Beyond Binary

Stephen Elop is convinced that even in a world of free, browser-based productivity software, consumers and businesses will continue to pay for Office.

Microsoft will bow to reality with Office 2010, adding browser-based versions of Excel, Word, PowerPoint, and OneNote. But, in an interview this week, the head of Microsoft's Business Division says that there is still plenty of life in the full version.

"At the highest level, what we're able to put forward to our customers is not just the best productivity experience, but one that spans the PC, the browser environment, the Web environment, services, and so forth, and the mobile device," Elop said. "So, it's the best productivity experience across the PC, the mobile phone, and the browser."

At its worldwide Partner Conference on Monday, Microsoft will give people a feel for how this works and is expected to start broader testing of the first piece--the desktop applications.

Elop

(Credit: Microsoft)

As for Google, Elop said that most businesses still think of Google as a search company or are just kicking the tires on Google Docs. He shrugged off the fact that Google this week brought the products out of beta.

"I've heard that the word was dropped," Elop said. "I didn't notice that anything else had changed. So I don't know if the software suddenly got better, or they just changed the name."

He also said it is too soon to have an opinion on Google's just-announced Chrome OS.

"We haven't seen it," he said. "We don't know anything other than what has been written in a blog."

In a wide-ranging interview, Elop shared more views on Google as well as his perspectives on Office, business software, and the broader economy.

What are customers asking for from Office? What's the most common thing that large businesses ask you for when you're talking to them about Office?
Elop: You know, when you boil it all down, everything we do essentially in the division, when you're with a CEO or a CIO or whatever the case may be, the base conversation is about productivity. It's about how can you help me solve this problem, and that problem often is about the productivity of some aspect of their business, of something they're trying to achieve competitively, or whatever.

Certainly in today's economic setting, cost savings comes into it. How can you help me save money in getting what we need to get done? How can you help me solve these problems, but do so in a more cost-effective way?

You mentioned cost savings. How is the business environment relative to investment in software and other technology compared to, say, when we spoke in February?
Elop: You know, when we spoke in February, I think there were a lot of people who didn't know what was going on.

I think people may not agree as to what's going on in the economy right now. Everyone has different opinions. But at this point people have opinions. And because people have opinions about what's going on in their business or their part of the economy, on that basis they begin to make plans. The plans will be different than the plans they might have had six or nine months ago, but they can actually establish a plan, and therefore a budget, and decide, OK, in our business we're going to do this, we're going to invest in these ways, and so forth. I don't want to say there's increased confidence as much as there is less ambiguity in people's minds. They've decided what it means to them.

Now, at Microsoft, you've heard Steve (Ballmer) talk a number of times about how we view what's happened as being a reset in the economy, that it's not a bounce back to the way things were, but things have reset, and things need to stabilize here even more, and then we'll see things begin to grow as increases in productivity in the economy kick in.

The product lineup that you guys are going to have going into next year, what does that add to your arsenal, particularly Office 2010?
Elop: I think at the highest level, what we're able to put forward to our customers is (not) just the best productivity experience, but one that spans the PC, the browser environment, the Web environment, services, and so forth, and the mobile device.

When people look at Office 2010 in the broadest sense, and that's both the client applications, it's the services offerings, it's the server products, it's the Web applications, all of those pieces together. Certainly what customers are recognizing as they've had pre-briefings and the early experimentation with the products is that we're at some form of generational shift into this world of software plus services, and Office 2010, I think, is surprising people as it relates to the extent to which we've fully embraced software plus services.

How do you see the balance of Web applications and desktop programs? You guys have obviously talked about it's not just about putting Office in the browser. What are the kinds of things that you think are best done via the browser, what are the things that are best done in a desktop program, and how does that inform sort of the way you guys have designed those two products?
Elop: First of all, it's helpful to look at specific scenarios. I'll just use a personal example. I was at my parents' home recently, I needed to edit a document, I hadn't carted my PC around with me. I had my father's PC connected to the Internet. I was able to use a Web application to quickly look at a document, make some lightweight changes, and pass that document along without interrupting the fidelity of the document, being a part of the collaborative experience with others at Microsoft. There's a specific scenario where the Web application played an important role.

Similarly, if you look in the mobile environment, there are scenarios related to, for example, taking a picture as part of some work that you're doing. You're unlikely to take a picture with a Web browser, or a notebook computer.

The second part of the answer, though, is that while there are specific scenarios that are best advantaged within each of the different ways of delivering our technology, the best experience comes from the combination of all of those things. So, we think less about the Web applications as standalone word processor things, and far more about it as a complement to the trio of the phone, the PC, and the browser environment. We think about the best experience being the sum of those things working well together.

Your preference, and certainly the way you guys are investing in the Web applications, is as an adjunct to the desktop, not a replacement. That said, how common do you think it will be that businesses license just the Web applications for at least a portion of their employees?
Elop: Well, we hope that it's very common to the extent that there are, let's say, workers in a business (where) today a company has said, look, there's one PC for 100 employees on a shop floor, or something like that. To the extent that they now license those workers for a lightweight browser experience in some way, shape, or form, and they're now part of the Office family, that's a positive thing for us. It brings them into the whole environment of productivity that we're trying to deliver.

So, those scenarios we think will be relatively common. It could be factory floor workers, it could be retail employees, and outlets around the world, and there are all sorts of scenarios that we think have been under-served from participating in the productivity experiences that some of these applications will serve to support.

I guess the other piece of that question is whether you expect that there will be a portion of customers that attempt to move some part of their workforce that has access to desktop Office to just browser-based versions?
Elop: I mean, by definition there will be some. Do I think it's a huge proportion? No, I don't. And the reason for that is because, particularly in that we're talking about the commercial setting, where we believe that the productivity experiences that we deliver in the rich client applications, with the Web applications as a complement to that, is still going to be a compelling experience that people are going to be saying, hey, I want people participating, for example, in collaborative editing of documents, in collaborative sharing of PowerPoint presentations, as examples.

For example, our multi-user authoring feature. There are examples like that which we believe represent improvements in productivity for these customers that are delivered through the rich client application. So while you'll always be able to point to some examples of someone somewhere making that decision, we don't believe that's going to be the dominating force.

How often do customers bring up Google apps in meetings, and is it usually when you're talking about the product, or when you're talking about price?
Elop: Customers are aware of Google in different ways. Sometimes just from a search perspective, sometimes they're aware of things like Google Docs and so forth. And our experience is it may lead to a discussion around what is software plus services, what is Microsoft's view on it. And the tendency is not, obviously in our conversation, to dwell on their price versus our price, or things like that, because it's two very, very different things.

When you put side by side, for example, the full range of on-premise and in the cloud services like Exchange, SharePoint, (Office Communications Server), and so forth, the full range of rich client applications and soon Web applications and so forth, combined with many years of enterprise support, of an understanding of how we're going to take care of mission-critical capabilities, it's a whole different conversation. And so that's why in the context of a large-scale customer who is engaging these things I think there's tire kicking, or they may look at these things, but there's a clear understanding that... enterprises have some very specific and far-reaching requirements that Microsoft over many years has figured out how to deliver.

Well, they're out of beta now, is that a significant move?
Elop: I don't know. I've heard that the word was dropped, I didn't notice that anything else had changed. So I don't know if the software suddenly got better, or they just changed the name. I couldn't interpret what it meant.

As someone who has been in this industry a long time, what do you make of Google's announcement that they're moving into the operating system realm with Chrome OS?
Elop: Well, let me just challenge the premise of your question. They've announced a couple of times now that they're moving into the operating system business, because there's the whole Android thing, and now there's Chrome.

We haven't seen it. We don't know anything other than what has been written in a blog. So it's very hard for us to know, without seeing what they're doing, to comment on it.

You have architected part of Office 2010 to run in the browser-based Office Web apps. If I'm not mistaken Chrome isn't one of the supported browsers, but it might, in fact, work in Chrome. Do you guys see Chrome as an important browser to develop for?
Elop: It depends on how you define important. From a market share perspective Chrome is very low. So I think we're driven by customers on these things. There are other browsers that have greater market share, and that's where we've concentrated our first efforts.

REDMOND, Wash.--At Microsoft's TechFest, it takes a little imagination to see how the research technologies might eventually come to market.

A new video from Microsoft shows in an elegant, if utopian way, what it might look like if all of those gadgets came together several years hence. Earlier on Friday, Microsoft Business Division President Stephen Elop showed the video in a speech at the University of Pennsylvania's Wharton School of Business.

Images: Microsoft's workplace of the future

As I noted in my interview with Stephen Elop, the hardest thing for me to imagine wasn't that in several years time, all our walls will be displays, but rather that Microsoft will have become so efficient in getting all of its product groups working together.

Ian Sands, who works on future-related matters for the Microsoft Business Division, showed me the video earlier this week. The work, he said, brings together about 12 different projects that his unit is working on as part of Microsoft's long-term planning, a system known as Quests. Sands said that Microsoft is looking not just at the technological challenges, but also the organizational ones.

"It's forcing us to look at those issues," Sands said.

In any case, it's a pretty cool future tech video (I've embedded a somewhat shortened version below). The full version that Elop showed at Wharton earlier today included future implementations of a number of technologies that were on display at TechFest. It was pretty cool to see that someone is already looking at how those different things might interact together.

Among the TechFest projects that are evident in the video are SecondLight, a technology that allows a surface computer to project multiple displays, NanoTouch, a means for creating touch input on the back of a small electronic device, and a computerized receptionist.

"In concert, these things could have a broad impact," Sands said.

REDMOND, Wash.--It takes a lot to get different parts of Microsoft to really work together. But the current economic turmoil might just be the thing to do it.

At least that's the working theory for Stephen Elop, the former Macromedia CEO who joined Microsoft a year ago to take Jeff Raikes' place running the software maker's business unit, which includes Office.

"It's remarkable how some of those hairiest issues or those longstanding sacred cows, in tough economic times all of a sudden you look at them and say, you know what, we've got to deal with these things," Elop said in an interview this week with CNET News.

Stephen Elop

(Credit: Microsoft)

On Friday, Elop is traveling to Pennsylvania to speak at the Wharton School of Business. He'll be talking plenty about the downturn to be sure. But he'll also be pitching business students and others to prepare for what comes after the downturn. Elop pointed to the way Sears used the Great Depression to shift its business from catalogs to retail stores.

Elop finds himself in the middle of a similar shift as Microsoft finds itself trying to shift from being a business that makes money by selling businesses software every couple of years to one that, in many cases, gets paid to develop software that it will then run in its own data centers on behalf of customers.

As part of his presentation, Elop will also show a concept video that shows a number of technologies, many of which were on display at this week's TechFest, all working together.

In his interview, Elop talked about the economy, what has surprised him in the year since he joined Microsoft, and about the company's vision for the future. Here is an edited transcript of our conversation.

Q: As far as the video, it's really easy to imagine that looking several years out, the hardware gets there. It's fairly easy to imagine that the software that powers it. What struck me is the most ambitious part of the plan is that five, six, seven years from now, all the parts of Microsoft are going to be talking to each other that well.
Elop: So, what I would say to that is I can understand where that skepticism comes from, having come into this company, but I think what you could place more value on is the impact of touch economic times, and the impact that that has on any company.

When I was at Macromedia, we made our most difficult decisions, our most focused decisions around alignment, the big bets during the worst times. And, of course, in the years that followed it turned out we made some good bets, and the company was taken to levels that it had never before seen.

And it's remarkable how some of those hairiest issues or those longstanding sacred cows, in tough economic times all of a sudden you look at them and say, you know what, we've got to deal with these things. An example of that that popped out into the public domain as we went through some of the changes here in January was Office Live, Windows Live. And fundamentally when you look at it from a customer perspective, and what does a consumer expect of Microsoft in terms of an experience, fundamentally they don't want to see divisional lines, they want to see a well integrated, well considered experience that meets their needs.

So, apply a few constraints, like there's fewer resources tomorrow than there were yesterday, stir in like what's really like in terms of how we place our bets, and...all of a sudden it starts to make sense, and you can make those decisions, where maybe some number of months or years earlier you couldn't.

I am personally a big believer and advocate for taking advantage of tough times to go after those things that quite frankly there just wasn't the reason to or the stomach or the constraint necessary.

I'd refer you to President Obama's speech (this week).One of the things that resonated in his speech for me was him saying, you know what, when you boil it all down, we have to solve the health care problem, we have to solve the Iraq problem, like we don't have a choice anymore. I mean, well, maybe before we could have printed more money and somehow we got -- we can't do that anymore. We're having to do that to rescue the economy and make up for the over-indulgence of all of us over the last 25 years. That's what we have to unwind.

So, in that environment fundamentally if we're not going to pass on this huge burden to the future, now is the time we can make those hard decisions.

And my hope is in the political context that the politicians can actually get to that space where they say, you know what, Republican, Democrat, whatever, we've got to solve this, we just fundamentally have to solve it.

Q: So, which is easier, getting Democrats and Republicans to work together in Washington or getting different units in Microsoft to work together?
Elop: It's absolutely easier to get people at Microsoft working together than it is solving the problems in Washington. And the reason for that is because politicians necessarily in a democratic society have to differentiate from one another, have to prove that they're somehow better or different than the other in order to be viewed as successful and get re-elected and get their paycheck.

Q: If that's the case, if that's really what's going on, why has it been historically so tough for the company to bring to market visions that cross these broad product lines?
Elop: You know, increase the pressure, increase the constraints, take away largely unlimited resources, and all of a sudden you're in a position where you say, you know what, how are we going to get the most bang for the buck.

And that's what Steve (Ballmer) has us focused on, you know, what are the bets. A lot of the focus, for example, in the strategy review work that we did within our division was on areas where you know quite frankly I want to spend more money, I absolutely have to spend more money, but that means necessarily I have to spend less money in other areas, and placing those fewer, bigger bets, making those decisions. I think you'll see more and more of that.

Q: So, the bad economy, the best thing that ever happened to Microsoft?
Elop: While the theory of your statement is true, regrettably the thing we can't erase this from or erase from the whole process is the fact that, for example, on January 22, 1,400 people lost their jobs. So, I'll never say, "oh, this is the best thing that ever happened," because there are people in my community whose kids have come into my kids' school and said, my parents lost their job or whatever. So, from a personal perspective, that's not true.

But anything that increases the likelihood of groups working together and that spirit of collaboration coming together is a positive force, so it does help.

Q: In your area what are some of the things that you are saying, you know what, we can't invest as much in?
Elop: I'll give you a couple examples. We said, for example, when we look at our business intelligence strategy, we have a great opportunity to democratize business intelligence, to take advantage of people's knowledge of Excel, to take advantage of the strength of SharePoint. However, having a vertical play in the planning space, monitoring and analytics is good, but in the planning space that goes directly at Business Objects, Cognos and so forth, is an area where ultimately we could be successful but relative to those other bets we need to scale back on.

We also made decisions as it relates to ERP (enterprise resource planning) where we made very clear what our strategy was some months earlier in terms of how we were investing in products, but we had to take a hard look and say, you know what, there are some areas where we've got to manage our investment here...and so pulled back on certain areas.

In unified communications it was an increase in certain areas, but there were some peripheral elements and things we were working on. We said, you know what (we have to go after) voice, Cisco.

Q: One of the things that came out of Steve Ballmer's comments to analysts this week is he said that Office 14 is coming next year. Some people said, oh, they're pushing it out because of the economy. Is that the case?
Elop: It's not at all related to the economy or anything like that. It's the natural rhythm of how we're executing on that release. So, there was no, "Hey, delay the release because of the economy." Not at all.

Q: You came in certainly vowing to look both at what's really working well at the company and what isn't. What are some of the things that surprised you in both directions?
Elop: On the things that have continued to impress me, this is a great week to answer that question, because you can't help but walk through TechFest and see the degree of innovation here, pure and applied research both, coming into the company, seeing how that translates into product development. I mean, walk around that room as you did, meet the people, and just realize the raw intelligence and capability, all of that raw horsepower that exists at this company is remarkable.

It's also remarkable the absolute scope and breadth of this company. That sometimes leads to the confusion you talk about. It might be months into a program where you didn't even realize something was going on five divisions over and three buildings across; I mean, you just don't know. But the surface area of the company offers so many interesting opportunities.

For example, some of the research you saw or other things that are going on where, for example, some of what informed the video and some of our future productivity and how people will interact with technology for productivity reasons is derived from learning from the game space and what people are thinking about for the future of Xbox and things like that. They're a long ways apart but in many ways it's about human interaction, and all of a sudden you get the benefit of that. If we were just an e-mail company or a word processor company, we would never get the benefit of that insight. So, all of that really brings it home.

I think on the so what's challenging and so forth, I think what you referenced earlier, with that breadth of the company, could we be making tougher decisions sooner? That's why going into this period of constraint and everything, I'm definitely a champion of alignment. Hey, we can't keep doing A, B, and C, let's pick one, let's go, let's get aligned, let's get the teams working together.

I mean, there's obviously some major battles and struggles and all of that that you see in the company, the competition with Google in the search marketplace, there's a lot of examples of that, and yet server market, 10 years ago, I would never have thought about Microsoft as providing mission critical server products, but look at that business now, it's a beautiful thing.

Q:How does Microsoft adjust to the fact that a lot of these new businesses are funded in different ways than Microsoft's traditional software businesses?
Elop: I think--I mean, it depends business to business. I think the most important thing is to go in with your eyes open about what you're doing. You're right, you know, there are very few businesses on the planet like the Windows business or the Office business or even the server business for that matter. Yet at the same time there are new business models emerging that could be stronger or more interesting, and you just have to go in with your eyes open.

What you can't do is you can't say because those business models are different we won't do them. You have to fully embrace new opportunities and lead in that space. If you don't, and someone gets in ahead of you and it turns out to be something new and interesting and exciting, all of a sudden they could be miles ahead of you. I can think of one example here in particular where someone saw something that we didn't see, I guess, and away they went, that being Google.

So, you have to go in with some intelligence about it, some foresight, and you've got to be willing to learn, and you've got to be willing to fail fast, and you discover, hey, we thought this whole thing was interesting, turns out it's a dog, back off and try something different.

I think the company, certainly in my experience now over the last year, is very willing to experiment with and adapt to new and changing business models. The whole concept of Exchange Online, SharePoint Online, for example, in my division, clearly the economics are different. There's a larger revenue opportunity because instead of just getting a certain amount of software revenue, we get software and services revenue for providing that service, but we have to deal with the whole issue of, hey, but we're running a datacenter, and there's (a cost of goods) and gross margins are different and what have you.

But at the end of the day, if we said we're just going to stick with our original business model, well, someone else is going to do that. So, you have to embrace it and you have to be the very best at it, ultimately being interested in ensuring your customers are taking advantage of as much Microsoft stuff as you can possibly help them do.

Q: Why does it matter to have Office in the browser? We've heard for so long from Microsoft about why the best experience for productivity apps probably isn't in the browser. Why is it important to have them?

Elop: Let me tell you where I think the best productivity experience is. The best productivity experience will be one that successfully integrates in a beautiful and elegant way the benefits that you can achieve in a rich client environment, whether it's a PC or refrigerator or whatever, but it's where you have local processing and graphical power to give you the richest experience, marries that with what you can do randomly when you're in a browser on someone else's PC as well as the mobile environment.

It's not about rich client is better than the browser or browser is better than the phone. It's also not about, hey, we're going to have a Web application so we can go and compete with Google and see who can add bolding and underling. That is not the point. The point is that that organization that can deliver on that broad scenario most effectively will continue to be successful.

The way we compete with Google is with the all up Office System. And by the way, you don't just stop at the client, you know, Word, PowerPoint, Excel, OneNote and so forth; it's also about the degree of interoperability with unified communications, with the SharePoint Server, with the CRM Server, all of that. So, now let's talk about competition between that experience for our customers, bolding, underlining, italics in a browser. It's a very different conversation.

So, I will not let you define the competition as our little Web app against their little Web app. That's not the story.

With a tough economic climate figuring to put a crimp on IT spending, Microsoft is already working on honing a message that it can help businesses save money.

In an interview Friday, Microsoft Business Division President Stephen Elop said that companies are certainly re-evaluating their tech spending projects, but tried to make the case that Microsoft stands to fare better than most.

"Relative to Microsoft's general approach of making all technology, all software very affordable...that plays very well at these times," Elop said. "Who knows what lies ahead, but nonetheless, we've got some pretty good messages."

Stephen Elop

Microsoft has been working on getting those messages ready in a hurry. Chief Operating Officer Kevin Turner sent an e-mail to Microsoft's sales force Wednesday night highlighting a dozen or so things the company can do to help customers save money.

The things on the list aren't big surprises--unified communications to reduce travel costs, virtualization to save on server costs, as well as Microsoft's many licensing and financing options.

"It is the case that we are very focused and getting even more focused on having a conversation with our customers around value," Elop said.

But while Microsoft has long grown sales by offering a lower-cost option than software rivals, it now finds others, including Google, using those same arguments against core products like Windows and Office.

Elop reminded me that it's not his first time managing through tough times.

"I've been through a pretty significant economic downturn in the early part of this century--boy that sounds old--when I was at Macromedia," he said. At the time, he said he told his troops that Macromedia could lead through the tough times and come through it stronger at the other end. "I think at Microsoft we can do that even more so."

As a guy who spent a decade in Silicon Valley, Stephen Elop says he, too, had his doubts when he first heard about Microsoft's "software plus services" strategy.

"The initial impression of that, as an outsider, is 'Is that just a cheesy way of saying we are going to hold off as long as we can," said Elop, who was an executive at Macromedia and Adobe Systems before joining Microsoft earlier this year.

Stephen Elop

(Credit: Microsoft )

But, if Elop was initially skeptical, he's now an ardent believer. In an interview in San Francisco last week, the president of Microsoft's business division spoke like a lifelong 'Softie, extolling the virtues of everything from SharePoint to Office Live to Microsoft's OneNote note-taking program.

Microsoft has not always been the easiest place for outsiders, particularly those who have been chief executives in their prior jobs. Elop said that's one of the things he thought about a lot before agreeing to take over for Jeff Raikes, who is leaving Microsoft after a quarter century to become head of the Bill and Melinda Gates Foundation.

In deciding to go for it, Elop said he spoke to folks who had made the transition well, such as Ray Ozzie and Kevin Turner, the former Sam's Club CEO who is now Microsoft's chief operating officer. Elop said he also talked to some for whom things didn't work out so well. (He didn't name names and there's a long list of people who fit that category.)

One of the things that became clear was it doesn't work to come into Microsoft and tell everyone how well things work at other places.

That said, Elop is not a total convert to Redmond's ways. Although he was quick to pull out a Windows Mobile smartphone when asked, he also admits that his whole family uses iPhones and that his was in the car.

These days, Elop justifies using the iPhone as him trying out competitive technologies, an effort that also has him playing with Google Docs and using a host of other Web 2.0 services.

"I'm a believer you have to experiment with these things," Elop said.

Although Elop had many of his negative perceptions changed as he interviewed at and later joined Microsoft, he also said there are some areas where he would like to see things happen faster, particularly when it comes to online services.

He didn't give out much in the way of new product details, but suggested a larger role over time for advertising-funded software. Even some businesses, he said, might want to use some ad-based software.

Elop pointed to, say, a trucking business that might use traditional software for its offices but let those on the road check their company e-mail from a Web-based service. The key word is choice, he said. Businesses will get to choose between traditional software, subscription licensing, or having Microsoft host the software itself. Consumers, meanwhile, will have options funded by a wide range of business models.

There have been a fair number of changes at Microsoft HQ of late, so we wanted to provide a program for those keeping score at home. Here are some of the top executives who have joined the company or are leaving the executive ranks.

This list is neither chronological nor exhaustive. It leaves out recent departures such as dealmaker Bruce Jaffe and strategy executive Charles Fitzgerald.

Instead, I've focused on a few key folks who have left or are leaving shortly who have the biggest impact in Redmond, as well as some key outsiders Microsoft has recruited in recent years.

Who's out:

Bill Gates

Bill Gates
OK. Well, the Microsoft founder isn't leaving the software maker completely. But he did cede his chief software architect title and plans to shift to part-time work in July.

His is the impact most likely to be felt across the company. Even as the company has grown, there was still the notion of a "Bill review" where a project's technical merits were discussed, as well as his twice-yearly "Think Week" where employees submitted papers on new ideas for the company.

Jeff Raikes

Jeff Raikes
Definitely a key part of Microsoft's old guard, Raikes is a onetime Microsoft sales chief, who, in recent years, has been responsible for building the Office franchise and expanding into other areas, such as business intelligence and unified communications.

Raikes, who joined Microsoft from Apple in 1981, is giving up the reins of the business software division at the end of the month, but will remain at the company until September.

Jim Allchin

Jim Allchin
Allchin, who headed the Windows unit, left Microsoft in January 2007, the day after Vista shipped. Allchin had a well-earned reputation as a perfectionist and tireless champion for quality and user experience.

Critics note that, under his watch, Windows projects were often late and had to have planned features taken out to meet already delayed deadlines. Steven Sinofsky, now in charge of Windows engineering, was known at the Office unit for getting releases out on time and staying "on message" in public.

Who's in:

Stephen Elop

Stephen Elop
Elop, who was hired on Thursday to replace Raikes, will bring a number of relevant experiences when he joins Microsoft later this month. His telecommunications experience at Juniper Networks could help on the unified communications side, while his experience at Adobe Systems could help Microsoft with its Silverlight push.

However, one financial analyst characterized him as a "job-hopper." In his most recent job, Elop was at Juniper for just one year.

Ray Ozzie

Ray Ozzie
Ozzie's been there since 2005, but his influence has continued to grow. He's now chief software architect, Gates' old role, and in charge of the company's Live services push.

Ozzie's hiring has been heralded by Gates and CEO Steve Ballmer, but we've heard precious little from him in recent months. He spoke at just two major public events last year--the company's Mix trade show as well as Microsoft's financial analysts' meeting.

Steve Berkowitz

Steve Berkowitz
The former Ask CEO, who joined Microsoft in April 2006, has been pushing the software giant to think less geeky with its Windows Live services.

However, the company's search share has continued to fall, and Berkowitz saw his fiefdom scaled back as part of a March 2007 reorganization. An insider said he may not be the right fit even for his present role.

Brian McAndrews

Brian McAndrews
Seen as a rising star within Microsoft, McAndrews was CEO of Aquantive, which Microsoft snapped up last year for $6 billion.

He now heads up Microsoft's advertiser and publisher efforts, within Kevin Johnson's Platform and Services unit. His domain includes the former Aquantive ad engines, Microsoft's homegrown AdCenter, as well as mobile acquisition ScreenTonic and in-game ad engine Massive.

Kevin Turner

Kevin Turner
Turner has also been around for a while now, having been hired as chief operating officer since August 2005, when he was hired away from Wal-Mart Stores.