Microsoft GM on service focus

Earlier last week, Microsoft announced a substantial reorganisation of its top management into three divisions. With that as a backdrop, Martin Taylor, general manager of platform strategy at Microsoft, talked about the company's reorganisation and said it should not be viewed merely in terms of the competition against Google and Yahoo.

How do you see the platform division changing when it shifts from Jim Allchin, a techie, to Kevin Johnson, who headed sales?

(Johnson will take over the division when Allchin retires late next year.) I'm grinning, because I have some history on this discussion. When I was working for [CEO] Steve [Ballmer] doing customer [satisfaction] stuff, I did profiling at a bunch of different companies both in and outside the industry. I basically found the top 25 companies around the world that had the highest customer [satisfaction] index.

I did a deep analysis. One thing that was consistent in almost all of them was the leaders of their divisions had some level of customer-facing role. There were very few companies that did not have a leader who didn't have some level of customer-facing responsibility. It was interesting insight, because you learn empathy.... So I do remember actually saying to Steve, 'Hey, maybe we should put a check box for senior executives, on a go-forward basis, that they have to have some customer-facing role somewhere in their career. It doesn't have to be the only thing that they've done, but they need to do some turn in terms of building customer empathy, building customer connect, understanding the customers' issues.

There's been a lot of discussion about whether Microsoft has been as nimble as some of its competitors. Do you feel that bureaucracy was a problem, and if so, will the reorganization help to address it?

I know I always want to do stuff sooner, quicker, better. I don't know how much of [any inability to do] that is due to bureaucracy and how much of that is just due to organizational structures, how much of that is due our size, how much of that is due to impact on other parts of our business when we do things.

I got an e-mail the other day from a customer who said, 'Hey, I made the move. I switched over from Linux to Windows.' So I sent the team a note, 'Hey, when can I run this as an ad?' And the time that they told me it would take to get it from this e-mail to an ad was -- I almost wanted to quit. But I don't think that's bureaucracy. We're just a big company with different moving parts.

I do think this [reorganization] allows us to continue to get better integrated in some ways, and I think this actually allows us to work left to right across our businesses a little bit better than in the past.

How so? You're keeping your seven profit-and-loss centers (P&Ls) and adding a layer between the heads of those groups and the CEO?

We're going to continue to report financially on the seven P&Ls and so forth. But say the Windows platform and Windows server people were having a fight on who should do what.... Even with the seven P&Ls, that still met at Steve [Ballmer] to some degree, or it met at Jim [Allchin] if it's a hard-core technical issue. And now with Kevin [Johnson], you can say that thing can meet in a level below Steve, to [enable the company to] be a bit more nimble.

Do you view the competition against Google and Yahoo primarily as a consumer play?

Obviously, today we normally bump into Google from a consumer orientation. But we don't think that's the only place we're going to see Google. Gmail is a consumer play, but we can start to see where some smaller companies can base their software on Gmail in some ways.

Are you watching the enterprise space?

When I read some of the coverage and discussions around the reorg, people were putting it in the context 'to better compete with Google or Yahoo.' What we want to go do around services does not have anything directly to do with Google or Yahoo. In some areas, it might. But in other areas, it doesn't. It's just a matter of us looking at what the demands are.

There is a shift that we're doing, and this is some of the stuff that Ray [Ozzie] is going to do from a technical perspective across the different business units. I wouldn't say it's directly related to Google or Yahoo, but it has a lot to do with a services play. It's really about how you think that [services] should and could exist in the cloud that will benefit IT. There's also a desire on our side to say how we can deliver more from the cloud. A couple of examples are if I had a choice to basically do centralized security patching from the cloud or do some level of storage.

Where do you see Google and Yahoo in that space?

Search in some ways, storage in some ways. They're offering some rackable Google storage to some customers in different areas. But this is less of a Google and Yahoo discussion, at least the way I think about it. It is more, 'Hey, how do we think of the evolving role of delivering software and then, more importantly, supporting and managing technology for our customers in a way that we can deliver in a more online fashion versus the more traditional model of having things local and resident?'

What about the model?

I wouldn't put everything that we do in the context of 'who are you going after,' 'who are you competing with.' It's more, 'what do we see our users needing and wanting, and how do we think that we can best serve them both on a short-term and then on a longer-term basis, and what are the things that we need to do to go drive in that direction?' The FrontBridge acquisition [bringing Microsoft a managed service provider for corporate e-mail spam filtering and antivirus protection] is directly in line with this desire to really provide more services to customers through the cloud, and that has nothing to do with Google, Yahoo, or anybody like that.

This is what Ray [Ozzie], from a technology perspective, is going to be spending time on, and then all of our business units will be thinking about what role they have. So there's an opportunity for Office in that space. There's an opportunity for our mobile things in that space. Take a mobile device. You want to make sure policy can get pushed down to it, you can wipe it clean if it gets lost. There's opportunity for [the business units] to be more participatory in this more services-oriented model.

Was the driving force behind the reorg a recognition that services need to play a bigger role?

I think the driving force was just our need to continue to improve, our need to say 'Hey, what do we want to do? How do we get the right people in place to be able to move the business faster and go across the businesses a little bit faster?' Then, obviously, we do think that we've got an opportunity to do more from a services orientation. And getting Ray [Ozzie] involved in that is exciting for us.

Don't confuse this with this ASP-hosted software delivery. It's not as simple as saying, 'We'll take Office. It used to run local. And now when we want to use it, we'll download the bits and use it and then give the bits back up when we're done.' It's actually more, 'What are a set of things that we can deliver to IT, to developers and consumers or whatever from the cloud?' And that could be different sets of services. I think FrontBridge is probably one of the best examples.

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