Microsoft's chief operating officer used to be the new guy in the company's top executive ranks.
Not anymore. Now, two years into his post, the heat is on: The software maker is still raking in cash, but it needs to adapt its old-line, shrink-wrapped software business to an online world. One of Turner's many jobs is to help convince partners--in many cases, Microsoft's front line with customers--that it won't leave them behind.
Welding a services model to the company's existing business is no small matter. Microsoft has to be careful to not derail its profit pipeline with Windows and Office, yet it needs to launch new services, like Windows Live, Office Live and online business software to keep up with competitors such as Google, Salesforce.com and many others.
At Microsoft's largest partner conference of the year last week in Denver, Turner told News.com about the progress he's made since last year, the challenges that remain, and what it's like knowing that only half of Microsoft's customers actually pay for their software.
Q: A year ago you were pretty fresh in the COO role. Now, a year later, what surprises you still? What are some of the things that you are still working on, and what are some of the things that are better than you thought--or worse than you thought?
Turner: I think that we're much better today about having a common definition of success through our subsidiaries. I feel really good about the fact that we have a common scorecard, a common goal sheet, that people are on the same page as it relates to both how they're compensated as well as how their performance review is (done). That sounds like a trivial thing, but with 80,000 people scattered around the world, if you don't have that common framework that people are working under, then they see things through a different lens. The performance of the company, some of the things that we've put in from an execution standpoint--from an operational excellence standpoint--I think have really made a huge difference, and it shows up in the numbers that we've released through the first three quarters.
I think that we're a company that has long believed in innovation. And I think we're a company that's learning to be operationally excellent. I don't think we've learned it. I think it's in the process of being learned, and that's something that I'm proud of--the progress that the team has made in that regard. They're adapting to that.
People wonder if that will stifle innovation. But all great teams have great discipline. If you do it well, discipline is not the enemy of enthusiasm, it actually becomes the enabler to do the things that you want to do. That's where the innovation really takes hold. That's where you're seeing these products hit these cycles. You know--bam--we're right back out there with another SQL Server version, another Visual Studio, and now Windows Server 2008. Those are huge launches on highly successful products that are coming in the marketplace in a good cycle. If you can keep turning that and keep showing that, partners win, customers win, and the whole ecosystem wins. So that's the theory; that's what we're working on, and it's fun. I love my job.
You talked about being more predictable, in having product releases regularly. There was that study that came out recently about software assurance (a Microsoft software licensing program) which found more ambivalence on the part of large customers to sign these deals, in large part because they aren't seeing regular releases. They don't see the road maps, and they're not confident that they're going to get their money's worth. What's your view on that?
Turner: I'm not seeing that or hearing that from the customers in the marketplace. We're not seeing any slowdown in that respect. There's an obligation on us, though. Steve Ballmer stood up last year and said something to the effect of, "never, ever, ever, ever, ever again will we have a delay like we had with Vista." I think that people care less about what you say and more about what you do. And--boom--(we're) showing that FY08 innovation coming to the marketplace. That's the kind of cycle that our customers expect. If we don't deliver it, people won't see the value in it. All we can do is continue to demonstrate the ability to do it and believe in it.
I do know this: Nobody is investing more, and nobody is trying harder to bring their own IP into the marketplace. I do know that. No other technology company is trying to do it the way we're doing it.
One of the things we are seeing is that there are more and more different versions of Microsoft's products. Is that what customers want?
Turner: You mostly let customers decide. It's harder on partners. But most customers are the ones driving for a different offering: they want different functionality or a different price point, or both. We typically listen to customers and where they lead us, then that's where we're going to end up building the products.
On the flip side of that, one of the secrets of the company is that we've really changed a lot of our licensing programs. So we went from 107 different licensing programs a year ago down to 23. One of the questions I get is, "When are you going to simplify licensing?" When I came in, that was one of the key things that I chartered with Joe Matz, who runs our worldwide licensing group for me. He's shrunk those dramatically, and our customer satisfaction number around licensing has improved dramatically. Partners want it. We've made a lot of changes in that regard and we still have a long way to go.
The thing that I want people to know about Microsoft is we're willing to listen, we're willing to improve, we've made progress, we want to keep getting better, and we need the partner input. They give us a lot of great input, and we need that. I got several notes already today.
What are some of the things on your road map for the year? What are your main priorities right now?
Turner: I'm working hard on making sure we're winning customers, and that includes share, it includes Linux, it includes making sure that we're bringing value to the marketplace for customers. I'm making sure that we just make it habitual to take care of customers, that we really step up our game, that I really rally the partners to help us step up our game because they represent us. The customers vote by what they buy. Being a trusted adviser is a more and more important thing in a decision-making process for an IT person. I want us to keep stepping up the customer satisfaction and the partner satisfaction that we're driving.
When I look at growing the business, we have huge opportunities in emerging markets. I mean, if you look at the BRIC countries, Brazil, Russia, India, China--you know, those are great opportunities for us to figure out how to grow our business, to really figure out how we can get after antipiracy in a thoughtful way, how we can continue to monetize new things that we have coming to the marketplace like HPC, this high-performance cluster computing. When you think about that and how we can get better at that, there's a big opportunity for us to grow new businesses, software plus services, Office Live. You know, what a challenge for us to figure out new ways to grow our business and grow it through partners.
And the last one, but certainly the most important one, is people. That it's people who actually make things happen, that it's people who create value, that it's people who take care of customers, that it's people who communicate those road maps.
That's the one thing that I think about the most: Do we have the right people? Do we have the right team? Is there something I can be doing to develop or grow them or train them or help them? Or what do they need from me?
On the issue of product road maps, on the Windows side it seems like we're actually getting less clear direction from Microsoft. They're not even talking about when we're going to have the first service pack for Vista, which I imagine, for your team trying to sell Vista, seems like a step backwards, at least externally.
Turner: Well, no, I think that's certainly a fair challenge to us. I think that we got out of the gate a little bit slower than any of us would have liked from an application compatibility standpoint, but we fixed that. We've spent a ton of time making sure we've got 10,000 devices and 1,900 applications, and we've spent a ton of time getting that right.
When you look at the security engineering that went into Vista, we're very pleased with the progress. That's a journey. That's not a destination, so we're working on that, but good progress has been made. There'll be a (Vista) SP1, and there'll be another release of the next Windows after Vista. You'll hear more about that in the upcoming months.