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Comes 1420-->1992 MS-DOS 6 marketing issues | 244 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Comes 1420-->1992 MS-DOS 6 marketing issues
Authored by: foulis on Wednesday, May 22 2013 @ 09:58 AM EDT
<p
align=right><b>PLAINTIFF'S<br>EXHIBIT</b><br><u>
;1420</u><br>Comes v. Microsoft</p>
<u><b>Erik Stevenson</u></p>
From:</b> Paul Maritz<br>
<b>To:</b> Brad Chase; Brad Silverberg; Steve Ballmer<br>
<b>Cc:</b> Mike Maples; Richard Freedman<br>
<b>Subject:</b> RE: Key MS-DOS 6 Marketing Issues<br>
<b>Date:</b> Wednesday, September 02, 1992 5:40 PM</p>
I agree with your recommendation on both pricing (hence discount, MS-DOS upgrade
is important enough to warrant this) and on not selling direct (we need the
sustained business).</p>
---------<br>
From: Brad Chase<br>
To: Brad Silverberg; Paul Maritz; Steve Ballmer<br>
Cc: Brad Chase, Mike Maples; Richard Freedman<br>
Subject: Key MS-DOS 6 Marketing Issues<br>
Date: Wednesday, September 02, 1992 3:42 PM</p>
There are two key issues we need to resolve in order to move forward with our
marketing plans for the MS-DOS 6 Upgrade. The objective of this mail is to brief
you on these issues and see if there is a consensus we can arrive out. Then with
the basic framework in place we could brainstorm on the rest.</p>
The Key Issues<br>
================<br>
1. The SRP for the Upgrade<br>
<ul><li>Recommend $99.95 with a special discount structure that
leads to a $79 street price at aggressive
resellers.</li></ul></p>
2. Do we sell direct?<br>
<ul><li>Recommend: no</li></ul></p>
Please read the detail below and reply with your comments on these two issues.
Other issues for consideration are summarized as well but pls do respond with
your thoughts on #1 and #2.</p>
SRP<br>
= = = = = = =<br>
The MS-DOS team strongly recommends increasing our revenue per unit from $54 (b4
rebates) to around $67. The powerful features in the product justify the
increase. Plus PSS costs and COGs of version 6 will be much higher than 5. The
exact number ($67, $68, etc.) would be determined with mikene with the goal
being to hit a street price of $79 at aggressive resellers and to always be
under $100.</p>
To hit a low street price of $79, we must either:<br>
* Raise SRP to $129 and use the standard 46% MS discount, or<br>
* Leave the SRP at $99.95 and lower the discount to a non-standard
31%.</p>
We prefer the latter as did mikene originally. However steve, mike just told us
that you want to keep discount structures for our resellers.</p>
Raising the SRP to $129 has some clear disadvantages:<br>
* Puts our price over $100 in all articles that mention SRP<br>
* Precludes us from using SRP as a marketing tool in our ads, etc.<br>
* Forfeits a possible advantage or puts us at a disadvantage vs. Novell. It's
likely that the SRP of the "Netware Desktop for DOS" (DR DOS 7) will
be $99 or $129. If our SRP is $129 we're at parity at best.</p>
We're not in a position to judge the customer service implications of a
non-standard discount. However, a $99.95 SRP is best for our
business.</p>
Do we sell the Upgrade direct?<br>
= = = = = = = = = = = = = = = = = = = =<br>
Recommendation: No</p>
We analyzed the Win 3.1 Upgrade numbers, talked to mikene, and have drawn two
conclusions:</p>
<center>Page 1123</center>
<p align=right>MS7079805<br>CONFIDENTIAL</p>
<hr>
<br>
Direct sales seem to hurt distribution and subsequent staying power<br>
--------------------------------------------------------------------------<br
>
* Although Win Upgrade 120-day sell-through (including direct) exceeds MS-DOS
Upgrade 120-day sell-through, we expect 12-month sell-through to be far less.
Win upgrade distribution breadth is 60% of what ours was: direct pre-selling may
have hurt their distribution and their staying power.<br>
* Mikene said that our initial orders will be 30% lower if we tell resellers
we're going direct.</p>
The big profits are from upselling<br>
-------------------------------------<br>
* After making some reasonable assumptions, we determined that Windows made
about $6M in incremental profit by going direct, $4M of which was from Font
Packs and Resource Kits.<br>
* Windows only sold 1/4 of their 120-day Upgrade volume direct, and, like us,
missed the opportunity to upsell in the channel. A well-executed channel upsell
could DWARF direct upselling.</p>
Summary<br>
---------<br>
* There are many benefits of selling direct - it closes the sale, gives us more
revenue per unit than going through the channel etc. However:<br>
* The MS-DOS 5 Upgrade was and still is a huge seller without any direct sales:
why mess with success?<br>
* It's unlikely we could come close to Windows' direct success anyway since we
will neither pre-sell direct nor sell direct at low street price.<br>
* At what price do you sell direct? An $89 direct offer at launch is neither
fish nor fowl: it hurts our channel effort, may upset loyal customers (who could
buy through the channel for $79) and yet will not generate huge direct sales. A
$79 direct offer will get more sales but also will lessen channel enthusiasm and
support.</p>
If everyone agrees on the pricing and distribution strategy proposed here then
we need to get together to brainstorm on some big ideas.</p>
Some key issues to think about are summarized below</p>
If we do not sell direct what is the offer in Focus and other
mailings?<br>
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
=<br>
We want to come up with something innovative that will drive people to resellers
in droves and help lead to an explosion at launch.</p>
* If we give our registered users something for going to the store and buying
Astro we gain customer goodwill and help drive people to the stores. However, we
give away profits b/c these early buyers tend to be price
insensitive.</p>
* We could provide a registered user an incentive on the upsell. For example on
the MS-DOS 6 Upgrade 3 pak. In this case we more than cover the cost of the
incentive in the upsell.</p>
Incentive ideas we have tossed around: frequent flyer miles, wall st journal or
time subscription for some period of time, ms-dos books etc. We would brainstorm
on this too. Something like buy the 3-pak and get 1000 frequent flyer miles or
some other prize could be appealing.</p>
Tie-ins to other products<br>
= = = = = = = = = = = = = = = = = = =<br>
We want to hook box-cars (upsells) to the locomotive (MS-DOS 6 Upgrade). A
profitable boxcar meets these criteria:<br>
* It's related to the locomotive<br>
* It's cheap enough to be an impulse purchase<br>
* It has broad appeal</p>
The Font Pack and Resource Kit were perfect not only because they met all three
criteria, but also because they were new products. Everyone was a potential
customer because no one owned them.</p>
If the goal is to make money, what should we upsell?<br>
-------------------------------------------------------<br>
<center>Page 1124</center>
<p align=right>MS7079806<br>CONFIDENTIAL</p>
<hr>
<br>
We should probably upsell as few products as possible to keep it simple and also
because success hinges on the reseller stocking the upsells, which won't happen
if there are too many. The many Windows upsells - Entertainment Packs, Font
Pack, Jumbo, etc. - all have limited appeal since (1) many people already own
them, and (2) they're no good for our 40%-50% non-Windows customers.</p>
Our original strategy - upselling people to MS-DOS 6 Upgrade 3-paks, meets all
the criteria above although it is pricey for an upsell. Our current thinking is
that the 3-paks have broader appeal than any Windows product - this would be a
good topic for brainstorming - the potential is high and opinions
vary.</p>
How about upselling for "strategic" reasons?<br>
---------------------------------------------------<br>
We could upsell a strategic product - Windows, Sparta or Access for example - in
order to boost its distribution. However, no strategic product we considered
seems to make a good upsell based on the above criteria. They're either too
expensive or lacking in broad appeal.</p>
<center>Page 1125</center>
<p align=right>MS7079807<br>CONFIDENTIAL</p>


[ Reply to This | Parent | # ]

Comes 6262 (Middle Management Retreat)
Authored by: Anonymous on Thursday, May 23 2013 @ 05:17 PM EDT
http://groklawstatic.ibiblio.org/pdf/iowa/www.iowaconsumercase.org/011607/6000/PX06262.pdf


<p>
<b>From:</b> Ben Slivka<br />
<b>Sent:</b> Thursday, December 11, 1997 2:26 PM<br />
<b>To:</b> Holly Marklyn<br />
<b>Subject:</b> mmr mails for you

</p>

<p>
<em>[Ed: Document icons and truncated file names omitted.]</em>
</p>

<p>
Holly, when you've read these, let me know when you want to get together and
chat.<br />
You should also get a copy of the Barry Oshry books about top/middle/bottom
spaces - I've got extras if you want to drop by, 30/1216.<br />
Key thing is not to be "bottoms" and bitch about how much better the
company would be if "tops" did X, Y, and Z &ndash;
instead, we &ndash; as middles &ndash; need to exert leadership and
start making the changes we want ourselves.

</p>

<p>
Looking forward to meeting with you!<br />
--bens
</p>

<p>
<b>From:</b> Ben Slivka<br />
<b>Sent:</b> Sunday, December 07, 1997 8:32 PM<br />

<b>To:</b> Bob Kruger (Exchange)<br />
<b>Subject:</b> FW: Middle Management Retreat: a short summary for
you
</p>

<p>
-----Original Message-----<br />
<b>From:</b> Ben Slivka<br />
<b>Sent:</b> Wednesday, November 26, 1997 1:18 PM<br />

<b>To:</b> Paul Maritz; Jim Allchin (Exchange); Brad Silverberg;
Craig Mundie; Bill Gates<br />
<b>Cc:</b> Jon DeVaan; Bob Muglia (Exchange); David Cole; John
Ludwig; Brad Chase; Moshe Dunie; Rich Tong; Harel
Kodesh; Natalie Yount<br />
<b>Subject:</b> Middle Management Retreat: a short summary for you
</p>

<p>
45 middles (see to: list below) spent M &amp; T learning about
organizational dynamics, and then applying that knowledge to
the key (organizational) problems we see at Microsoft.

</p>

<p>
It was clear to me and I think most of the middles that we
<u>middles</u> need to change how we operate.<br />
We need to take on responsibility for identifying cross-group problems and
working together to resolve those problems.
Instead of constantiy looking to "tops" (you guys) to fix problems and
escalating to you to resolve cross group conflicts.
We need to take problems off your plate so you have more time to focus on goals
and strategy and leadership
</p>

<p>
Also, we conducted a small "retention" survey, and the results were
very encouraging &ndash; contrary to popular belief, almost
<u>no one</u> was planning to leave MS in the next year. 2-4 years
was the most common response, but even there the
comments from most people (I'll send in separate mail) were very optimistic
about MS and very uniform about what
keeps them here.

</p>

<p>
This "middle integration" is going to be an ongoing effort &mdash;
us middles have to get into the habit of working with each
other in productive fashions on a much more regular basis. After the 12/1
presentation by bill/paul to the level 14+ folks,
individual teams are going to incorporate that info into their problems and try
to come back with very, very concrete
actions. The middles will reconvene Wed, 12/3 to review. We'll be sure to copy
you on the results, but our goal here is
to find action items for ourselves. It is <u>not</u> our goal to
dump more issues/problems/actions in your laps (you have enough
already).
</p>

<p>
Please let me know if you want more details/info/etc.<br />
Thanks, bens
</p>

<p>
<em>[Ed: File icon for "MMR Microsoft Problems.doc
(89..."]</em>
</p>

<p>
-----Original Message-----<br />
<b>From: Ben Slivka</b><br />
<b>Sent:</b> Wednesday, November 26, 1997 11:00 AM<br />
<b>To:</b> Andrew Kwatinetz; Anthony Bay (Exchange); Ben Slivka; Ben
Waldman; Bill Baker; Bill Veghte; Blake Irving; Brian
Arbogast; Brian MacDonald; Chris Williams (WPG); Chris Jones; Craig Fiebig; Dave
Reed; David Cole;
David Thompson (NT); David Vaskevitch; Dennis Tevlin; Don Bradford; Doug Bayer
(Exchange); Duane
Campbell; Ed Fries; Eric Engstrom; Eric Rudder; Frank Artale; Grant George; J
Allard; Jawad Khaki; John
Zagula; Jon DeVaan; Jon Thomason; Julie Larson; Kathleen Hebert (Schoenfelder);
Kathryn Hinsch; Megan
Bliss; Moshe Lichlman; Paul Gross; Ralf Harteneck; Richard McAniff; Rick
Waddell; Steven Sinofsky; Ted
Kummert; Tom Button; Will Poole; Yusuf Mehdi; Yuval Neeman<br />

<b>Cc:</b> Andrea Tevlin; Kevin Purcell; Kathy Falzetta; Steve
Guggenmos; Janene Poziombke (American Express Travel);
Natalie Yount<br />
<b>Subject:</b> MMR: Next steps
<b>Importance:</b> High
</p>

<p>
Thank you all for taking the time out of your busy schedules to spend time on
the Middle Management Retreat!
</p>

<p>

I especially want to thank abay and jonde for joining me in sponsoring this
event, and andreaum, kevinpur and kathyfa
from EMD for doing such a wonderful job organizing and planning and advising us.
sgugg and v-jpozio did a super job
coordinating all the RSVPs and the Salish room reservations. And, last but not
least, Barry and Karen Oshry (the Power
&amp; Systems folks) for developing their model of organizations and flying
out to help us learn.
</p>

<p>
The results of the survey were very good news. At least with this group of
individuals, we do have time to do the hard
work to improve the organizational dynamics within Microsoft, and provide each
of us with a more satisfying work
environment. See separate mail from me with the detailed comments from the
survey, and jonde will be sending out the
XL spreadsheet with the rest of the results.
</p>

<p>
I was very impressed by the enthusiasm and professionalism everyone applied to
the simulation, the learning afterwards,
and the work on the Microsoft problems we identified. We've got a lot more work
to do on these problems (see below),
but I think we made some strong progress in the barely 4 hours we spent on them.
I'm sorry we weren't as organized
about "next steps" at the end of the day on Tuesday (we all got an
opportunity to make mistakes and learn something at
the MMR, especialy me!), but i think we managed to veer onto the right path
before we finished.
</p>

<p>
The fundamental lesson from this top/middle/bottom stuff is that middles have to
work together, reinforce and support
each other -- "integrate" -- in order to solve organizational
problems. A quarterly meeting isn't going to cut it &mdash; we each
need to commit to spending quality time on a regular basis to with other middles
to attack and solve the key problems
Microsoft faces. This really is an adjustment for all of us -- we won't be
successful if we stay in our little bunkers/comfort
zones and just focus 100% on our own products/projects. It's also very clear
that we cannot put the burden on the tops to
drive this stuff &mdash; they're already maxed out ("sucking it
up") as it is. Our individual initiative in attacking this global,
cross-group problems is the best medicine &ndash; by empowering ourselves,
we will be empowered!

</p>

<p>
Toward this end, craigfi, frankar, and I are going to draft a "middle
pledge" that will, I think, include a summary of the
middle effective leadership actions (stay out of the middle, facilitate
top/bottom communication, etc.), and also sample
language for review goals re: middle integration. I'm with chrisjo -- I'm going
to middle integration goals to my review!
</p>

<p>
Here is <u>my</u> attempt at recording the problems and top 2 action
items/recommendations &ndash; each of the owners owes me a
more detailed piece of mail today. And, of course, you'll all be working on
these problem areas over the next few weeks
to come up with very concrete action items!
</p>

<p>
Problem: <b>Strategy vs. "Category"</b><br />

Owner: <b>yuvaln</b>
<ul>
<li>Bill/Paul communicate clear, customer-focused goals &ndash; not
specific technology unification</li>
<li>Increase middle-middle communication</li>
</ul>
</p>

<p>
Problem: <b>New Ventures: Innovation vs. Grand Unification</b><br
/>

Owner: <b>Bill</b>
<ul>
<li>Don't encourage architecture &amp; unification at expense of
product shipment &amp; customer focus</li>
<li>Drive unification decisions down into the organization</li>
</ul>
</p>

<p>
Problem: <b>Middles working together better</b><br />

Owner: <b>RichardM, GrantG</b>
<ul>
<li>Middles should meet on a regular basis, supported by tops and review
goals (focus on timely problem solving,
sharing best practices, networking)</li>
<li>Yearly plan: tops set strategic direction, middles work on
implementation, tops force "middle-to-middle" conflict
resolution</li>
</ul>
</p>

<p>
Problem: <b>New Microsoft Mission Statement</b><br />
Owner: <b>andrewk</b>

<ul>
<li>New mission statement: e.g., "Access to the new world of thinking
and communicating"</li>
<li>Relate each groups goals to mission, reorganize as
appropriate</li>
</ul>
</p>

<p>
Problem: <b>How to (re)organize the product group<br />
Owner: </b>johnza</b>
<ul>
<li>Public/permanent org principles: driven by busines objectives and
clear customer objectives</li>

<li>Broader, clearer enlistment process</li>
</ul>
</p>

<p>
Problem: <b>Where are decisions made?</b><br />
Owner: <b>jallard</b>
<ul>
<li>Clear chatters, roles, responsibilities &ndash; meet to review
yearly</li>

<li>Follow through and communicate on decisions</li>
</ul>
</p>

<p>
Problem: <b>Microsoft's Negative Image</b><br />
Owner: <b>kathrynh</b>
<ul>
<li>Strategic Charity &ndash; position MS as the company that is going
to keep the US competitive, improve education, reduce
trade deficit, increase jobs</li>

<li>Program for partner success - win/win approach/culture, PR on partner
success, beef up DRG/ADCU, partnership
audit &ndash; what do they want from us</li>
</ul>
</p>

<p>
&lt;&lt;&lt; end &gt;&gt;&gt;
</p>

<h2>Middle Management Retreat - Microsoft Problems</h2>
<h3>November 18, 1997</h3>

<p>
ABay, BenS, JohnLu, JonDe, SteveSi
</p>

<p>
Here are some ideas for problems/issues to discuss on day 2.<br />
Everyone will have a chance to add to/modify the list at the end of day 1.<br
/>
We'll stack rank the list so that we can attack the most important problems on
day 2.
</p>

<p>
<b>What is your team's core competency?</b><br />
What do you do better than other groups at the company? In other words, if you
could allocate all of your resources on one thing, what would that be? Since
you
don't allocate your resources that way, why not? What is missing from the
company
and other groups that cause you to round out your investments the way you do?
So
much of our time and energies go toward defining around the work others are
doing,
or to trying to "use" other people's code. Is that necessary? Couldn't
we all be more
efficient if we had a clearer competency map for the product teams?
</p>

<p>
<b>Over promise and under-deliver</b><br />
Groups seems to have a need to be the center of the future, to promise far more
than they can deliver. This needs to be balanced with our need to know where we
are going and what our long term goal is, but we make a large number of false
trade-offs based on promises that even the most optimistic person would doubt.
We
need more under-promising and over-delivering.
</p>

<p>
<b>Strategy v. "Category"</b><br />
There is a lot of stress over innovating for the sake of improving our
corporate
strategy v. innovating for the "category" we find each of our products
(noting that
category is an ephemeral concept). Why does this tension seem to breed an
either/or tradeoff? Is that necessary? I don't think it needs to be, but we
don't have
a system in place that appropriately makes these tradeoffs. I think in the past
billg
has been let down by so many local optimizations that he has every right to
assume
we're never doing anything optimized globally. On the other hand, have we gone
too
far on strategy? Did we make the average new hire's job too complex -- imagine
you are starting in Office working on some new feature (perhaps Year 2000
support).
The number of groups, people, products, etc. you need to deal with is
overwhelming.
</p>

<p>
<b>Customer perspective and focus</b><br />
Lots of people talk about customers, but when was the last time any of us
actually
went and listened and watched someone using our product without talking to
them?
When was the last time we used a competitive product instead of our own? When
was the last time we spoke to real customers and not IT directors or people in
the
EBC or at trade shows? I think this is important even if you're in the server
side of
things. What do you know about how your product is used in real life? So many
decisions are based on "feeling" or "intuition" or feedback
from sales and marketing,
and not actual users. Do we have a realistic view of how our products are
perceived
-- so many decisions are false optimizations because we do not share the same
customer (for example, not being consistent in Word and Excel, because we were
optimizing for WordPerfect v. Lotus when our customers were buying
"Office").

</p>

<p>
<b>Where are decisions made?</b><br />
It seems like we spend a lot of time dealing with escalated decisions, either
escalated to us or that we are escalating? Why is this? You can imagine that
every
time this happens someone feels disempowered. It is a symptom of something that
we do this, but what? Why do we not feel like the buck stops with us?
Escalation
should be viewed as a failure. People should feel that they have failed when
they
have to pull in paulma or billg to solve something. Instead, people feel like
heroes
when they escalate, get the backing of upper mgmt, and get to tell the other
team to
back down. Long term this is incredibly damaging -- it builds ill will within
the
company targeted at other teams, and it doesn't develop decision-making and
conflict resolution skills within the organization.
</p>

<p>
<b>Trust</b><br />
Do we as middles really trust each other? Why not? We are all naturally cynics
(or
perhaps Cynics) but do we go too far? How come we are unable to rely on other
teams and people for things? We've had a large number of successes in this
area--
NT4 shipping the shell, Office making Windows applications, NTS shipping
FrontPage,
etc. Is it that these have not been personal wins?
</p>

<p>
<b>Reality</b><br />

We seem to be unable to have realistic dialogs about the values of
technologies.
This is really two problems. First, often the owner of the technology is talking
about
the long-term goals and what will be whereas the consumer/critic is looking at
what
really is (the trust issue). Second, we have large numbers of people that do
technology without a real customer focus (see above). We are a technology
company, but our view needs to have matured to use technology to solve specific
scenarios and problems, not technology because it is "cool" or is
"seems" like it
would "solve" problems.
</p>

<p>
<b>How can we work (middles) together better?</b><br />
In general we have a hard time getting groups to commit to work together. Even
when a commitment is made, it is even harder for the end result to be achieved.
What would we have to do to make it easy for groups to work together? What
things
have been successful? What things have caused problems? What guidelines should
we use to detect a "good" commitment vs. a "bad" one? For
example, VBA
commitment with Office was "good" because it had resources dedicated
to the
deliverable, clear statement of priorities communicated to the groups, and a
reasonable amount of trust in the groups' ability to deliver to each other that
included shared schedule milestones. (There are plenty of skeletons too, to be
sure.) It is hard to imagine a world where the need for cross group
dependencies
goes away, so it is important to figure out how to make this work.
</p>

<p>
<b>New ventures: Innovation vs. Grand Unification</b><br />
We have an extraordinarily difficult time going into new areas of work. We joke
that
we would never have been able to build FrontPage at Microsoft (witness
<i>Blackbird</i>)
because it would have been crushed under the weight of strategy (not everyone
has
the tenacity bens did with IE, along with the backing of bradsi). Why is this?
If we
are to succeed long term we need to recognize that not every product is
strategic at
inception, and some even become strategic with some pain along the way. There
seems to be a very large conflict between "innovation" and "grand
unification
theory". Many people find that they are asked to innovate within the
confines of the
strategy-of-the-day, and that these confines preclude true innovation. It seems
like
when you want to start a new effort that ignores or disagrees with the
"strategic
direction", groups doing the "strategic" work try to kill your
project. At the same
time, it is true that we need to improve our existing product line, and so we
need to
ensure that innovation occurs on our existing code bases.
</p>

<p>
<b>Partnering</b><br />
We do not make it a priority for the company. it is not part of anyone's goals
typically. We are learning now as a company that, if the industry does not feel
that
they can participate in your success, then they will go to any extreme to
prevent
your success. Some of our most important teams show disdain for partners. For
instance office -- only 14 products are listed as being office compatible, and
some of
them are Microsoft products. Do we not care about partnerships with office?
</p>

<p>
<b>The Microsoft mission statement</b><br />
"A pc on every desk and in every home" is no longer stirring or that
relevant. We
have largely met this goal or have gotten as close as we can practically get.
We
need a new mission. It needs to be an industry mission -- for us to grow, we
need
to grow the entire industry -- there is no room for us to gain share. We need
to
articulate to the world how we are going to grow the industry. Sun has been
great
at this with the WORA message -- it is not a "buy sun products"
message, it is an
industry message. We need something that addresses how we will grow the whole
industry over the next 10 years
</p>

<p>
<b>Senior management should focus on setting policies and
goals</b><br />
We need senior mgmt to lead us by providing us with this mission, and by
setting
corporate policy on business issues. Senior mgmt should not be making detailed
decisions on storage infrastructure. We have people who are more capable of
doing
that and can do that given the right goals.
</p>

<p>
<b>How should BillG/PaulMa "manage" the product
group?</b><br />
We likely agree we are unhappy with "the deal" as it exists for us
today. What
should the deal be? Focus on decision-making authority at different levels of
the
organization. What business processes should be owned at different levels? How
do
product decisions and product interoperability get decided? What are legitimate
levers of control for Bill and Paul to exert? How do you wish your relationship
with
Bill &amp; Paul worked? It would be interesting to think about this from
different levels in
the organization (i.e. bradsi/jimall will think about it differently than
jonde/davidcol/johnlu/moshed/bobmu than stevesi/frankar/etc...)
</p>

<p>
<b>Is the product group organized optimally today?</b><br />
Ignoring the needs/skills of individuals within paulma's group, what criteria
and
priorities would you use to organize the product group? What are the key
business
objectives, what are the customer requirements? Some clear input to paulma,
jimall, etc on how we would like to see the organization structured. Not in the
sense
of who manages which bits or products, but in the sense of a clear "command
and
decision hierarchy" so that what key functions actually we are empowered
to
drive/own is clear. Most of us feel generally unempowered today. Consider the
analogy of the navy, which has structure that everyone can understand and
manage
within. We don't want something so rigid, but if I own product "x" or
project "y",
then my span of control should be clear to me, and clear to the other people I
work
with. And should not be randomly usurped. This needs to fit into the discussion
above about middle relationships as well as upwards and downwards. Now is the
time to set up a structure where paul, jim, and brad focus on a higher order set
of
issues and stay out of the day to day details while empowering us to run those.
So
we should describe what we mean by that to whatever degree we can agree and
also
what direction and leadership we want from them
</p>

<p>
&lt;&lt;&lt; the end &gt;&gt;&gt;

</p>

<p>
<b>From:</b> John Zagula<br />
<b>Sent:</b> Friday, November 28, 1997 10:23 PM<br />
<b>To:</b> Ben Slivka<br />
<b>Cc:</b> Ben Waldman; Moshe Lichtman; Craig Fiebig; John Zagula;
Jon DeVaan; Anthony Bay<br />

(Exchange); Erin Finnegan
<b>Subject:</b> MMR Topic: Product Group Organization - Draft
Summmary
</p>

<p>
Here's my attempt at summarizing our discussion and conclusions. Please jump in
and comment on anything missing or
inaccurate.
</p>

<p>
<b>Topic:</b> How is the way the product group is current organized
helping or hindering our ability succeed? How could we
organize more effectively?
</p>

<p>

<b>Basic Recommendations for Paulma:</b>
</p>

<ol>
<li><u>Take the time to enlist input on the reorg from a broader set
of people.</u>
<ul>
<li>It's more important to engage the people who be effected up front as
it is to quickly attempt to solve their problems.</li>
<li>A more open process for determining the overall structure will make
detailed implementation more effective and
quicker.</li>
</ul></li>
<li><u>Determine and make public the goals and principles driving
the organization decision</u>
<ul>
<li>Base these at least in part on the input received from the process
above</li>

<li>It is assumed that the final organization proposed could be easily
mapped against these principles</li>
</ul></li>
</ol>

<p>
<b>Initial Observations and Discussion Summary:</b>
</p>

<p>
<u>Problems with current orqanization</u><br />
Overall, the problems all seem to stem from complexity (of the structure, of the
product lines, of dependencies, of
communications) and <i>fragmentation</i> (of priorities, of
authority, of ownership). This results in the following:

<ul>
<li>Customer confusion - they have to work through our complexity; they
are looking for a unified solution or strategy,
we don't have one for them, every division has a different answer. Example - try
finding all the info you need about
any topic on microsoft.com</li>
<li>Business decisions/strategy are fragmented - for every major problem
or issue there is more than one clear owner,
escalation tends to be forced to higher and higher levels where the answers
remain at the vision level rather than the
strategy level; many of these cross-divisional problems go on being un-addressed
because no single owner arises.<br />
Example - who owns our Notes strategy?</li>
<li>There is no place where our technology and business strategy converge
below the top. Example - how has Digital
Nervous System get translated into actions/messages/product strategy that hits
the customer?</li>
<li>This complexity goes beyond strategy to simply getting things done.
There are too many dependencies to manage.<br />
Example - no one owns all of the four Ps for any marketing effort (pricing is
owned by the customer units or Steve,
product is owned by the product group, promotion by marketing, and
place/distribution overlaps between marketing
and customer units).</li>
<li>Given this complexity we general revert to a tactical focus. Example -
Home Essentials, a tactical bundling solution
to the strategic goal of moving into the home market.</li>
<li>Priorities/trade-offs are not clear or not happening between groups.
It is very hard to kill low priority efforts.<br />

Example, team manager (????)</li>
<li>Motivating people is more subtle than it used to be. Example - it is
no longer as simple as rallying everyone behind
"beat the competition "</li>
</ul>
</p>

<p>
<u>Advantages of current organization</u><br />
For all of these problems, we are clearly still doing something right.
<ul>
<li>Large, clear competitive threats still generate quick, unified focus.
Example - Netscape/IE</li>
<li>Discipline - in product shipping, marketing execution etc.</li>
<li>Through-put, we still do an amazing number of things.</li>

<li>Good people -there is still a high level of faith in the company as a
whole, and a general willingness to stick it out
while we sort some of these problems out.</li>
<li>We continue to ship award winning products.</li>
</ul>
</p>

<p>
<u>Scope</u><br />
The issues above affect all aspects of WPG and beyond:
<ul>
<li>Product strategy</li>
<li>Marketing</li>
<li>Sales/field</li>

</ul>
</p>

<p>
<u>Potential Principles for Organizational Change</u><br />
<ul>
<li><i>Flatter</i> - fewer layers of decision
making</li>
<li><i>More clearly prioritized</i> - fewer groups driving
solving the biggest problems (freight trains, big missions, core product
lines, core customer focus)</li>
<li><i>Simpler</i> - in relationship to the customer, the
competitor set, the product interdependencies, economies of scale</li>

<li><i>More fully empowered</i> - all aspects of business and
strategy ownership and authority delegated to clear mission
owners, fewer dependencies</li>
<li>Clarity - everyone knows what the priorities are and what their role
is in addressing them. Changes in priority are
communicated.</li>
<li><i>Integration resources</i> - if integration is a
priority, then dedicated resources to drive management of the
interdependencies
</ul>
</p>

<p>
<b>Next Steps for Group:</b>
<ul>
<li>Work on retining the principles</li>

<li>Invite other participants to the discussion (possibly people from the
customer units)</li>
<li>Meet on Tuesday - my admin will set up meeting with all on the cc
line</li>
<li>Present to the rest of the group on Wednesday</li>
<li>Adapt principles based on group input.</li>
<li>Suggest organizational alternatives.
</ul>
</p>

<p>
<b>John Zagula</b><br />
Desktop Applications Marketing<br />

johnza@microsoft.com<br />
<u>http://dadweb/officecom/</u><br />
<u>http://www.microsoft.com/office/</u>
</p>


<p>
<b>From:</b> Ben Slivka<br />
<b>Sent:</b> Sunday, December 07, 1997 8:31 PM<br />

<b>To:</b> Bob Kruger (Exchange)<br />
<b>Subject:</b> FW: MMR: Wed 2-5pm, 12S/1094 (Whidbey), my notes on
billg talk today
</p>

<p>
-----Original Message-----<br />
<b>From: Ben Slivka</b><br />
<b>Sent:</b> Monday, December 01, 1997 10:36 PM<br />

<b>To:</b> Andrew Kwatinetz; Anthony Bay (Exchange); Ben Slivka; Ben
Waldman; Bill Baker; Bill Veghte; Blake Irving;
Brian Arbogast; Brian MacDonald; Chris Williams (WPG); Chris Jones; Craig
Fiebig; Dave Reed; David
Cole; David Thompson (NT); David Vaskevitch; Dennis Tevlin; Don Bradford; Doug
Bayer (Exchange);
Duane Campbell; Ed Fries; Eric Engstrom; Eric Rudder; Frank Artale; Grant
George; J Allard; Jawad Khaki;
John Zagula; Jon DeVaan; Jon Thomason; Julie Larson; Kathleen Hebert
(Schoenfelder); Kathryn Hinsch;
Megan Bliss; Moshe Lichtman; Paul Gross; Ralf Harteneck; Richard McAniff; Rick
Waddell; Steven Sinofsky
Ted Kummert; Tom Button; Will Poole; Yusuf Mehdi; Yuval Neeman; Andrea Tevlin;
Kevin Purcell; Kathy
Falzetta<br />
<b>Cc:</b> Brad Chase; Deborah Black; Lou Perazzoli; Ed Stubbs;
Brian Valentine (Exchange); Rich Tong; Jonathan
Roberts; Russell Stockdale; Tod Nielsen; Dawn Trudeau; John Ludwig<br />
<b>Subject:</b> MMR: Wed 2-5pm, 12S/1094 (Whidbey), my notes on
billg talk today
</p>

<p>
Given the billg talk today, I'd like to propose that instead of revisiting the
topics from the retreat, we do the following:
</p>

<p>
We spend the lirst half hour in small groups (3-5 people) identifying top 3-5
problems for MS (we'll start with the billg list
of key scenarios and technologies from today), then merge them up to form a
single, prioritized list. Then, we'll break up
into groups to work on these top problem areas.
</p>

<p>
thanks, bens
</p>

<p>
Here are my notes:
</p>

<p>
<b>BillG 12/1/1997 Presentation to Level 14+ MS People</b>
</p>

<p>
Talk about strategy mostly today, some on public perception.
</p>

<p>
"A glimpse, to inspire your confidence in senior management, about how we
develop strategy" [bill rolls video of BillG
and SteveB in a VW Golf &mdash; take-off on the VW commercial &mdash;
with the "da, da, da" sound track. Bill plays with a little doll,
Steve and Bill make strange hand motions, they find a Sun machine in a garbage
pile at curb side, load it into their car,
later it smells, they dump it.]
</p>

<p>
Going to talk about "MS Version 3.0" &ndash; version 3.0s
typically have very few bugs, are very successful.
</p>

<p>
<b><i>Best of Times</i></b>
</p>
<ul>
<li>Great people</li>
<li>Product strength (Win9x, NT, Office, BackOffice) &mdash;
integration is our key strength</li>
<li>Innovative work in new areas: MSNBC is leading web new source,
Expedia, Barney</li>
<li>Great research</li>
<li>Most admired company</li>

<li>Hardware innovation &mdash; prices going down, screen resolution
and hard disk capacity increasing</li>
<li>Vision of Digital Nervous System [for companies], web Lifestyle [for
individuals]</li>
</ul>

<p>
When we start a new business, important to be open minded, may take years to
becomes profitable.
</p>

<p>
At the CEO conference, attendees wanted to hear more from us on how
prescriptively companies should adopt
technology. We tried to avoid being salesy at the first conference, we'll do
more next year.
</p>

<p>

<b>DavidV "Silent Boom" slide</b>
</p>

<p>
Shows rate of adoption by US households of various technologies over time
(telephone, electricity, TV, radio, microwave,
etc.). PC and Internet adoption is well ahead of the curve vs. all other
technologies.
</p>

<p>
<b><i>Digital Nenfous System</i></b>
</p>
<ul>
<li>Disseminate information from structured and unstructured
sources</li>
<li>Automate informal and formal business processes easily at low
cost</li>

<li>Requirements
<ul><li>Integration</li>
<li>Internet-scale directory and security</li>
<li>Linguistics</li>
<li>Great collaboration</li>
<li>A new generation of Office</li>
<li>A clear platform for developers &mdash; very confusing now, ADCU
should help</li>
</ul>
</li>

</ul>

<p>
<b><i>Notes vs. Exchange</i></b>
</p>
<p>
We succeed in top-down selling situations, but then find departments have Notes
apps deployed that are very hard to
displace. Historically we were the bottom-up sellers &mdash; the tables are
turned now with Notes and Exchange
</p>

<p>
<b><i>Web Lifestyle</i></b>
</p>
<ul>

<li>A widely accepted Internet identity - so you can visit sites, shop,
etc. without constantly reentering infomation about
yourself</li>
<li>Communicate using rich content with</li>
<ul>
<li>Individuals or groups</li>
<li>Real~time or asynch</li>
</ul></li>
<li>Requirements</li>
<ul>
<li>MegaServer &mdash; need to create a service for mail, schedule,
files, etc.; need to define and lead development of key
protocols (or AOL, others will do it instead)</li>

<li>Simplicity</li>
</ul>
</li>
</ul>

<h2>Competitors</h2>

<p>
<b><i>Lotus Notes</i></b>
</p>
<ul>
<li>Exchange doing well in US, Europe</li>
<li>Notes growing strongly, hard to displace once companies adopt
Notes</li>

<li>We lack solution today for cases where notes is strong &mdash; MS
is torn between SQL and Exchange, Notes solves some
problems better than either SQL or Exchange.</li>
</ul>

<p>
<b><i>Oracle</i></b>
</p>
<ul>
<li>Oracle 8 was very well executed &mdash; on time, great
features</li>
<li>70% database share in corporations</li>

<li>Taking on communication/collaboration</li>
</ul>

<p>
<b><i>Netscape</i></b>
</p>
<ul>
<li>High browser share</li>
<li>Most credible for client-side middle ware</li>
<li>Not being successful in e-mail</li>
</ul>

<p>
<b><i>Sun with IBM help</i></b>
</p>
<ul>
<li>Java</li>
<li>Building alternate OS promising WORA (write once, run
anywhere)</li>
</ul>

<p>
<b><i>AOL</i></b>
</p>
<ul>
<li>11 million subscribers</li>

<li>Building AOL "environment"</li>
<li>Could become major middleware competitor</li>
</ul>

<p>
Bill Gurley, formerly analyst (now a VC), wrote about "software as a
service" in FORTUNE magazine.
</p>

<p>
<b><i>Newcomers</i></b>
</p>
<ul>
<li>Hotmail? &mdash; 10+ million accounts, half of them actively
used</li>

<li>Visto? &mdash; file replication: "briefcase" on the
web</li>
</ul>

<p>
<b><i>Intelligent TV</i></b>
</p>
<ul>
<li>Oracle, Sony, Thompson... -- very important, will compete with PC.
We're working hard to sell TCI, others on our
technology</li>
</ul>

<p>
<b><i>Handheld devices</i></b>

</p>
<ul>
<li>PalmPilot</li>
</ul>

<p>
<b><i>The Worst of Times</i></b>
</p>
<ul>
<li>Public attacks &mdash; DOJ, Nader, Internet
Competitors</li>
<li>Competitors aligned &mdash; "funny, it's not anti-trust if
they are ganging up on Microsoft"</li>

<li>PC too hard to use &mdash; should have put at the top of this
list</li>
<li>Stock price &mdash; too high, many people in this room have a lot
of financial freedom</li>
<li>Unclear role in new markets (like set top box)</li>
<li>Software as a service &mdash; many service providers may provide
more and more software functionality for free to sell
service</li>
<li>Organizational difficulties with technologies, scenarios and
empowerment</li>
</ul>

<p>
It's strange that "people are worried about what we
<u>might</u> do" &mdash; like Gary Reback
</p>

<p>
"WebTV &mdash; advertising is <u>the hope</u> for
profitability"

</p>

<p>
<b><i>Microsoft Image Study</i></b>
</p>
<p>
[Bill showed several slides on ratings both by PC users and the general public.
Some of the trends were encouraging,
others discouraging. The negative press re: DOJ and Nader have had an impact.
Went by too fast for me to transcribe it
all.]
</p>

<p>
<b><i>Key Scenarios</i></b>
</p>
<ul>
<li>Simple use of PC</li>

<li>WinTone: Totally managed PC</li>
<li>Collaboration &mdash; securing and replicating
information</li>
<li>MegaServer: sharing files, messages, schedules with
roaming</li>
<li>Digital Photography</li>
<li>Tablet PC in a meeting</li>
<li>Natural language: web search, phone</li>
</ul>

<p>

<b><i>Key Technologies</i></b>
</p>
<ul>
<li>Simple user model</li>
<li>Unification of files, mail, web, directories</li>
<li>Forms</li>
<li>Natural language</li>
<li>Security</li>
<li>Schema for common objects: people, places, products, ...</li>
<li>Error management: events, logging, help, ...</li>

</ul>

<p>
<b><i>1998 Management Changes</i></b>
</p>
<ul>
<li>Increase dialog among top contributors and between groups</li>
<li>Clear architectural leaders and community of architects</li>
<li>Assign key scenarios to champions</li>
</ul>

<p>
<b><i>1998 Key Objectives</i></b>

</p>
<ul>
<li>Win95, NT5, Office 9x, SQL 7: TCO</li>
<li>MSN focuses on MegaServer using platform technology &mdash;
biggest regret: didn't assign critical mass of developer
talent to MSN</li>
<li>Establish #1 position for IMG properties</li>
<li>Clear message to developers: DNA/Win94, including COM+</li>
<li>Establish WinCE on non-PC devices</li>
<li>Great start on Simplicity and Linguistics</li>
</ul>

<p>
"Cannot manage products as we have in the past" &mdash; we're too
big now
</p>

<p>
<b><i>Q&amp;A</i></b>
</p>
<p>
Q: What about Yahoo and Nintendo as competitors?<br />
A: Yahoo we compete with in some areas, collaborate in others &mdash; Yahoo
distributes some of our IMG properties today.
Nintendo doesnt think of themselves as broadly [as they might], so not a big
concern now.

</p>

<p>
Q: What about code security on the Internet?<br />
A: Yup, that's important. Security is a hard problem, won't be a single owner
for security.
</p>

<p>
Q: How do we concretely simplify developer message in 1998?<br />
A: Hard in 98, not easy in 99 &mdash; we need people inside MS to work
together to solve this. This is the hardest near-term
problem for ADCU.
</p>

<p>

Q: How is our relationship w/Intel?<br />
A: Intel has two low-end problems: (1) low-cost PCs (like Cyrix MediaGX)
&mdash; consumers and businesses are interested in
$600-700 PCs. Good for us, bad for Intel; (2) Hydra could become emotional issue
for Intel, but it still requires mips on
the server, so don't think so. Intel wants to do joint projects w/us to consume
MIPS &mdash; they have so much money to spend
on this. "I've spent 4x more time with Intel management vs. this group in
the last 2 months" convincing them about what
to think about Java, NCS, etc.
</p>

<p>
Q: What are we doing to turn PR trends around?<br />
A: Talking about partners &mdash; PC manufacturers, solution providers; Why
are bankers and newspapers so afraid of us?
When almost anyone is asked who their major competitor is, they say Microsoft
now. Even Disney! Maybe we should
go out and start competing with Micky Mouse!? It's because the Internet is
changing their business model. It's not like
we're going to start a bank. On the arrogance rating, not sure you can be
successful in business without some of this
perception. SteveB adds: MS does so many things so well, when we don't, people
think there must be some reason &mdash;
they decide were arrogant; that we don't think we need to solve the problem.

</p>

<p>
Q: How should we [senior folks at MS] work together better? Are there any action
items from this meeting?<br />
A: We're not going to impose solutions, we want <u>you</u> to offer
your ideas. Champions for scenarios will help, and
spending more time with this group of people will help
</p>

<p>
Q: When I talk to a customer, and they ask by SQL and Exchange don't use the
same store, who do I turn to for an
answer?<br />
A: That's a problem, for sure [that the source of an answer is not obvious]
</p>

<p>
Q: What video formats for HDTV are we promoting?<br />
A: [Bill gives some quick discussion about various formats, and I think says
we're going to start with "480p" and
encourage people to move to "72Op". This is how we will bootstrap
HDTV.]
</p>

<p>
Q: Simplicity problem seems very deep &mdash; how do you decide between
plastering over the complicated stuff we have,
versus tossing stuff out?<br />
A: You can hide things, like the file system. There was a mail thread on this
recently. But, can we really do this? Best
case, NT 6 time-frame &mdash; have to start now!
</p>

<p>

Q: Are there other companies we should be working with?<br />
A: Compaq, for sure. They bought Tandem recently, really driving on servers. HP
increasingly. NEC. SteveB adds &mdash;
think of it as the norm, rather than the exception, that we partner with other
companies. Intel, Compaq, and TCI
someday if we lose enough money with them. SGI has refocused on NT, even seeding
graphics leadership to us &mdash;
graphics is very important to them.
</p>

<p>
Q: You said the stock price could be very volatile, what do you see happening in
the future?<br />
A: I don't like to talk about the stock price. We're very early in the software
business, still. 99% of the value to be
created is stiil in front of us. Near-term, NTW penetration, NTS/BackOffice
growth will drive profitability. Can we ramp
up NT 4 adoption now? That would hetp us with NT 5 adoption. PC sales are a key
variabole, as is NT popularity.
</p>

<p>
Q: What are we doing to match/exceed Notes?<br />

A: SQL+Exchange is the answer. We win on e-mail today. Access + SQL 7 should
help next year, SQL 7 includes a
client-side version. One question is whether Access is a simple enough
development tool. It will be the release after
"platinum" (of Exchange) before we can convert Notes apps.
</p>

<p>
&lt;&lt;&lt; The End &gt;&gt;&gt;
</p>

<p>
<b>From:</b> Ben Slivka<br />
<b>Sent:</b> Sunday, December 07, 1997 8:30 PM<br />

<b>To:</b> Bob Kruger (Exchange)<br />
<b>Subject:</b> FW: mmr 12/3/97 meeting notes
</p>

<p>
Maybe help richardm w/enterprise scenarios?
</p>

----Original Message----~<br />
<b>From:</b> Ben Slivka<br />

<b>Sent:</b> Thursday, December 04, 1997 12:48 PM<br />
<b>To:</b> Chris Williams (WPG); Julie Larson; Dawn Trudeau;
Kathleen Hebert (Schoenfelder); Richard McAniff; Kevin
Johnson (ECLl); Jonathan Murray; Eric Rudder; Duane Campbell; Brian MacDonald;
Jon Thomason; Bill
Baker; Chris Jones; J Allard; John Zagula; Megan Bliss; Robert Welland; Ralf
Harteneck; Will Poole; Doug
Bayer (Exchange): Brian Arbogast; Paul Gross; Tom Button; Grant George; Bill
Veghte; Jawad Khaki;
Steven Sinofsky; Andrew Kwatinetz; Ed Fries; Rick Waddell; Yusuf Mehdi; Blake
Irving; David Cole; Brad
Chase<br />
<b>Cc:</b> Middle Management Retreat; Paul Maritz; Jim Allchin
(Exchange); Brad Silverberg; Craig Mundie; Andrea
Tevlin; Kevin Purcell; Natalie Yount; Bob Herbold; Steve Ballmer<br />
<b>Subject:</b> mmr 12/3/97 meeting notes
</p>

<p>
Thank you all for spending 3 hours yesterday on "MS Version 3.0".
</p>

<p>
A big accomplishment yesterday was the start on the "MS 3.0 Product
Plan", i.e., how should MS methodically (and
quickly) redefine ourselves over the next few months to attack our key
challenges <u>and</u> meet the paulma 1/14/98 reorg
dare. briana/ericr/jallard are driving hard to publish a first draft of this
plan by EOB Monday.
</p>

<p>
Here are my notes on the high-level sketch (briana, please feel free to send a
more detailed version):
<ol>
<li><b>Define Mission: Goals &amp; non-Goals;</b><br
/>

owners = andrewk<br />
team = yusufm, chrisjo, bens (plus folks from steveb land) + davidcol<br
/>
deliverable = 10 key goals/non-goals + strawman mission (will deliver draft to
ericr Monday for eric's doc)
meeting = full-day offsite in the next two weeks</li>
<li><b>Customer segmentation/scenarios</b> (we picked the 4-5
obvious ones, didn`t argue too much)<br />
owners = blakei (home), chrisjo (small business), richardm (enterprise), pgross
(developers), jawadk (ISPs),
juiielar will coordinate across these customer segments<br />
team = owners will enlist appropriate other middles from product and sales
groups<br />
deliverable = "buzzword" for each scenario (like "jimmy's xmas
present"), one page description of segment, two
pages per scenario, limit to 6-10 soenarios/segment (for focus)<br />
meeting = TBD by owners &amp; their teams</li>

<li><b>Technical themes</b><br />
owner = jallard (editor)<br />
team = TBD (please volunteer, talk to j)<br />
deliverable = Technical audit &amp; 1-2 page description of all current
technology<br />
meeting = TBD by jallard + team</li>
<li><b>Timeline</b><br />
Have to complete this all in advance of 1/14/98 paulma all-hands meeting; ericr
will have proposal in his EOB
Monday draft.</li>
</ol>

</p>

<p>
<u>Additional Action Items:</u><br />
<b>Jmurray</b> mentioned that there are a lot of customer visits
coming up this month, he will send details to mmf alias.<br />
<b>Jmurray</b> will also help get more folks from steveb's group
connected to our MS 3.0 efforts.<br />
<b>Johnza</b> will forward the Microsoft Customer Taxonomy to mmr
alias.<br />

<b>EdF</b> will help get more IMG folks connected to our MS 3.0
efforts.
</p>

<p>
The "next steps" are all focused on driving forward on refining and
executing the MS 3.0 Plan.<br />
I think there is general agreement that we need to identify key customer
scenarios, and then organize the product group
around these customer scenarios
</p>

<p>
Individual breakout owners will send their notes to the mmr alias; I've included
my notes below on the general
discussions:
</p>

<p>
As a starting point, we discussed bill's presentation on Monday, and here were
the observations:

<ul>
<li>No clear Vision/Mission &mdash; no roadmap for the future; DNS +
Web Lifestyle are two near term, unconnected</li>
<li>Scenarios didn't seem applicable. some too vague, others too specific;
too technology-focused</li>
<li>No insight into how to manage MS differently &mdash; no process
for how to proceed forward</li>
<li>Didn't seem like bill prep'd much for the talk &mdash; just a
collection of existing slides?</li>
<li>What are 3 key things we have to execute on to be successful 5 years
from now?</li>

<li>DNS &mdash; what is it, really?</li>
<li>Integration &madsh; why is this good?</li>
<li>Oversimplified problems &mdash; especially how hard it is to
achieve simplicity</li>
<li>Scenario and Architecture owners <b>*must*</b> be in
product teams if they are to be successful. These people will be
ignored/ineffective if off on the side</li>

<li>Wasn't clear how '98 key objectives help us win against our
competitors</li>
</ul>
</p>

<p>
The first three items [I resorted these from the order they were supplied] are
the key missing things, and we believe the
MS 3.0 Product Plan effort above <u>will</u> address them. We're
driving on this to <u>help</u> paulma and billg redesign MS.
</p>

<p>
After this discussion, we broke of for 20 minutes into 7 different teams to
identify the "top problems facing MS". That
generated the following list, which is a mixture of strategic problems and
process problems:

<ol>
<li>Company/Product Visions &mdash; mission, metrics</li>
<li>Better technology sharing between product groups and between research
and the product group</li>
<li>What should paulma's job be?</li>
<li>Who owns platform architecture? Any way to have (public statements)
last longer than 3-6 months?</li>
<li>Customer taxonomy, market segmentation, and key scenarios</li>
<li>How to make decisions across org/product boundaries?</li>
<li>What is MS 3.0 planning process? Can we make it more formal? [This is
the one we really latched onto, per
above!]</li>

<li>Who are the owners for cross-group scenarios?</li>
<li>What groups should own which scenarios?</li>
<li>Get product groups &amp; steveb groups &amp; customers more
connected</li>
<li>How do we better anticipate change?</li>
<li>How do we get entire company focused and bought into MS
3.0?</li>
<li>How do we get IMG more involved? Software as a service will become
more important.</li>
<li>How do we get input from/communicate to MS executives? [By doing this
mmr thing..:-)]</li>

<li>How do we balance investment in existing business models (&amp;
products) with new business models?</li>
<li>How do we decide what <u>not</u> to invest in?</li>
<li>How do we balance (cross-product/brand) scenarios vs. existing
brands/products?</li>
<li>How do we scale org (from 11bil to 50bil)?</li>
<li>How do we grow, retain senior management?</li>
<li>How do we innovate give our legacy code bases/products?</li>

<li>How do we innovate in absence of external competition?</li>
</ol>
</p>

<p>
After building this list, we spent 20 minutes voting/arguing about how to
proceed (we're process losers, we all agreed).
Finally, we decided to stick with our original (random) 7 teams (meganb
suggested this from the outset, we should have
listened to her). Here were the team scribes and my very brief notes &mdash;
team owners will send out fuller notes:
</p>

<p>
Yusfum, web lifestyle/home<br />
goals: 1) you can do stuff you cou|dn't before, or hard things are easier<br
/>
2) save time, save money, enrich your life

</p>

<p>
briana, MS 3.0 Product Plan (see above)
</p>

<p>
pgross, enterprise customer scenarios/taxonomy
</p>

<p>
edf, Fear + Other scenarios<br />
Ed noted: "This is the worst group to build scenarios &mdash; go talk
to customers"<br />

1. My 8 year old can use my computer and I am not scared (that he will trash it,
delete files, find out my net worth,
etc.) - home scenario
</p>

<ol>
<li>The MIS manager (i.e., helpdesk technician) can use my computer and I
am not scared (small business
scenario)</li>
<li>The business suite of apps/templates that allow the SMORG to tum on
computer and get business planning, tax
planning, legal advice, etc.</li>
<li>The home suite of services that connects the home to essential
services such as mail, scheduling,
phone/messages, shopping, etc.</li>
<li>Install software and nothing breaks, i.e., other software, device
drivers, peripherals, etc.</li>
</ol>

<p>
&lt;&lt;&lt; the end &gt;&gt;&gt;

</p>

<p>
<b>From:</b> Ben Slivka<br />
<b>Sent:</b> Sunday, December 07, 1997 8:36 PM<br />
<b>To:</b> Bob Kruger (Exchange)<br />
<b>Subject:</b> FW: Reinvigorating the company -- update on mmr
work

</p>

<p>
-----Original Message-----<br />
<b>From: Ben Slivka</b><br />
<b>Sent:</b> Friday, December 05, 1997 1:42 PM<br />
<b>To:</b> Middle Management Retreat<br />
<b>Subject:</b> FW: Reinvigorating the company - update on mmr work

</p>

<p>
Fyi...
</p>

<p>
-----Original Message-----<br />
<b>From: Ben Slivka</b><br />
<b>Sent:</b> Friday, December 05, 1997 1:41 PM<br />
<b>To:</b> Bill Gates; Paul Maritz<br />

<b>Cc:</b> Eric Rudder; Jim Allchin (Exchange); Bob Muglia
(Exchange); Collins Hemingway; Nathan Myhrvold<br />
<b>Subject:</b> RE: Reinvigorating the company -- update on mmr
work
</p>

<p>
There are several groups (see "mmr 12/3/97 meeting notes" mail for
details) working in parallel on:
<ol>
<li>mission/vision/goals &mdash; do we need to modify/expand upon
"a pc on every desk and in every home"?</li>
<li>customer scenarios &mdash; we broke this out as home, small
business, enterprise, developer, ISP [not everyone agreed on
ISP as separate, but we didn't want to argue]</li>

<li>technologies &mdash; what are the key technology assets and the
key technology challenges</li>
</ol>
</p>

<p>
<u>Timeline</u>
<table border="0">
<tr><td>Next 7 days</td><td>Work on elaborating each of
the above areas, send out drafts for review to mmr atlas</td></tr>
<tr><td>12/12/97</td><td>Present drafts to mmr group
1:30-3:30pm, 12N/Camano; discussion</td></tr>

<tr><td>12/16/97</td><td>Present <u>revised
draft</u> to billg/paulma/et. al.; lots of
discussion/feedback</td></tr>
</table>
</p>

<p>
The goal of the mmr group is to help the executive staff get this stuff figured
out: this is not about whining, it's not about
running away from difficult problems, it's not about disintegration, it is not a
revolution. Rather, we're trying to focus on
customer problems and customer benefits, with the thought that this would be a
great guide toward how we reorganize
and reenerglze MS.
</p>

<p>
If there are any problems/issues/questions that you want to make sure we
address, please don't hesitate to write!<br />
Thanks, bens

</p>

<p>
-----Original Message-----<br />
<b>From: Bill Gates</b><br />
<b>Sent:</b> Friday, December 05, 1997 8:25 AM<br />
<b>To:</b> Eric Rudder<br />
<b>Cc:</b> Paul Maritz; Jim Ailchin (Exchange); Bob Muglia
(Exchange); Ben Slivka; Collins Hemingway; Nathan
Myhrvold<br />

<b>Subject:</b> Reinvigorating the company
</p>

<p>
I think there is actually a consensus that part of reinvigorating the company
involves creating a "vision" for
customers. We would take DNS, DNA (vision for developers) and Web life style and
lay out what we want to do
for people. If people really want to understand DNS they are welcome to meet
with Collins who spends most of
his time on it.
</p>

<p>
This would be embodied with a set of scenarios for various customer types.
</p>

<p>
We also need a technical vision. This would be embodied with a list of key
technology issues. For example what
we need to do with voice or schema or forms. This document would simply state
the goals - not the code bases
or anything like that.
</p>

<p>
Ideally these documents would be both exciting, and crisp. However they are a
lot of work. I am not sure how to
pull them together.
</p>

<p>
I have been thinking I need to do them myself but I would love it if that is not
the case. It appears Ben is having
some people do work that could be used for this which is great but I wonder how
we will bring all the pieces
together.
</p>

<p>
One plan is to wait for Ben's group to make progress on the scenario thing while
I work on the technology thing
and then try to get them to come together.
</p>

<p>
I will send you the progress I had made on the"technology" one. I will
also enlist Nathan to help me with this one.
</p>

<p>

<b>From:</b> Ben Slivka<br />
<b>Sent:</b> Sunday, December 07, 1907 10:19 PM<br />
<b>To:</b> Middle Management Retreat<br />
<b>Cc:</b> Natalie Yount; Paul Maritz<br />
<b>Subject:</b> mmr: draft agenda for 12/16, setting expectations

</p>

<p>
Here is the draft agenda for 12/16 (and 12/12) that I've been working through
w/ericr, clwill, kevinpur, and others.
Your comments are welcome (mmr is up to 65 people, so please use "R"
judiciously).
</p>

<p>
Clwill and I are meeting w/paulma tomorrow moming to get his input on this
agenda &mdash; I'll send out notes after we meet.
</p>

<p>
<b>Ground Rules/Assumptions for 12/16 meeting</b>
(billg/paulma/bherbold confirmed, steveb is oof, trying to get jeffr):
<ol>

<li>This meeting is an opportunity for middles to present and
<u>executive staff to listen</u>.<br />
Executives may ask for clarification on the presentation, but we're not asking
for any decisions to be made or any
opinions on our presentation to be instantly rendered. Our belief is that this
will take pressure off the executive staff
<u>and</u> also permit our input to be full considered. The
executive staff can schedule a follow-up interactive meeting if
they like.</li>
<li>Our presentations of mission/vision and customer scenarios are
<u>quick drafts.</u><br />
In particular, we'll have spent less than 2 weeks &mdash; part-time
&mdash; on the customer scenarios. No one in mmr would
claim that our results in this short period of time are definitive. And some of
you have expressed concern that we are
the best/right set of people to be attacking these customers. I say: <u>No
Whining!</u> If there are indeed key scenarios for
our customers that MS products do not address (very well) today, I think this
group of people has enough IQ and
customer empathy to find them! Bill's mail on Friday shows that he is very
interested in this stuff, so I think he'll at
least give us credit for trying:

<blockquote>
"I think there is actually a consensus that part of reinvigorating the
company involves creating a "vision" for
customers. We would take DNS, DNA (vision for developers) and Web life style and
lay out what we want to do
for people. If people really want to understand DNS they are welcome to meet
with Collins who spends most of
his time on it. <u>This would be embodied with a set of scenarios for
various customer types</u>. [emphasis mine]"
</blockquote></li>
<li>We should take a stab at filling out WPoole's <u>Venn diagram of
the DNS, DNA, and Web LifeStyle circles</u>.<br />
As bill indicates above, these are the customer areas he cares about, and these
are the ones that we also identified.
EricR and ChrisJo and others have proposed doing to versions of this diagram
&mdash; one showing where products fit into
the circles, and the other where technologies fit into these circles. EricR is
going to take a stab at those early this
week and send them out for review. Obviously these end up being reorg
recommendations if it turns out that we
organize the product group into DNS, DNA, and WL divisions. But, heck, we want
to influence the reorg so let's take
a stab at these! I ask each of you to put aside your personal interests here and
help us build these diagrams guided
primarily by customer benefit</li>
</ol>

<p>
<b>Draft Agenda</b> (2 hours total)

<table>
<tr><th>Time
Speaker</th><th>Topic</th></tr>
<tr><td>5 min</td><td>ericr: introduction/ground
rules</td></tr>
<tr><td>10 min</td><td>bens: overview of MMR &mdash;
why are we doing this</td></tr>
<tr><td>20 min</td><td>yusufm(?): mission/vision
draft</td></tr>
<tr><td>5 min</td><td>julielar: introduction to customer
segments/scenarios</td></tr>

<tr><td>20 min</td><td>richardm(?): DNS scenarios
(enterprise)</td></tr>
<tr><td>20 min</t

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