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How Microsoft can get cool factor back: Analyst

Microsoft's new real-time language translator for its Skype video call service shows the software giant can once again be a groundbreaker, tech analyst David Garrity told CNBC on Wednesday.

"You can machine-translate 40 languages to each other," the principal at GVA Research said in a "Squawk Box" interview from the inaugural Code Conference, where Microsoft demonstrated the technology Tuesday. "It probably wouldn't be a stretch to see them basically have an app … rolled out on to Windows-powered smartphones."

Cautioning not to expect an app this year while the translator is in beta, Garrity said he still thinks smartphone capability would be possible as soon as next year.

Read MoreMicrosoft CEO talks 'post-post PC world'

"This indicates to me that Microsoft is doing some very interesting things in terms of technology, despite what people say," Garrity said.

Microsoft's new CEO Satya Nadella introduced the voice translator at the Code Conference. During a Re/code interview on stage there, he also described a future software environment built around people rather than devices. Data finds the user, rather than the other way around, he added.

Read MoreSix key takeaways from the Code Conference

The key to the future, Nadella said: "We need to build something big … the next big thing." But he didn't tip his hand on what that might be.

Read MoreGoogle's driverlesscar: Good news for bad drivers

Disclosure: CNBC's parent NBC Universal is an investor in Re/code's parent Revere Digital, and the companies have a content-sharing arrangement.

By CNBC's Matthew J. Belvedere

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Re/code

  • Co-CEO, Revere Digital; Co-Executive Editor, Re/code; and Co-Executive Producer, The Code Conference. Re/code is part of the CNBC network.

  • Co-CEO, Revere Digital; Co-Executive Editor, Re/code; and Co-Executive Producer, The Code Conference. Re/code is part of the CNBC network.

Re/code

  • Co-CEO, Revere Digital; Co-Executive Editor, Re/code; and Co-Executive Producer, The Code Conference. Re/code is part of the CNBC network.

  • Co-CEO, Revere Digital; Co-Executive Editor, Re/code; and Co-Executive Producer, The Code Conference. Re/code is part of the CNBC network.

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