/Modern/Universal Apps, which have evolved from useless to weak.

    With Gates, the managers worked for the techies. Balmer thrived in this this market and Gates needed him for the management role. However, Balmer while cheer leading became convinced that he was the one who swung the bat that hit the home runs. What he proved is you cannot manage what you don't understand. Satya knows the technical leadership has been lost so he develops areas that don't require it, and point everything they make toward the Software As A Service environment because he knows Microsoft is losing the platform advantage. The problem with that is his market is slipping away to the innovators a little at a time, and Microsoft no longer has the on-fire talent it once did due to their own mismanagement.

    What changed Gates focus was Melinda and her family. I am glad for him. It was probably a little hard for him to let go at first, but I'd bet he is happy now that he made the move. No matter how much money he made, he was one of the most underpaid people in the world. The world owes him a lot.

  • Steve Balmer was not late to the mobile market. Microsoft under Bill Gates had it tied up. They had the business mobile market and more and better mobile apps and development tools than any other. It took years for Android and Apple to get even close. It was a PC in the palm of your hand. However, Steve, against the kicking and screaming of everyone else, decided that Zune, a gaming platform was the way to go, and the Windows Mobile apps were incompatible. So, he started a Microsoft Store with no apps, and a poor OS that had glitz, and made it hard on anyone but Microsoft to write apps for it. At that point Apple was way ahead, but Microsoft's developers went to Android, which was more open than IOS and their store, which in turn provided the basis for Android development tools, which made Android #1 for the best apps.

    Then came along Satya who could only think Software as a Service, and crammed that down everyone's throat. He later backed off some because users left. He didn't save anything. He renamed Zune/Windows RT, and told everyone they were getting Windows 10 on their mobile devices, which is a lie. Until you get to a certain size, you are running Zune/Windows RT and Zune/Metro/Modern/Universal Apps, which have evolved from useless to weak.

    With Gates, the managers worked for the techies. Balmer thrived in this this market and Gates needed him for the management role. However, Balmer while cheer leading became convinced that he was the one who swung the bat that hit the home runs. What he proved is you cannot manage what you don't understand. Satya knows the technical leadership has been lost so he develops areas that don't require it, and point everything they make toward the Software As A Service environment because he knows Microsoft is losing the platform advantage. The problem with that is his market is slipping away to the innovators a little at a time, and Microsoft no longer has the on-fire talent it once did due to their own mismanagement.

    What changed Gates focus was Melinda and her family. I am glad for him. It was probably a little hard for him to let go at first, but I'd bet he is happy now that he made the move. No matter how much money he made, he was one of the most underpaid people in the world. The world owes him a lot.

  • George Kokkos says:

    Was expecting a list of things he did to save Microsoft, not a story about how CEOs succeeded one another. downvoted

  • Steve Balmer is a snake and did his best to destroy Microsoft. Not intentionally of course but through greed.

  • Blows. 'Here's your magical Office 365. It really doesn't do anything except ass up your email and not sync your data from all the even more magical 'sharing' – we can fix it by selling you additional software, tho' – thanks, Microsoft.

  • what if i told you microsoft ceo satya nadella and adobe ceo shantanu are friends since childhood both were completed highschool studies from the same school

  • Satya is really doing a lot, I believe he is what Microsoft investors have been waiting on since Bill hung em up.

  • Actually what I feel like Microsoft's Purchase of Nokia's mobile division was the biggest disaster… Later in 2014, both Microsoft and Nokia changed their CEOs to Indian origin Satya Nadella and Rajeev Suri respectively. They both are graduates from same college here in India and just because of that both Nokia and Microsoft came back to the track again…

  • Satya Nadella definitely revived goodwill/respect for Microsoft amongst developers & techies and even end-users. So certainly well done to Satya Nadella, he is also doing great work for open source communities which is a crucial step towards technological progress for the whole humanity.

  • Duco Darling says:

    Packaging.
    Microsoft's greatest change was packaging.
    Not surprising though – from the OS that still has 20 year old elements in it.

  • Thiosemicarbizide Benzoyl Alcohol says:

    Wrong on all accounts, stock buybacks are their major revenue stream like IBM has done. The windows phone was the best idea, and without the practice of stock buybacks it would be strictly a software company only. The phone business was the money and once the money printing stops you will see a company with not as much to offer.

  • Google have sundar pichai.. Microsoft have satya nadela.. Both are indian. And some dumb pewds fans still racist to indians.. We indian always think global to develop mankind. Jai hind.

  • keivan sabbaghi says:

    I disagree with all the praise that Balmer gets in this video. I believe his strategy of shutting down – or reducing – innovation caused the stagnation for Microsoft. In contrast, what he said as a bad thing – wasting money on ideas that may not be profitable – is what had made Amazon what it is today, according to Jeff Bezos.
    As for the Azure, he almost missed the window on that too. The reason he didn’t see it bear fruit was the timing. Amazon stayed without challenge for 7 years -again Bezos call it a miracle.
    So, CEOs in my opinion should be gauged by what they didn’t do or missed and whether what they did was on time or too late.

  • not that long ago the pundits say Apple is on the rise and ms is on the way down. because of smart phone, fewer and fewer people will buy pc and windows, ms's cash cow will shrink. fast fwd to 2019, apple is in trouble while ms is getting better. ino, that is the ultimate irony.

  • Gyanendra Prakash says:

    Everybody love and use Windows because it's fully functional OS on the earth . You can do almost everything you want on a PC.

  • It isn't entirely philosophical. For one, Satya's management style has led him to form partnerships with other enterprise software companies like Oracle, VMWare, Red Hat, SAP, ServiceNow (Etc), bring xbox game pass to the switch, form partnerships with Sony and Nintendo so they can use Azure to support their game-streaming initiatives next gen, allow for Linux usage on Microsoft Cloud services, so on so forth. Just an entire shift to open source computing and development. This has driven tangible growth for the company. Ballmer would have likely never formed such alliances and partnerships. In addition, much of Microsoft's top and bottom line growth is fueled by subscriptions. Transparent, recurring revenue streams typically command higher price to earnings multiples on Wall Street, so the method of product distribution under Satya (Office + Dynamics 365, Azure, LinkedIn, Game Pass) is another factor to consider.

  • I still don't get why they're still around. They barely managed to produce anything useful.
    WinXP was great at the time. Win Vista was only the trailer for Win7, which was a huge step up to WinXP. Still crappy but now with aero design and 64 bit.

    Windows 8 and 8.1 were a failed experiment. And Windows 10 is a joke.

    And that joke is not even particularly funny.

  • Satya seems like Obama. I wonder how will this play out on the long run since we know soft Obama was a terrible leader for America.

  • You want to give Steve Ballmer the credit for profitability of Microsoft after he leaves because Azure existed during his tenure? When the next CEO is Satya Nadella, who led Microsoft in their cloud, server, and business solutions departments? Do some more research before halfassing these videos.

  • Ofcourse, what ever Satya Nadella achieved would not have been possible if Charles Babage didn't invent Difference Engine….

  • Venkat Rajvardhan Reddy Konda says:

    The video maker does not like Satya Nadella it seems if Steve Ballmer has been he must have been good so is the case with Satya else why would gates approve Satya as CEO

  • "Too late in the smartphone business?" Rubbish, the first Windows Phone was in 2005: before Android or iOS existed.

  • Idiot!!!! narator cant digest that a indian became a CEO and by his words can easily say how supportive he is to the americans!!!! F*** off my friend!!!!

  • Steve was the most stereotypical CEO I have ever seen. He constantly mocked and made fun of new technologies only to be past by these new technologies a few years later.

  • Pakistan zindabad says:

    South Indians rocks 🔥
    Google – tamilian
    PepsiCo -tamilian
    Microsoft- Telugu
    Adobe – Telugu
    Love from Pakistan to south India !!;

  • Microsoft went from crappy videogame consoles to crappy iPad ripoff Surface tablets and they STILL make a crappy operating system.Apple's OS is still better than Windows

  • I have a feeling that if Microsoft is the USSR Bill was Stalin, Ballmer was Krushchev and Satya will, in retrospect, turn out to have been Brezhnev.

  • Berdugong-Druglord Slash President says:

    Bring back lumia, develop itinto a full pledge windows 10 os with xbox live, zune and other failed products combined.. Get more app-devs to work in the windows store platform, steal apples shares in the mobile phone segment and voila.. the microsoft lumia’s greatest comeback!

  • justsomeguytoyou says:

    Regardless of who is running Microsoft, they'll always be around because of big business. Some companies simply don't want a Linux-based solution. Whether or not they will still be around long-term for the home user remains to be seen, as the sales of pc's continues to drop. They may reach a point where there simply isn't enough money in it for them to continue with non-business pc's

  • The guy who intended to break up microsoft died not long after, thats why it never happened. Microsoft, you dirty dog…

  • The Surface actually was responsible for the stock uptick. Azure was sad. We lost tons of money because of their "token" system without telling us they vanished after one year. Thanks Microsoft.

  • What do we learn from this yet again? Salesperson should NEVER be a CEO of a tech company. It has to be a technologist. Ballmer alienated so many tech people from Windows with his bizarre ideas… As a salesperson he was too shortsighted, stagnated and quite frankly – tech illiterate, to see the mobile revolution and take it seriously before it was already too late. Then he attempted to bring mobile interface to PC's which was the disaster we know as Windows 8 that hurt Microsoft's reputation far more than Vista ever did. Its clear he had no clue how to run the company.

    It was pretty similar story with Intel CEO Krzanich… He had no vision, yet he was praised by Intel investors for years who didn't understand the only reason he was "successful" as CEO at the time because there was no competition (AMD had just failed miserably with Bulldozer). So it was literally impossible for him to deliver bad results at the helm of Intel. But then, fast forward to 2017 AMD came back with brand new architecture and caught Intel totally pants down thanks to Krzanich's incompetence whose strategy was for years to just re-launch the exact same products with minor tweaks and price hikes after every new generation (just because market had no option, they had to swallow it). Not surprisingly, he got fired shortly after the board of directors understood just how badly he executed as CEO and how unprepared he was to respond to competition entering the market. Now Intel is under attack from both ARM and AMD and looks like its only getting worse from here.

  • Saibal Republic says:

    "500$ for a touchscreen ? That's no way Apple can appeal businesses and enterprises because it doesn't have a physical keyboard"
    I remember seeing a Ballmer interview I guess sometime in 2007 or 08 and this is what he said. He mocked Apple and it's large touchscreen model. Ironically , Windows Mobile was already a flop at the time and even Windows Phone failed like 5 years later. What however, did not failed at that time, was Apple. Not really a fan of Jobs personal character, but as a person with great ideas , he really stood out of the crowd. Genius , simply genius !

  • I suggest everyone here watch the video "Who really runs tech companies?" By youtuber Coreteks. It seems to me that Balmer is the "good management" type of executive and not the disruptive one

  • Hey dear Indians stop all Indian saga here. This people might be Indian origin but now they are fully American.
    Instead you guys start working for your country and create your own company.
    Work hard rather doing bullshit.

  • Steve Ballmer was dreadful for MS' reputation. Hmmm – vista, nokia… I think he is the one who gave developers at MS the authorizations to leave web interfaces incomplete and just use poweshell to do all the things the old gui interface could do with a click of a mouse.

  • I didn't like Microsoft for a long time for some reasons but not all including
    (1) Microsoft plays legal hard ball – Jscript, hololens etc.
    (2) The sales model they have are based around cyclical version releases – hackers target non-upgrades and put development behind a pay wall
    (3) Flip a coin operating system quality from version to version
    (4) .net was intrinsically built around windows form controls – a win32 api call for requests to the graphic processor which held templated shapes and markups such as winforms – even web had to be built and hosted exclusively in a win host, pre typescript acquisition when jquery was the backbone of your web application was just annoying
    (5) Exclusivity – those same controls are bound furthermore to IIS and need a windows server to host your microsoft sites or workstations with something that runs the .net CLR – at the time only windows hosts

    but they opened up to the world. They have a lot more free alternatives that offer upgrades to enterprise edition. Azure in my opinion is pricy but worth it, arguably best cloud platform. .NET Core released and reframed to be used on any machine or device with UWP and core redesigns – even the OS got a linux subsystem. I can spin up a windows swarm(or kube) with docker. They eliminated multiple tier home – enterprise – starter and just made 1 with an upgradeable option (the upgrade is worth it just for docker). Typescript acquisition was amazing for integrating with razor templating. Picked up PWA into an easy use on visual studio, always competitive MSSQLSERVER – good vision FDA just passed holo lens testing for surgical procedures and sugical training – they OWN the gaming market via xbox and PC….

    The list goes on but the jist is I've been around the block and back with microsoft and this is a new company that looks the most reliable over time to me. The decisions they make resonate with me as a developer, Super User and Basic User I constantly see critical features implemented methodically, cyclically ( in a good way this time – no pay wall for updates) and most importantly intuitively – any long term microsoft user can usually intuitively work their way through new patches both graphically and textually through whatever software is there. This is basically a brand new company in my eyes and no longer a microsoft hater.

    Best Devs World SMD facebook.

  • Videos are nice,but when you watch a bunch from a go you realize that they miss substance,they are like a extended trailer.peace

  • Satya Nadella is the BASTARD Who Dropped The BALL. Even if windows phone was not making money and causing MS sinking down, it was still better to stay with it and wait for fortune instead of doing a suicide.

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