REDMOND, 20 August — Microsoft is a company that’s hard to ignore. Love it or hate it, the fact is that Microsoft Corporation has changed our world. Its technologies and business decisions have produced global shifts in the way individuals and businesses function. Founded in 1975, Microsoft offers a wide range of products and services with a supposed mission to, “empower people through great software — anytime, any place and on any device.” How well the company is meeting the challenges of that mission is something that IT professionals argue about on a regular basis. Suffice to say that the way forward for Microsoft will be neither as apparent, nor as untroubled, as the path it took to reach its current global IT leadership position.
In the Middle East, the last year has been a tumultuous one for the company. Despite calls by Palestinian activists for a boycott of Microsoft products, the company’s profits in the region continued to rise. However, the open source movement has been attracting serious attention for the first time. In the past, Linux was an operating system known only to computer nerds. But this year, businesses and governments in the Middle East began asking for an explanation of the open source concept and serious investigations of Linux as an alternative platform have been launched by both bureaucrats and businessmen. While Microsoft’s marketing staff in the region continue to deride Linux, Microsoft’s top management in the United States have already shown that they are re-examining the open source threat.
Few journalists have been able to resist taking stands either in support of or in opposition to Microsoft and its technologies. That’s why when invitations went out to attend Microsoft’s first Middle East and North Africa media briefing at the Microsoft Campus in Redmond, Washington, there was quite a bit of discussion amongst the region’s IT and business journalists over whether or not to go to the event. Complicating matters was the problem many Arab journalists now face in obtaining visas to the United States. In the end the turnout was good, but the questions put forward by the journalists after the individual presentations could best be described as aggressive, and they were sometimes blatantly hostile. For its part, Microsoft had cranked up its PR machine, with its speakers sometimes obviously over-trained by media consultants and the scent of spin frequently drifting in a cloyingly nauseating haze over the proceedings.
The MENA briefing was held on July 22-23, just days after Microsoft announced revenue of $28.37 billion for the full fiscal year ended June 30, 2002, a 12 percent increase over the $25.30 billion reported last year. Microsoft’s management has predicted that corporate revenue for the coming fiscal year will range between $31.4 and $32 billion.
Specifically for the Europe, Middle East and Africa region, Microsoft’s revenue in the June quarter was $1.22 billion, increasing seven percent from the $1.15 billion reported in the fourth quarter of the prior year. According to a corporate statement, the majority of the growth was as a result of strong multiyear licensing agreements in the fourth quarter of fiscal 2002. Revenue growth in the region from Windows XP Home and Professional Operating systems and Enterprise software was “very healthy.” However, even Steve Ballmer, Microsoft’s CEO, admitted that Microsoft’s revenue from the Middle East is not proportionate with the percentage of the world’s population that lives there.
“I look at that as an opportunity,” said Ballmer. “I don’t look at that as an, ‘Okay let’s go get busy someplace else.’ I say, ‘What an opportunity.’ So we have to be at the leading edge in the Middle East and other developing areas in helping with computer illiteracy, of anticipating market needs and of participating in knowledge transfer to partners, etc., in the market... The elements are all there. There is a strong group of leading edge users. There (are) strong university institutions which are pumping out, as we say, very bright computer science graduates. We did a recruiting trip last year or two years ago, we started recruiting over in Egypt and we sent some people to do some recruiting. I think we hired three or four or five really class guys who will come join us. So the elements are all there.”
He continued, “We need to participate in the market and we will see growth. It might happen this year, it might happen in five years. It might be smooth over time, but the opportunities to me look like a good thing from a Microsoft prospective. If all markets were evenly developed, and they were all fully developed, and they all looked very mature, I guess I would have to be less optimistic about our prospects. So it’s a source of optimism for me.”
Ballmer was also asked to discuss the issue of whether Microsoft was going through a management restructuring and in what way this had affected the company.
He commented, “I wouldn’t say we are going through a restructuring. That wouldn’t be the right thing to say. And it has nothing to do with the recent corporate issues. I think any type of company that goes through the kind of period we did with both the DOJ (US Department of Justice) lawsuit and the dotcom bolt, we’ve got to do a lot of self-examination. It’s like that period in every human being’s life someplace, teens, twenties — everybody understands they grew up. We have gone through that phase. We are on the adulthood side of the equation. And we recognize the additional responsibilities and obligations that come from having our position in the marketplace.”
How does Microsoft plan to reflect its “newly recognized” obligations and responsibilities? In a presentation by Elizabeth W. King, general manager, Human Resources, Microsoft, specific changes in the company’s values were outlined. She called the process in which these changes were being created and implemented, “Growing Up Microsoft.”
King stated that Microsoft, the adolescent organization, had inherent beliefs and enthusiasm but few systems and processes, and rampant individualism and Americanism reigned. Microsoft, the adult organization, will be trying to stabilize and solidify. It will have a belief in the team and the customer. There will be more organizational consciousness and the company will take a more diverse global approach.
In one example of how Microsoft’s adolescence had hurt the company, King explained, “We missed regional innovations and talents that didn’t come from America. We didn’t specifically ignore them. We just didn’t capitalize on them.”
According to King, Microsoft had certain historical strengths that needed to be transformed into modern values. Top management determined that Microsoft’s historic strengths were: Intelligence, passion for technology, competitiveness, never-give-up attitude, honesty and self-critical approach, and powerful individuals.
But now teams of employees at Microsoft, have decided that the company’s values today must be:
— Integrity and honesty
— Passion for customers, partners, and technology
— Open and respectful with others and dedicated to making them better.
— Taking on big challenges and seeing them through.
— Self-critical, questioning and committed to personal excellence and self-improvement
— Accountable for commitments, results and quality to customers, shareholders, partners and employees.
There was curiosity about how a company like Microsoft could dump competitiveness as a core strength.
King replied to this: “What we need now is not competitiveness but accountability. Competitiveness for its own sake, just beating the other guy as we all in this room know, in and of itself may be satisfying, very satisfying in the short term, but in the long run it does not serve the shareholders or more specifically it does not serve our customers and our partners.”
She added, “Competitiveness is a slippery slope. I think once you decide that winning is a value per se, that winning in and of itself has value, there are lots of ways that you might prioritize your time and prioritize your resources that might be more about (winning)... I think also that slippery slope takes us down the arrogance path quicker.” King felt that the desire to compete at any cost could compel a company to “end up making trade-offs that might be customer damaging.”
Moving on, King emphasize that what under girds all these corporate changes at Microsoft is a customer facing evolution.
“What this really should represent in terms of the difference it signals to the company is the emphasis on listening to the customer, being accountable to the customer, being respectful to the customer, being respectful and open with each other so we can improve collaboration for the customer and that really is the theme,” she said. “Because at the end of the day that overall customer connection and making that be part of the fabric of our culture is really the way this is intended to transform us. So I think that is the intention and we’ll see whether we can accomplish it.”
It was apparent in King’s comments that Microsoft has definitely heard and is now responding to the negative public perception of the company.
“I think there are many reasons to move from adolescence to adulthood,” she stated. “Customers gave us the feedback, i.e. arrogant, you’re not showing up, not consistent, you have blue screens, you’re creeps, you don’t listen. We heard it. We didn’t miss that part.”
It was also obvious during King’s presentation that Microsoft as a company genuinely believes it is trying to “do good” globally and that its staff feels that their intentions have been misunderstood. A part of its current corporate strategy will be to try to persuade the world’s consumers and businesses that Microsoft is neither elitist nor arrogant, and truly has customer needs as a central focus. Of course the end goal of this exercise is to ensure a successful, more profitable future for the company. It is doubtful that this aim will be overlooked by the very public that the company is attempting to woo.
I left Redmond unsettled by the overwhelming attempt to indoctrinate me with a warm, fuzzy feeling toward Microsoft. Until I see more action and less angst it will be difficult for me to believe that Microsoft’s purported “values” are not merely an emperor’s new clothes.
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