Microsoft’s Dark Archangel Joachim Kempin Returns

There are a lot of technology industry legends that came from Microsoft. People who shaped the industry and brought about the PC revolution. Many are revered, and a few are even feared.  During Microsoft’s rise to PC dominance no one played a bigger role in the creation of their unique hardware ecosystem than their VP of the OEM division, Joachim Kempin.  He was a brash, arrogant, take no prisoner’s negotiator.  When you look at the revenue Microsoft’s OEM division generated it can be attributed to the singular focus of their leader.  But perhaps the most interesting thing is that really not much is known about Joachim Kempin.  If you look him up online you will find few pictures.  I can say during my 18 years at Microsoft he never spoke at a company meetings, a sales conference, technical forum or an industry trade show.  In fact I never saw him at all.  The story goes that even Bill Gates and Steve Ballmer stayed away from him.  He had his office and he did his thing.  Of all the big legendary names at Microsoft – Ballmer, Gates, Shirley, Allchin, Maritz, Muglia….Kempin remains the mysterious one.  In the title of his book it includes “…..the secret power broker”.  That would be a pretty fair self assessment.  Everyone at Microsoft knew of him, but very few knew him.

The thing Joachim did was create agreements with Microsoft OEM partners that were one-sided and always to the advantage of Microsoft. The internal discussions were well-known.  The agreements true or not were deals in which no matter what the OEM shipped, they still paid Microsoft.  If you shipped a PC with OS/2, since Microsoft was originally on board with the  design and development of the operating systems, somehow Microsoft still got a cut.  When WordPerfect Office shipped..great, the OEM’s were billed on shipments of PC’s so Microsoft still got a cut.  Are these stories true?  Maybe or maybe not.  However every OEM knew who Joachim Kempin was and they knew negotiations with him representing Microsoft was a dance with the devil.  In the end, it appears that the devil, Joachim, always seemed to win.

Why this sudden interest?  Joachim is getting older and I guess it was time to write his own account of what happened and normally I am not excited about technology luminaries writing books (see Bill Gates and Steve Wozniak…awful).  But the thought of reading Joachim’s book fascinates me. Simply because he was the one major executive at Microsoft, during my time there, that I never met or heard speak.  I am very interested in what he may share in his dealings with OEM’s and other Microsoft executives.  He has a view from inside that not many have, that he has not readily shared.  It should be an interesting voice to listen to.

His view on things that Steve Ballmer has done incorrectly as CEO at Microsoft are accurate but in many instances not new.  The lack of success Microsoft has had in social media, under Steve Ballmer, is more entertainment for how out of touch Ballmer is rather than the actual content of what he is saying.  Which is minimal.   The failure of the tablet…yes Joachim, Microsoft was working on this long before Apple.  To be blunt, however, the user experience sucked.  Microsoft never could get beyond the stylus.  The decision to make their own Tablet is a slap in the face to Microsoft’s OEM partners.  I could not agree more.  There was also the accusation of Steve Ballmer ousting everyone who was seen as a threat to his power.  One example was Rick Beluzzo, who was President for a very brief period.  I disagree a bit on that one as I was there and it was more a question of what was a President at Microsoft supposed to do.  Btween Ballmer and Gates, there was not a whole lot for a President to do. The second however was Ray Ozzie.  I really believe that Steve felt he new better than Ray.  After a year Ray was pretty much out of the loop in terms of the strategic direction of Microsoft.  I saw some of Ray’s memo’s at Microsoft.  The difference between Ray Ozzie and Steve Ballmer when it comes to technology is Ray is brilliant and Steve is average, which means Joachim is right.

The most interesting comment to be released so far is his scathing critique of the Microsoft Board of Directors.  He basically calls them caretakers and that they offer no real value.   I am surprised this has not been brought up more in public discourse.  To be fair back in the glory days there was not much to do.  You do not have to do much when growth always exceeds expectations.  The stock is always going up and splitting and then going back up.  Today I think the biggest challenge is your largest shareholder  is the guy who built the company, Bill Gates.  To top that Bill placed Steve in power.  Has anyone ever heard of someone standing up to Bill?  Someone challenge Bill and say, “hey this company is headed in the wrong direction and we need to make changes”.  Boards are there to provide guidance and advice, it may be time for Microsoft to have a board that acts that way rather than being caretakers as Joachim accurately points out.

If what has been pointed out in  press is accurate I look forward to reading Joachim’s book.  This is a person who during the DOJ trial is sited on many internal emails to the highest levels of Microsoft, that were referenced during the landmark trial.  I can only guess that during those days every effort was made internally at Microsoft that Joachim Kempin would not take the stand.  As much as I admired (and despised) the work of lead attorney Joel Klein, I think by not getting Joachim on the stand was one miscue on their part.  He was a lightning rod figure.  Joachim is a figure who in many ways deserves as much credit for the rise of Microsoft as Bill Gates.  He drove the deals that would make Microsoft Windows the default OS in the PC’s that we still buy today.  Within Microsoft and the industry he was a secret power, with an  emphasis on power.

Good Night and Good Luck

Hans Henrik Hoffmann January 25, 2013

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