Hans Hoffmann's Blog

It is the breakthrough that brings the gold at the end of the rainbow to fruition. To the young start-up it can launch a small garage company into the stratosphere.  These things don’t happen that often but when they do the changes they cause can be cataclysmic .  The challenge all incumbent companies face is getting to the forefront of these changes before they happen or at least on board as they happen, otherwise they are left in the wake of the Titanic or maybe more accurately they become the Titanic and quietly sink to the bottom of the ocean.  Known through the ages as a once great ship now reduced to a rustic relic never to be seen in its infantile glory again.  In the industry we view these as disruptive technologies.  Changes that occur that create tremors across the industry.  They create excitement and challenge the business norms.  In short we call this disruption.

In today’s world I view disruption quite simply as those technologies that are changing how we interact with one another as people, that change the way in which we live and work on a daily basis.  Perhaps more efficient and maybe not for the better Who does not have a friend or perhaps a teenager today who communicates more via text then actually face to face with their friends?  Sometimes they start simple but expand as scenarios of use increase.  The simple idea of mobility has changed and continues to change the way we work and live our day-to-day lives.  They led companies to make big bets, where a year earlier they had not even had serious discussions regarding the technology they are betting on. Other times the change is dramatic such as when the Apple iPhone launched, changing mobile phones forever.

The changes at times seem generational.  Reflecting on my own life I can see the advantages.  When I was in high school having any sort of social life was paramount.  The planning that went into everything from going to a movie to meeting someone for coffee was cumbersome and quite painful as the only technology was the good old lanline phone, multiple phone calls back and forth.  Worse yet some calls were made and the phone was busy.  It was stressful for the student and annoying for the parents.  Now the ability to communicate in real-time whenever and however is simply amazing.  Mobile Phones, email, texting, Facebook and Twitter to name just the obvious candidates, have altered how our children live and interact.  It has created a certain speed of life that at times does not seem manageable.

Where do I see future disruption?  One area I think of is the death of the rectangle.  By this I mean when we look at the range of devices we consume today, whether it is a laptop, smartphone or tablet – one thing that is consistent is their shape.  They all have four corners, maybe smoothed curves, length longer than the width.  However we see our technology experience now extending beyond devices that we can hold in our hands into new areas that before seemed futuristic and distant.  It was not long ago that our technology experience was tethered by a desktop or laptop to the nearest power outlet.  With the advent of mobile tha has significantly changed how we live and interact within a short timeframe.  With the oncoming robotics revolution that is set to change again.  The creation of drones maybe will lead to little hover devices in our home.

There will be a huge upside for those companies that dare to think outside of the box, to think beyond what exists today and think about what will exist tomorrow.  Somethings we are seeing already.  The controversy we see around law enforcement and the use of video surveillance and the looming war of civil liberties and drones.  Google has received tremendous press for its wearable technology, Google Glass.  Another Google venture is into robotics and robotic vehicles.  Wether these take off as a Google venture or some one else comes into steal the show, it seems evident that these two technologies will come to pass and the winner will see huge upside in revenues.

The societal disruption will be huge.  If you take robotic vehicles they will plan efficient routes for you to take at the proper time with the least amount of difficulty.  Your time in the vehicle will be spent being more productive (or catching up on sleep).  The simple layout of the car could change from the traditional front seat back seat, as cars are designed for more of a leisure lifestyle. This can extend beyond the car into other areas of transportation, such as trains, boats and planes, not to mention the emerging market of space travel.  The only limits to where this will go is the limits we place on our imagination.

More than anything disruption is about opportunity. The entrepreneurs that make this country great are prone to risk. They are willing to take the chance to make something big. When we look at some of those “risks” they don’t seem like risks at all. When Bill Gates and Paul Allen started Microsoft they just had a vision of where this idea of a PC would lead. Sergey Brin and Larry Page were just making search more effective, when they stumbled onto a transformational business model. Steve Jobs was so dictoral in his approach, but so focused on creating a vision of personal computing that exceeded all our expectations. We dream big in our country and that is why repeatedly we change how the world lives.  We create disruption.

Good Night and Good Luck

Hans Henrik Hoffmann August 22, 2013

I have been on every version of Windows since its inception so I thought with release of Windows 8 (and now that I am on it) I would go through the years and provide my list of the top 5 versions of Windows ever.  Now this may be a daunting task as I have to remember why a particular version of Windows was great or not, but frankly I like the topic and it should be fun.  It came to me while having a conversation with an old co-worker in his office, and I thought , “hmm…there have been so many I should probably write about it”.  So without further delay here we go.

5) Windows 8:  Some may ask why not number 1 of the top five work OS’s?  For starters I have had Windows 8 for a little over 3 weeks.  I am still getting familiar with this beast.  What has impressed me so far is the ambition behind the operating system.  This is the biggest departure since we went from Windows 3.x to Windows 95. Besides the new UI, everything is touch enabled.   Many middle-aged Microsoftees have said “Hans do you have a touch screen enable version?”   I have to admit I will trust my kids more on the value of that then middle-aged folks trying to be hip.  Sarcasm aside I will say what impresses me more than the new UI is the stability of what is a major UI refresh. An overhaul was needed, badly for what had become a stale user experience.  Change is hard, in particular when everyone was so comfortable with the “Start” button. In any case what holds Windows 8 from going up or going out is time.  It is still a relatively new products so in six months, the view may be completely different.  Plus Windows 8.1 should be out by then adding some stability to the platform.

4) Windows NT 4.0:  How did this one slip in here?  Primarily memory leaks.  Somehow along the way in corporate America companies stated moving away from plain vanilla Windows and started deploying its corporate sister, Windows NT.  Even at Microsoft this was the preferred desktop.  The previous versions of NT had issues.  If you left a PC on for 24hrs (many people did) the system would eventually slow down until you either crashed or needed to reboot.  Pretty common for all OS’s in those days.  What NT 4.0 introduced was a very stable operating system.  It was nothing exciting as it was designed with enterprise in mind, but in many ways it raised expectation on what users should expect from their PC.   It still took forever to boot.  Turn on PC go grab a cup of coffee and come back, but it did perform.

3) Windows XP:  This was one of those operating systems that did not offer anything exciting, it just worked.  It did not hurt that the follow-up product, Vista was kind of  a disaster.  Thus stopping many companies from deploying Vista and waiting for Windows 7.  Another thing is XP followed some poor OS’, which included Windows 98 and Windows ME.  It was a OS that worked and was deployed at homes and in corporate America.  Nothing speaks to its success more that the fact that Microsoft has had to work overtime to get people off of this dated OS.  That, in my view, is the ultimate compliment to the software engineering team that created XP.  Bottom line is XP just worked,

2) Windows for Workgroups 3.11:  Ok a tough call here as I could have also picked Windows 3.0 or 3.1.  In many ways 3.0 probably should be here as it was truly the OS that ushered in the Windows world.  The GUI tha would be famous and redefine the industry.  Windows 3.1 introduced the File Manager with the tree view of your folders.  Seems simple today but it was big in 1991.  Windows for Workgroup simply added some additional networking capabilities to the OS, but in the end that is what made it complete.  It was almost an unattended success, as Workgroups was originally a separate system from the Windows product line, intended to mark Microsoft’s more direct entry into competition with Novell, Banyan Vines and Lantastic..  But new features coupled with better product stability equaled success.

1) Windows 95:  The launch of Windows 95 was B-I-G!!  One of those moments in history that will be remembered and written for many years after I am long gone from this earth.  It would go unmatched until Apple came out with the iPhone in 2007.  It was a defining moment for Microsoft and was really that last time you could garner real excitement about an Operating System (read my Windows 95 Launch blog post).  After this one no one seemed to care as much about the OS.  It was literally the culmination of a journey that had started when Bill Gates and Paul Allen were still at Lakeside High School.  Beyond being a new 32 bit OS, it was one of those rare industry moments that does not happen that often.  As I mentioned earlier it was 12 years before the next moment when Apple launched its iPhone.  To be caught up and a part of that excitement was thrilling, to see the consumer reaction was phenomenal.  It was a release that Microsoft could do no wrong, even when they did (BOB), it was greeted with light-hearted humor.  In my view Windows 95 was the biggest and greatest of them all

There you have it my top five Windows operating systems.  It is always fun to do a top five or tope ten list and I hope you have enjoyed my view and perspective.  Please debate me if you disagree. The operating system from a publicity perspective is probably not as a relevant as it once was, but it Is certainly not less important.  Try getting on the web without one.  Nothing has served that cause better than Microsoft Windows.  It has been the workhorse that has made everything possible.  Yes, there have been some duds (Vista), some huge winners (Windows 95), but all in all to define our future we will still need an operating system in eth background to get us there.

Good Night and Good Luck

Hans Henrik Hoffmann August 12, 2013

It’s a funny thing in “geek” land that often the leaders of these companies become almost Hollywood like as they attain fortune and fame.  They rarely, if ever look like Richard Gere.  They are a cross of Hollywood fame with Albert Einstein like credentials (and looks).   The technology press and the greater press hang on every word looking for insight into what the future of mankind holds and their companies abilities to act on those prophesies inspires our confidence in them. The success of any great technology company lays in a large part to the stature of its leaders.  To have someone at the top who sees the future clearly and can define his or hers companies role in that future.  The great ones tend to have a very large sense of how their company will not only participate in the future but will define that future. There have been many ans still are many in the industry.  I would argue that without someone at the helm setting the tempo for the future companies are bound to fail, it may take time but they will, in time, become irrelevant regardless of their size and stature.

I remember a defining moment in my career came at Microsoft’s Global Sales Summit in Orlando, Florida in 1998. After many days of sales of sales meetings, late nights, and very hot weather it was nearing the last night. Before we partied the night away there was one last meeting to attend, but it was the most important: The Bill Gates keynote. It was always the one, no matter how tired or how hung over you were you rallied and got there early. The doors were always shut as the crew did their final prep and made the stage ready. When the doors opened people flooded into the room, trying to get the best seat possible.  I was never one to crown the front.  They had huge monitors so I never felt a trying need or desire to be right up front.  Plus I prefer a little space, so I was in the back.

The Gates entrance was always rather spectacular, and Orlando was no exception.  Smoke and cool lighting as the audiences anticipation built and then as if in a flash a silhouette of a man of small stature appeared in some mad up god like fashion.  As always his hands were close to his chest and interlocked together, in what would resemble prayer but was certainly not prayer.  As he stepped out  of the staged special effects his hands would come undone as he would reach with his finger to his face to softly adjust his seemingly over sized glasses and gently push them up the bridge of his nose.  As he came out to join his legions of followers, he paused to admire the audience and then spoke, “I don’t have any Powerpoint slides today, I am just going to talk”.  A stool had been placed on stage and he just sat down and discussed the state of Microsoft, what the competition was doing, what Microsoft would do to compete and beat the competition, and what he future would hold.  As a Microsoft employee at the time I could say everyone in the audience was comforted and felt enthusiastic about the company moving forward.

Tech companies are defined by moments like I just described,  Probably even more so by the demagoguery of their leaders  The list of great tech visionaries and their companies is long.  Bill Gates and Microsoft.  Steve Jobs and Apple.  Larry Paige and Sergey Brin at Google.  Mark Zuckerberg and Facebook.  In many ways it resembles and acts within these companies as a cult of personality.  The question for many of these companies and a much  bigger challenge is what happens when the founder dies or leaves the company.   Is there someone who has the leadership ability combined with the technical discipline to provide a road map for the future?  Both Microsoft and Apple struggle with this now since the departure of Bill Gates and the death of Steve Jobs.

There was a view at one point that as these companies mature and will have start operating like a real corporate company.  To act more like a GE or Proctor & Gamble.  To have mature business leaders run different lines of business. This was probably more emphasized by the failure of the dotcom era to overturn the classic rules of business,  For those who were around all the talk in those days was about the breaking down of the old rules of business.  Fundamentally one rule will never change which is your financial statements will tell the public if you are successful or not.  However one thing that makes the world of technology unique is the pace of change.  A cash cow like blueberry mix or refrigerators, which have been around for over sixty years, does not radically change that often if ever.  When was the  last time you heard a presentation about the future of the refrigerator?  Cake mix?  Business leaders in those industries need to be creative as they try to squeeze more profits out of s stagnant product. Microsoft Windows, the ultimate cash cow is being challenged as form factors have changed and the browser wars have heated up. The foundation of the OS is fundamentally changing and will change again.  Nothing is forever.

Business fundamentals are important but at the end of the day every tech company needs their top tech people to be sitting up late at night in a hotel discussing the future of technology.  To be able to evaluate new technologies as they come to light and figure out where will their company utilize new technology and where it fits in the roadmap of their future.  Discussing where the company is positioned today.  Where is the competition positioned.    What is the market doing?  What trends are fads and what are trends that can be built upon for a bigger future.  However the most important thing a tech visionary does is anticipate and manage change.

Change kills many companies.  MySpace was first but Facebook was better.  There were many search companies, but now it seems we only know Google.  Microsoft had the Reader SDK, anyone heard of a Kindle?  Everyone knew the Cloud was coming, but only Amazon bet early and often.  There was Mapquest and MapPoint, now it seems we all use Google Maps.  As I look forward does it seem inevitable that the automobile will be self driving?  Whose betting in the industry?

Following up on the last point there is also timing.  We are all familiar withe classic hockey stick curve.  At the inflection point things take off and become self-propelling.  It’s important to have leadership that sees and predicts those inflection points and steers the company to greater success.  The flip side of course is if you do not have those types of leaders you miss those inflection points, such as the transition to mobile computing.  Microsoft was guilty here of missing that transition.  Before the Apple iPhone launched that industry seemed to be following a normal trajectory.  Other companies were in first but over time Microsoft would improve and eventually eat their lunch.  Lunch never came as the industry changed rapidly and simple things like product release cycles changed as well – going from 3 years to under 12 months.  The Microsoft bureaucracy was not set up to meet this new paradigm and eventually a major re-organization was needed.  Other examples would be the merging of file and print with application servers, one Microsoft got right and another company, Novell completely missed the boat of, where are they now?

Getting in front of these changes is the key ability a true visionary needs to provide his/her followers.  Gates did it to Novell and countless others.  Jobs in turn did it to Ballmer.  Now Brin and Paige have done it to Yahoo and many other companies.  It will be exciting what the next generation of visionaries will bring, how the will view the future as it unfolds before us.  The task of staying on top of these rapid changes is daunting and I will say that every visionary I have seen in the industry usually has a brain trust of really smart people around him.  Gates had Paul Maritz, Bob Muglia, Sanjay Pasatharathay, Eric Rudder, and countless others..because when you are in the “famous” phase you can attract a lot of top-level talent.  It is important to have a sounding board to bounce ideas off of and also absorb new ideas.  In the end it is the idea generation that visionaries bring to the table that make the industry and the future so exciting to be a part of.  Finding the right individual with the right company is the trick.  I was lucky to find one, in Bill Gates, and I am still hopeful to work for the next one, wherever he or she may be..

Good Night and Good Luck

Hans Henrik Hoffmann, August 4, 2013

No I am not going to spill oodles of Microsoft gossip about the latest McKinnsey Consulting engineered re-org at Microsoft. In fact I cannot even say that it was McKinnsey that engineered it. Pick your choice of any of the hundred year old consulting firms and I am sure one of them was the winner of the Microsoft sweepstakes.  Somewhere a lucky Account Manager just blew away his quota.  Hopefully he has found a sunny beach somewhere on this great planet of ours.  These things garner a lot of press and are scrutinized and analyzed by people with greater credentials than myself.  However it is fun never the less and worth the effort.  Re-orgs are a part of America’s corporate culture, it’s a way of life.

When I first started at Microsoft in 1991 we went through a re-org almost right away.  It just was not called a re-org at the time.  It was decided to create the Office of the President with 4 separate heads of state.  We of course had Bill Gates, Steve Ballmer, and then Frank Gaudette who was our CFO and Mike Maples, who headed all applications.  Because at the time Microsoft was a shooting star and the leaders were well-known and respected, it was not such a big deal.  Plus the company was only 7500 employees.  Any type of restructuring did not take very long.  Usually within a week it was business as usual and for most employees it did not seem to impact us at all.

Since those early days every re-organization has been bigger, broader and bolder.  The politics have become more brutal as there are always winners and losers.  It has become a virtual white-collar blood bath.  To be fair this is in no way unique to Microsoft, it is a simple function of corporate America.  What seems a tad sad is it used to feel like Microsoft was above that kind of petty politics, but over time Microsoft has been hardened as a company.  It has matured and evolved as employees have grown older and now have families, which is a larger responsibility.  It has weathered a brutal DOJ trial.  And it has seen its once bright star fall from the sky.  Now re-orgs are more viewed as a way to back to a glorious past.

The current re-org just announced a few weeks ago is big.  It will fundamentally alter how the Microsoft Product Groups will work.  No longer silos as they have been throughout Microsoft’s history but part of a larger broader engineering organization.  Trying to create what is believed to be a more strategic and nimble organization, made to service customers with new releases in six to twelve month cycles and no longer three-year cycles.  It is daunting in the sense of not that it cannot be done, but how long will it take to create the structure in order to execute upon the vision.

When you think of what happened you have four engineering orgs – and here are the winners:  Terry Myerson owns the Operating System stuff (Windows, Windows Phone, and Xbox).  Qi Lu owns Application Services (Bing, Office 365, Office Servers and Client, Skype, Yammer and Lync).  Satya Nadella owns heads the Cloud and Enterprise Group (Azure, Windows Server, SQL Server, Visual Studio and System Center),  Finally Julie Larson-Green owns hardware (Surface, Mice, Xbox, keyboards and anything else hardware).  I am going to spare going into detail on each group.  In my simple view Satya Nadella is the winner as he will not have to change a lot for the Enterprise.  Microsoft is doing well in the Enterprise and his re-org does not change the overall structure too much.  Julie Larson-Green has a big challenge in making Microsoft into a viable hardware company, but that being said since Microsoft is not known as a hardware company it represents a green field opportunity for the company.  Terry Myerson has all the OS’s and it should be interesting to see from an engineering stand point what that means, in particular Xbox which has always done their own thing.  Qi Lu I do not envy you.  At a high level I think it is about integrating Bing with all the apps inherited, kind of like Google has done.  But is a bunch of disparate applications that somehow will have to come together.  From an engineering standpoint not an easy task.  Not to mention I am not sure what integration between Yammer, Skype, Office and Bing will look like.

I could write much more about the challenges and probably an essay on each engineering group, not to mention the challenges in marketing that Tammy Reller faces.  This ranks as the biggest shift in how Microsoft operates ever.  Gone are the Business Groups.  The Product Groups are now subsumed into the various engineering groups.  All the processes that supported the old system will now have to be evaluated and changed.  From a sales operations standpoint, change will take place.  Internal communications will change.  How partners work with Microsoft will change.  Development processes will change. All these things are being done to create a faster and nimbler organization.  The question is how long will it take to get there?  More importantly how long does Microsoft have?

If I am taken by one thing from this re-organization it is how readily the model was borrowed from a primary competitor, Google.  This idea that everything springs from engineering.  From a Google standpoint this concept is very much a part of the companies DNA.  This is how they grew up, how they evolved.  Microsoft grew up in an environment where each product group charted their own destiny.  Competed in the marketplace and competed internally for the Microsoft sales forces attention.  From an engineering standpoint each of the 4 units will have to put processes in place so that software engineering across the individual unit will march to the same cadence.  Not easy when you are taking various products and mashing them together with other products to come up with a singular flow.  This after decades where product groups each operated in their own silos.

So the final and biggest question is why?  I think a large part of this is Microsoft has finally accepted the reality of the post-PC era.  Try as they could to deny it, and trust me they tried so many ways of doing marketing spin to warp reality.  First it was some apps could only be done via PC as they required the local processing power of a PC.  There was Software as a Service which they tried to spin as Software AND a Service.  Ballmer thought the iPhone was stupid.  Then he said Apple would never sell those iPad things.  To be honest it is kind of an embarrassing list.  Now that is has been accepted the realization must have been that the current organization does not support the direction Microsoft needs to go to survive, so it had to be changed.

It would be easy to come to the conclusion is this is a last gasp effort to stay relevant as a company, but I don’t think so.  Despite its recent earning miss, Microsoft is still pretty much a money printing machine.  They can still generate cash even of the re-org fails.  Can they last forever?  No company can last forever, and in a dynamic industry like technology that is especially true.  It is going to be an interesting process to watch.  The most interesting will be to watch how quickly they can move.  In the meantime some business consulting’s acct manager is sipping drinks on a beautiful beach many miles away, I think I will go join him or her,

Good Night and Good Luck

Hans Henrik Hoffmann July 25, 2013