Following a live successful preview of the technology between two persons speaking in English and German through Skype, Nadella told an audience at the ongoing Microsoft's Worldwide Partner Conference 2014 that he hopes to preview the technology by the end of the year.
Such a path breaking technology, he said, would transform human communication. This, he said, would break the language barriers for people across the globe and this increase productivity.
In a country like India, which has over two dozen official languages and people speak several hundred languages, such a technology could come as a great tool of communication.
However, Indian-American Nadella, who speaks Telugu and comes from Andhra Pradesh, did not identify the languages in which the Skype Translator would be rolled out.
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In his key note address, Nadella said such technologies are part of Microsoft's effort to "empower everyone to do more and achieve more".
"We will reinvent productivity to empower every person and every organisation on the planet to do more and achieve more," he said.
Many described the new technology from Microsoft as game changer.
"Skype realtime translation looks like a game changer (expect public preview by the end of the year)," said Jaoa Lopes.