The move to the Developer Sales Team

I hope everyone has had a Happy Thanksgiving, it’s a nice American holiday where I do not need to worry about political or religious sensitivity, we just get together and eat lots of food.  Even Helen, one of the owners of my favorite Greek restaurant in Seattle, the Continental,  says it’s the one holiday she really liked when she emigrated from Greece to the United States because you just got family together and enjoyed a meal.  Well now back to my life at Microsoft.  I thought we would fast forward just a little to my next job at Microsoft on the Developer Sales Team (DST).  The group was a pre sales phone line for handling customers technical question on specific products.

The Developer Sales Team was where I really cut my teeth in better understanding technology.  In hindsight it was amazing that they would even give me the job.  The key question in my interview was how do you redistribute a Visual Basic application – in those days you could not compile VB code it required you to redistribute a runtime DLL.  I answered correctly. I know for some people following my blog that they may sound brilliant or really smart, but I had not written any code since high school ( still have not).   But that was how things worked in those days.  A co-worker, Debwa had started in Windows Tech Support – here’s your book, have fun.  In those days the question was could you learn?  If yes, you were thrown to the wolves. It was cool not corporate.  At the time the list ot really technical products was not that long and the team was divided into three groups shortly after I joined; Database, Developer and Networking.  Over time I would answer inbound phone calls as a part of my job and learn different technologies on the fly.  Compared to today, the products were not many.  For Databases we had three (Access, FoxPro and SQL Server).  For Networking we had Lan Manager and Windows for Workgroups 3.1).  For Developer Tools we had a bit more (Fortran, Cobol, Visual Basic, MASM, & Visual C++ 1.0).  This was all before the internet.  Online Services we supported then were GENIE, Compuserve and AOL.  It was a cool job early on and one I was thankful for and remain thankful to this day.

On the horizon a couple of things were being talked about.  One was an effort by developer genius Dave Cutler on a new technology called Windows NT.  The second was a beta product code-named “Chicago”.  On the competitive front IBM had launched OS/2 2.0.  A new competitor I will talk about in a later blog was Novell.  They were the kings of file and print.

Internally the Corporate HQ Sales organization had been taken over by Rick Devenutti.  Rick would eventually rise to CIO and head Microsoft Consulting.  As  I write this blog some execs will come under great scrutiny.  Rick will not be one of them.  He took time to understand the org.  He had a cubicle on each floor so he could sit with the phone reps..  In my group he sat next to me.  It seemed every time he sat next to me I got the irate customer.  I remember the first offsite we did in Seattle at the Sheraton we must have had 500 people there.  I think Rick took away from this what do all these people do and why do we pay them?  He started outsourcing.  I know this is a sensitive subject for some, but in general I think it makes business sense and now with Business Process Outsourcing (BPO) I am a strong believer it is here to stay, so in short for those  against it, like my wife, “get over it”. It will also take a larger role in all our lives moving forward.

So what were the big issues of the day? SQL Server was trying to go after Sybase.  In hind sight it still could not scale very high.  When do I use VB versus C++?  I am not going to spend a lot of time here as I do not want to bore the audience.  The thing I remember most are the people I worked with who were young and energetic.  Many who I am still friends with to this day.  Others met my fate.  It was also during this time I was called for jury duty.  I would meet a beautiful young girl (ok  she was 2 years older than me) named Jean.  She ended up being my wife.  Shortly after I would attend my first Microsoft Global Sales Summit in San Diego.  Which will bring us to our next topic as we move away from technical stuff and talk key executives, parties, drinking, scandal, an ill-fated Microsoft soccer tourney, etc..Take care everyone and until next time good night and good luck.

The other key execs in Microsoft’s rise to power

It’s probably easy to look at Microsoft and say it is Billg’s company, but there were a lot of other great figures that had lasting influences on who and what Microsoft is today.  Three I will highlight todat from my early years are Jon Shirley, Frank Gaudette and Joachim Kempin.

Back in 1987 when I was still in college I temped in the mail room at Microsoft.  My first day in the mail room (there were only 4 buildings in Redmond in those days) it was one of the girls last day.  Apparently the mail room supervisor had arranged for her father to come down and talk to us.  Turns out her dad was Jon Shirley.  I did not know who he was but it was obvious he was important.  Jon would retire shortly after I joined but the stories of Jon were legendary.  There were other Presidents in Microsoft’s history.  We had a guy from Boeing, we had Rick Beluzzo from HP,but they would never mesh with Bill and Steve.  However Jon’s role was a bit different.  Having honed his skills for 25 years at Tandy he joined Microsoft in 1983.  He was the guy who really showed Bill and Steve the way to run a company.  I had the chance to talk with people during my career at Microsoft who worked with Jon and he was usually described as “tough as nails”.  Since he left the company no one has had the title of President and been successful.  The current list of Presidents head divisions (Robbie Bach, etc..) they are not Presidents in the classical sense.  My guess is Kevin Turner (current COO) will be given that power as Steve seems to really like him, not so sure the rest of the company does.  But in the history of Microsoft they can all try but no one will have the impact that Jon Shirley did as he put the basic business disciplines in place that enabled Microsoft to succeed.

The next is Frank Gaudette, Microsoft CFO.  He was a character.  A tough Irishman from New York.  He was a boxer in his youth and a paratrooper in the Korean War.  He was the guy who took Microsoft public.  He was proud that he negotiated a nickel out of the opening share price when Microsoft did its IPO.  At the company meetings Frank always put on a show – being shot out of cannons, coming out as a boxer, etc..  It was humorous as he was not a great speaker.  However when we spoke I always felt like I was listening to the Count from Sesame Street.  He would just talk numbers “One billion, that’s a big number, I like that number”.  All in all it was pretty enlightening.  The classic Frank story that has been shared around the halls of Microsoft forever is SteveB went in to talk to Frank and ot got so heated that Steve punched a hole in Franks wall.  Frank followed Steve out into the hall and said “you do that again I will throw you out myself”.  Those were the days.

Finally we have Joachim Kempin.  I can’t say I know a whole lot about this exec as he was always kind of  a mysterious figure, even at Microsoft.  He ran the OEM division and he was the one who locked down the OEM’s into their Microsoft contracts.  Anyone who follows Microsoft in detail knows about Joachim.   Some would say he put the “evil” in empire.  Rumors at Microsoft were tha Bill and Steve just let Joachim be.  They did not interfere in his business.  If you browse the net you will find internal emails from Joachim.  It’s apparent that if you ran Windows or Office, when you went to launch a product you had to go through Joachim for sign off on how you were going to price the product.  In those days the OEM division was outside of sales.  It was its own group and it was responsible for billions.  It was powerful.  From time to time other groups would do their own deals with the OEM’s.  If Joachim’s group found out that business was taken over and folded into the OEM division.  Do whatever deal you want with HP or Dell or Acer, but in the end the OEM division would own.  Arguments with Joachim were a one way street.

Well this has been probably my longest blog post to date.  I hope everyone enjoys the holidays.  There is still so much to cover and so much to discuss. Take care everyone.

The rise of Office

Sorry for the delay but being unemployed is hard work.  Well back to products and my first year at Microsoft.  If you ask anybody what Microsoft’s biggest sellers are they will likely say 2 things.

  1. Windows
  2. Office

These two products have defined Microsoft for the past 15 years and resulted in billions of dollars in revenue. The first we discussed in an earlier blog the second was fueled by a couple of things:

  1. Microsoft’s existing OEM relationships
  2. Microsoft looked at its application set collectively not individually

On the, OEM front this was easy.  Microsoft already had relationships with all the major OEM’s, therefore it was easy to go in and up sell them on adding Office to their list of pre-installed applications with their PC’s.  Another thing that is a bit of a grey area to me but certainly there were enough internal hallway conversations to verify, the agreements that Microsoft had in place those days were very restrictive. A OEM could be penalized for shipping something other than Office with their PC’s.  In short Microsoft leveraged its positions on Windows to secure other applications.  Some might call that monopolistic behavior but that is a story for a later blog entry.

The second point was Microsoft’s vision for the workplace.  I think Microsoft’s chief competitors looked at customers as word processing customers, spreadsheet customers etc..Microsoft looked at the workspace holistically.  Chances are the worker who crunched numbers had to write documents, had to provide presentations and Microsoft provided it all.  I often thought during the nineties Microsoft’s success was due to a couple of things:

  1. Microsoft’s vision and patience
  2. Microsoft’s competitors incompetence

 I think those two things played out time and time again.  The first point was pure Billg.  He had the ability to say this is the way the world will be and everyone in the company would just follow.  And I mean everybody, from Steve Ballmer down to the bottom.  I mean me when I am referring to the bottom.  On the second point I think our competitors viewed this as a business, which was true, but in doing so they were missing the bigger picture.  I remember a quote from a famous venture capitol guy in Silicon Valley which was to potential venture capitalists, “When you invest in companies look at the technology and not the revenue, that is implied”.  That quote was post Dotcom, but I think it applied to where Microsoft was when I started.  Come up withh great ideas we will think about the revenue later.  That simply is how the tech business has to work.  Great idea will lead to revenue even if at first it is not apparent (there were a lot of search engines before Google).  That is how Microsoft operated in the early days and in the process we were defining how money would be made in the software business.  In the end it led to enterprise licensing scenarios, OEM licensing etc..all of which included Microsoft Office.  With each new licensing vehicle Office grew.  Heck Microsoft even was making tens of millions, hundreds and eventually billions on Microsoft Office for the Macintosh.  Before the end of eth decade Microsoft was a multi-billion dollar empire.  In an ever-changing environment I vie wit as Microsoft’s Achilles heal today, but then it was pure gold.  It was the easiest call I took as a customer service rep “Your looking at a spreadsheet?  You are looking at a word processor too?  Well then buy Office for less than what you pay for WordPerfect and Lotus we will throw in Microsoft PowerPoint”.   The beauty of that type of dialog is I did not view it as sales, it was just common sense.  Innocence is a great way to sell.  Good night everyone.

My first Microsoft X-Mas Party

Now to a more fun topic, I had been at Microsoft a little over a month when it was time for my first corporate Christmas Party. The Microsoft X-Mas party in the early years was an event. It was held at the Washington Convention Center in downtown Seattle. It was first class and unlike the pathetic departmental X-Mas parties of today at Microsoft. Todays events are about schmoozing the boss, introducing your significant other to the big boss, and trying not to bore your significant other with shop talk. The old parties were an event bent on sin. In short really fun stuff.  My first event I got together with the old temps Jovanna, Andrea, and Steve to go to the party.  I was taking Jovanna and Andrea’s friend, Lisa, to the event.  Not a date I just had an extra ticket.  Lisa was from LA , who was a customer service manager and fallen in love with one of her reps.  I was a CS Rep and maybe…naah.  Amazing what you learn in short time after meeting someone.  The event was huge probably 5000 people.    Interesting that it was formal attire, very un Microsoft like.  By being so large you could pretty much do what you wanted since you rarely ran into any co-workers.  There was great food at every turn, the drinks were first-rate (beer, wine & cocktail..not cheap stuff either).  Each room had a theme, in fact the whole party had a theme.  I just cannot remember what it was in 1991.  It was a long evening.  I remember there were room parties as many people got a hotel room downtown and you would go hang out for a few drinks.  It was a surreal experience at the age of 25.  So many people I did not know, everything was free..the whole night was kind of a blur.  There would be one or two more parties like this before they would just drift off as a part of Microsoft folklore.  It was a cool experience and one I will never forget.  As I was talking the other day with someone who was there at Microsoft at the time, she stated “It was an event”…in a geeky glamorous sort of way.

The Original Equipment Manufacturer (OEM) Model

This may seem like a rather drab topic to read about but it actually should not be as an entire software economy and PC industry was built on the back of it.  The basis starts from the very early years when I was still in grade school – Billg wrote an article that says companies should be allowed to profit from their intellectual property (software).  Thus the idea of software licensing was born.  A second thing that led up to this model was the operating system.  In the early days of the industry computer manufactures build their own PC all with different operating systems (Atari, Commodore, Tandy, etc..).  This meant that system was unique and completely incompatible with other systems.  Then “bing” (no pun intended) Bill had a great idea.  What if Microsoft got an operating system and licensed in to hardware manufacturers.  In walks IBM.  A legendary story worth retelling.  I will offer the one from the trade rags and Microsoft halls.  Mary Gates is at a United Way board meeting and one of the other board members is a IBM person.  They are talking about this new idea of Personal Computers and Mary Gates suggests they talk to her son.  In the meantime Microsoft found a local guy in Seattle who had written his own operating systems and paid him $50,000 for the OS.  Some people would say typical Microsoft ripped off the guy, but in reality the industry we know did not exist at the time.  No one knew what it would become or where it was headed.  Microsoft attends the meeting with IBM and here’s them out says they would love to work on the project.  Microsoft would provide the software operating system for IBM’s new Personal Computer.  And at the end Bill would add one more thing, “We get to keep all the rights for the software”.   Love him or hate him, that was one hell of a brilliant move.  He had to have known going into the meeting “I want to own the rights to the software when I leave”.  As Bill always said “Software is where the magic happens”.  And now he owned the foundation of an industry.

What does this mean?  Since Microsoft now controlled the destiny of DOS they could license to anyone.  They did just that.  The licensed to Dell, Compaq, Gateway, Acer, Toshiba and a whole host of others worldwide.  The benefit?  If I have a  Compaq running WordPerfect at work and a Gateway at home running WordPerfect I could put my file on a 5.25 floppy and bring it home and load on my home PC.  Before I essentially had to have the same PC at home and at work to do that. Another great thing about software is your margins.  It costs Microsoft $5 to make a floppy and they charge IBM $100.  They charge Compaq $101.  They charge Dell $103.50…I think you can hear the cash register ringing.  For the PC folks it was good as they did not have to worry about developing and supporting their own OS.  This drove down the cost of PC’s.  As i said before the Apple OS was clearly superior, but the cost was completely inferior.  In those days a PC was in the neighborhood of $2000-$2500 and a Mac was $3500 (I am probably a little off here but you get the gist).  That my friends is how you get 90% market share.  At that time PC’s were still new so you were in a rapidly growing market and a large part of revenue was “net-new”, which is a very good thing.

Is the OEM subject drab? Well maybe at first it sounds so but it laid the foundation for an empire.  That is why today when Microsoft launches a product like Windows 7 all the Wall St people, OEM’s,  etc.. get so excited as they know with the right improvements (Windows Vista would be the wrong one) that a big financial boost can occur. 

It is a dreary rainy day in Shoreline and I have written more than normal on a topic that could be its own book.  As  I write my blog I keep coming up with more topics to discuss that I save as drafts.  If anyone has a suggestion or idea they would like to hear me discuss I am happy to do it.   Believe it or not we still have not progressed to the end of my first year at Microsoft.  I can say looking forward the 90’s was a Microsoft love fest but after that things start to change quickly and drastically.  Take care everyone, I am just going to try and stay dry.