Wednesday, October 25, 2006

Microsoft FY07Q1 Results

FY07Q1 Pre-results: Quarterly results time! Stories leading into the quarterly financial results:

What are you interested in hearing more about or having the analysts ask Microsoft to get more direct answers? My shortlist:

  • Dates + Enthusiasm: Vista. Office. Dates. Please Lord Almighty finally tell the world when the software will hit the street.
  • Partners?: McAfee and Symantec are shaking the EC tree. Other partners might wonder when we fix our gaze on their market. Justification on our part is totally detached from the halls of justice. Where are the risks? A few bits from Mr. Ballmer here: 10-25-2006 Microsoft's top exec talks about Vista.
  • Live: how the heck is this coming together? Is it an emerging success or still a swirling particle cloud? How is it adding to the bottom line?
  • Xbox: what are the projected shipments? SeekingAlpha reports that Microsoft To Miss XBox 360 Production Targets By As Much As 25%. I imagine we should hear dates and projected shipments on the HD-DVD unit, too.
  • Zune: how are the projections here? What's the future Zune feature-set and ecosystem looking like?
  • Billions and Billions of Dollars: what's the plan for the warchest? More buy backs?

Post-results: nice?

Coverage at this point:

  • MSFTextrememakeover Q1 Earnings - "Phew! No huge surprises. The stronger EPS result mentioned above, seems to have been due to shifting some planned marketing expenses to Q2 and beyond."
  • Microsoft Monitor Microsoft Fiscal 2007, Q1 Results - always a great summary from Mr. Wilcox. On MBD: "My expectation is that most businesses planning to get Office 2007 made that decision when renewing licensing contracts earlier this year. I'm quite bearish on deployments of the new productivity suite."
  • Microsoft profit rises, online group posts loss from Mr. Todd Bishop. Ooo, that ends with a 10-Q quote that's a red flag being waved in-front of my lean-and-mean-bull-ringed nose: "OSB operating income decreased for the three months ended September 30, 2006 [...] Headcount-related costs increased 43%, reflecting both an increase in salaries and benefits for existing headcount and a 40% increase in headcount." Yes, please, throwing more bodies and more money at the catch-up effort is suuuure to succeed.
  • Xbox helps Microsoft profits surge The Daily Telegraph - wha? Xbox might help revenue to surge, but it certainly isn't helping our profits to surge, unless we're rolling into that some heavy profits from periphery attachment. On that note:
  • Gamerscore Blog Quarterly Financial Report - John Porcaro goes into greater financial depth around the Xbox 360.
  • Microsoft Earnings Rise, Beating Views Financial News - Yahoo! Finance - has probably the most representative quote of the Q1 review: '"It's not a bad quarter, not a bad outlook,"' by Alan Davis with D.A. Davidson.

Not bad. Well, some of it is super-fantastic again thanks to SQL Server, Windows Server, and VS (good job on all that SP1 work, too!). Nothing really stuck in my mind from the conference call. Good numbers, a little lumpy, sounds like we're being pretty conservative regarding if things are going to go well or not for the 360, Vista, and Office. And of course, no firm dates for Vista or Office but at least we affirmed corporate availability for November and consumer availability come January. 2007.

Sorry Building 9 countdown clock! You've got to reach zero and then we'll let 'er rip.

Updated: added post results material.

Friday, October 20, 2006


Soon: Thursday October the 26th we announce our quarterly financials.

  • Apple: ba-da-bing!
  • Google: ba-da-boom!
  • Microsoft? ba... da... ????.

I can only hope that both Windows Vista and Office 2007 are in such an obvious state of RTM doneness come Thursday that we officially announce the release dates as part of showing some level of confidence, versus letting the releases slip out the door once we've convinced ourselves that no further fixes should be made (it's okay... fiddle-dee-dee, I'll think about that issue come another service-pack).

Now: I dropped by a colleague's office while he was reading through the new internal InsideMS blog put up by our HR-leadership. Off-hand comments I remember us making:

  • Whoa, this looks like a readers-digest version of Mini-Microsoft.
  • It's amazingly surprising how many people are posting anonymously.
  • That's a lot of comments for the first couple of days, even excluding the duplicate comments.
  • What? Who thinks stack ranking is gone? Eeeenk!
  • Looks like a hit.

And rather sheepishly at the end, looking at the clock on the screen:

  • Uh, how much time did we just waste reading all of these comments?

Mr. Barr over at Proudly Serving provides his point of view of this blog and its conversation vs. the internal blog and the conversation that will happen there. A recent comment on the InsideMS internal blog:

Only one topic post up there, but a huge amount of comments. And I am STUNNED at the candor in the comments. Nobody is pulling any punches. I don't see double posts from here, but I do see similar themes. It's sort of like Mini is shaking a champagne bottle and aiming at the internal blog before popping the cork. Funny stuff.

Re-org Me: a recent comment regarding what's going on in SteveSi's and JonDe's org:

You get what you wished for. A flat and leaner organization in many places. GMs, PUMs and [Directors] all got reassigned (read "demoted") to take on "real world" roles. They were kicked but not fired. Most of the managers stepped down to be a lead or IC. Dev leads turn into tech leads or ICs. [...] You never expect that St***Si will be so determined and insensitive, right?

(Leaving out the bit about me.) Go Steven! You folks in those orgs are undergoing a good bit of change all at once. And dealing with the rumor of a grand RIF coming post Vista (I don't believe it). You know, most PUMs found a position aligned with an appropriate triad. I believe it will all be worked out and everyone will find that they have greater responsibility and impact than before. And a chance to shine. Or not. And I've determined that my favorite phrase-nugget for the month of October is: "get the executives out of the engine room." Yes.

And, to follow-up on Mary Jo Foley's observation: heck, no, I don't want a hierarchy free Microsoft. That would be chaos, followed by Lord of the Flies-esque passive-aggressive tribal warfare. But I and others do want an efficient structure that prevents fiefdoms and allows aligned autonomy with obvious accountability.

And as for Googley envy: I don't think hi-tech toilets will be on myMicrosoft's radar anytime soon. Just look how long it's taking to get friggin' coffee makers put in.

Anonymity: other anonymous goings on:

  • MSFTExtremeMakeover ponders news leading up to the Microsoft quarterly financial report.
  • Collision Domain provides some post-Company Meeting thoughts.
  • Apple gets their own Masked Blogger and the world takes quick notice. Well, the blogitty-blog-blog echo-chamber world takes quick notice. Everyone has their own agenda for blogging, doubly so for anonymous bloggers. Unlike some bloggers out there, I think there's value in anonymity because the message becomes what's important, not the messenger. It's an equalizer. My only advice is to do your damndest to keep the messenger out of the picture, because things here stumble the most when it's about me as Mini vs. the conversation.
  • Both the Unofficial Intel Blog and Intel Perspective blog clarify their position on comments.
  • Doh Symantec has a few posts up looking into Symantec, including the latest on performance reviews. Hmm, Symantec managers, in order to qualify for a great review, need to take a certain amount of training every year. Hmm.

Oh, and mentioning Symantec above makes me think of McAfee and this whole public tantrum breakdown over Vista.

McAfee: listen, you're turning into that wonderfully cool person I dated that went all creepy on me after I got my act together. It's like you liked me more when I had issues and you defined yourself by supporting me when I was troubled and untrustworthy. Now you're all clingy and suffocating me and spreading nasty things around about me. I've reformed myself and moved on. You need to, too.

Or I'm getting a restraining order. As defined by an ever narrowing-API documentation pipe. And that's going to be lose-lose for everyone. Adapt and evolve.

Man, next thing I know you'll probably be loading worms on iPods or something just to get back at me...

Monday, October 09, 2006

Random October Bits

I think things are going to enter a quiet period here for the rest of the year and into next year. For now, here's a random October collection of interesting comments and newsbits that clears a whole bunch of blog-this flags in my Outlook.

Re-Titled: it was amusing to me that the Wired "Rebuilding Microsoft" article got re-titled to "Ozzie to Face New Challenges at Microsoft" when it showed up in this past Wednesday's daily news summary. Well, I'd rather have the link vs. having it denied because of the article title.

Limited: As we all try to figure out what our reviews mean and how to manage the reviews and compensation, one commenter brought up a rule in their group that anyone over 30 months at level were slapped with Limited on their review:

I'm the "limited fiasco" AC.

Apparently some groups either didn't get the message or chose to ignore it. I have an email from HR indicating that EVERYONE with more than 30 months at level (regardless of level) MUST get a Limited eval. This is why they added "limited scenario 1" and "limited scenario 2".

Your group may have chosen to ignore the memo, but I know that many divisions didn't.

And I know that many senior 64s who got 0 stock award are sitting looking at Google and Amazon's help wanted ads.

Most folks didn't experience this and slapped FUD on that. If a group did decide to do this, I suggest forwarding that HR email to LisaB and tell her this is wrong and some heads need to be knocked around for creating a passive-aggressive punishment system. If you want people gone, RIF them already. I've always told people that Microsoft is pretty happy with you if you reach L63. If you look at the CSPs as well, they give you an idea about what kind of promotion velocity you should be pushing for and it pretty much goes away as you hit the mid-60-levels. The bad thing about this months-at-level idea, hopefully a FUD-dy-duddy idea, is that if people realize they are going to get punished for not getting promoted they are going to do what it takes to get promoted vs. what's the right thing to do for their business.

More Than Human: Brier Dudley has an interesting HR-infused blog post that covers both Google and Microsoft: Human Resources Issues at Microsoft, Google. It points to the double LisaB article in Monday's Seattle Times by Benjamin Romano:

And while nothing but praises should be shouted out for getting rid of the performance curve and the trended review scores, we still have a dysfunctional stack-rank review system that competes employees against their peers. Small steps.

http://minimsft/: on the upcoming internal employee discussion blog: I want Microsofties to participate on it and not crosspost from the internal blog onto here. When I recognize that happening, or when people see one that got through and point it out, I just will drop the comment into the bit-bucket. On the other hand, you're welcome to crosspost from here and onto the internal blog to continue a discussion on a topic that you know will only include internal Microsofties.

Basic content rule: what starts internal must stay internal. If you have a comment about the discussion area from a non-content point of view then yes, please, write about it.

As for concerns about an HR sponsored discussion area being completely career-safe to engage in: well, you remember that blue Corporate Confidential book, right? HR does not exist to make your life easier. And if that Orange Scarfed Dementor Brigade starts jumping on people, especially anonymous contributors, then we'll all know it's time to throw in the company-provided towell.

Transfers: The new internal transfer program... well, the first response to the internal transfer post was "Hey, what new internal transfer program?" given that it was given a pretty soft-announcement by showing up in Micronews. In general, commenters believe it's a step in the right direction, but it would be much better to just interview for the position and not ever get your manager in involved. While many left stories of revenge when they did look to interview, one story of success came in:

I asked, more appropriately informed, my manager that I am planning to interview and both the times I got promotion. I am now a level above than my peers. I got promotion in two consecutive years whereas normally I would have got one in two years.

I strongly believe that's normally the case. Because that's the only way to keep your super-stars within the group. But minimsft is not a forum for such people. It is forum for people who felt unjustice.

(Oooch.) A deft hand at handling your career with your current boss is always a good idea. I like BizDog's summary of the change best:

In my opinion this is goodness all around and here's why. Obvious is the benefit to people (ICs and managers alike) who want to change roles - now they can do an informational and have a shot at actually getting to move roles in a reasonable timeframe so they can continue to advance their career while doing great things for the company. Net is lower recruiting costs and higher employee retention - these are good things. But this is also good for managers. It allows you to actually hire strategically for your team AND for people's career advancement which let's face it was difficult to impossible to do before. This also allows a manager to build a truly great team when combined with the new review model. But best of all - ta-dah, yes it shines a glaring spotlight on really bad managers. Why? because they can't hide turnover any more - yep no boat anchoring people until the manager moves on so no one sees what a nightmare they were to work for. Beautiful and bravo. It ups the game on manager accountability and that is something we very much need.

I think we have the potential before us for some really great managers - and leaders - to start thriving and growing within Microsoft.

It's the stock price, dummy: MSFTextrememakeover discusses Microsoft's stock recovery.

Turf-06: As for local blog drama, the spirit of some of the commenters has a new twisty-mix post Company Meeting. I don't mind someone coming along with an opposing or dissenting view. Not at all. That's dialogue. What's bad is that the New Dissention seems focused on boxing previous commenters into a "loser!" box vs. respecting what they've said. I'd like to hear what you have to say without you whipping out the straw man argument or engaging in the tyranny of the "or."

On the change in the mix, Anon Partner adds:

You have to wonder why after 1-1.5 years of MiniMSFT, why there is public chastisizing of Mini going on (incl at the eco meeting by LisaB very dramatically).

The turning point came when people started venting/sharing their review f/b, numbers in relation to partner compensation. That hit low and I think there is a sense of embarrassment in the upper ranks about this. It highlighted the culture at MS in a way that they didn't expect or want. This is why there is a renewed focus on flushing out the readers/posters etc.

This is communism at its worst.

I understand LisaB wants to rebuild the trust between leadership and the rank-and-file. I think an upfront discussion of the SPSA program and rank-and-file compensation, if brought up by Microsofties, should be on the top of the list. Chastise me, please, should I stumble into falsehoods. But not for shinning a light and remarking, "whoa, that stinks!"

On Photosynth:

The Photosynth tech demo you saw: WAS created by a small team, TOOK less than 4 months. IS going to be shipping in less than a month. HAS something we lack in a lot of other products: COOLNESS and WE have a lot of other cool stuff brewing...

Wake up mini-blah the mini microsoft that you talk about is growing from within the company.

and YES I do work for the team that is doing Photosynth.

The Photosynth demo rocked my world. I wish you guys all the success in the world because if you rock everyone's world you can be instrumental in showing how to get it done and shipped.

Jürgen Gallmann: this Microsoft resignation has been pretty quiet - what does it mean? Microsoft's top German Juergen Gallmann resigns.

The Field, revisited: a comment on MCS:

Having lived in the field for 6 years (first MCS, now sales), I can say that, from my experience, the more negative comments on this thread are the more accurate.

MCS is the biggest travesty. The comment above from the person who said that "MCS is about selling software and not generating revenue" is just completely out of touch with MCS management. Eespecially the new regime. MCS has strict marching orders under the current regime to be profitable, focus on growing the business (again - UGH!), and stick to big ($500k+) deals. They've gone so far that <2 week deals now require high level sign-off.

I feel like there's a whole lot more there to discuss, but I'm not sure how best to go forward.

You Are the Universe: and to close, always this gentle reminder for those of you not super happy with how Microsoft is going for you and able to consider other employers:

Leaving MS was a difficult decision and if you are risk averse, you will not leave. But if your résumé looks good and you are a solid performer, you should have no problem finding a job, so the risk is really not all that high. Of course, if you have an MS-sponsored work visa, then you don't have much flexibility. For those that do have flexibility, give it a shot: send out your résumé. See what offers you get. Nothing interesting? Stay where you are. But at least know what you're options are. What have you got to lose?

Indeed! At a lull in your current cycle? Freshen up that resume and shop it around. And if you don't leave, maybe you'll at least find yourself refreshed and recommitted to Microsoft and your career.

Sunday, October 01, 2006

Microsoft Internal Transfers Just Got a Whole Lot Easier

This past week, Microsoft leadership acknowledged a persistent request from its employees: please - please! - make internal transfers easier. Microsoft acted, and now moving around inside of Microsoft is a bit looser and more in favor of the employee. The new policy, to me, comes with a series of curious contingencies, but on the whole, it's a great move and a great acknowledgement to every Microsoftie who has honestly and directly communicated with leadership that our ability to manage our career by efficiently moving within the company had become exceptionally encumbered. It also addresses concerns people have noted here about getting permission to interview and suffering demoralizing lock-in when their manager deigns them too essential to leave (at least the VP now has to step up and go on record for the lock-in - may they feel the cool breeze of future accountability on the back of their neck with every consideration).

When this was announced, I was at first surprised at how close to the 2006 Company Meeting this change was. Why didn't the HR leadership announce it then? It was on my wish-list. Well, in retrospect, I guess it might have been uncomfortable to hear cheering from the audience regarding the change to easily leave the current group you're sitting with ("Yah! I can get out of my stinkin' group! Oops, I mean, didn't they just mention our team name? Yah, team-name!").

I think for both Microsoft and you to succeed, strategic movement through-out the company, according to your passions and interest, is the best career-management strategy. The longer you continue doing the same-damn-thing the more likely it is you're going to peak and max-out in your career and start going through career atrophy. Want to have full-spectrum experiences? Move from successful cycle to successful cycle from group to group.

The first step in all of this is a successful informational. What does that consist of? A few ideas from me:

  • A super career-site posting that easily resonates with the best-fit candidates, or an efficient campus job peer network to find them.
  • A well prepared potential internal-hire that requests an informational and comes ready to sell themselves and learn more about the position and the team.
  • A well prepared hiring manager who can deftly identify candidates who most likely will succeed in the group.

A lot of people probably go first to the internal career site or subscribe to the internal job aliases. That's alright, but how do you ensure that you find the best fitting job? Sometimes it really relies on how well the job description is written. A much better long-term strategy is to never eat alone at work and to establish strong Microsoft connections now so that you can create your dream job position in the future.

I know we have an internal resume service but I've never used it. Does it work well? It seems at this point it would be ideal to have internal recruiters who see internally the bastion of employees interested in broadening their career by working in a new team and letting those internal recruiters aggressively go to it. In fact, I'd say that the reward for an internal hire should be twice that of an external hire. In this case, there's a lot less overhead for the hiring and it represents efficient rebalancing within the company. I know, I know, you start having people game the system and jumping from group to group. I guess the gaggle of contingencies in the new policy I was griping about above address that so that we don't end up with Enron career games.

As for the informational, both sides have to be prepared. When I was looking for a new position, I had great informationals that ended up taking up an entire afternoon and I had at least one exceptionally poor informational. I put the blame of the poor informational squarely at my own feet because I was unprepared and only mildly interested and knowledgeable about the group. I sucked. And I would have only had myself to blame if that had been my dream job or super career opportunity.

As part of getting ready to do requests for informationals, do you prepare a resume? It can't hurt and it does serve as an introduction and a way for the hiring manager to ask more directed questions. You should update your resume once a year anyway, especially after your review or after shipping. That way, your resume is always fresh and ready to shop around should you want to test the vibrant external Microsoft waters. In Redmond there are some exceptionally knowledgeable ex-Microsofties over at JobSyntax to help you spruce your resume up or even prep.

Then you start asking yourself questions like: in thirty minutes or so, how do I sell myself and learn if this the position and group I might be interested in? How do I close the loop on the informational so that there's a clear direction going forward at the end?

Do your homework. Know the group. If it's a product group, for instance, use their product and describe your take on it and a vision you see for it going forward. What's your passion? How does it align with this group? Show that you're looking forward and engaged and not just desperately looking to abandon a burning, sinking ship and/or a cycle of bad reviews. Talk up the positive aspects of your current group given that it shows the wisdom and IQ you'd be bringing with you. Talk about your long-term plans: do you want to be a Development Manager or such? A Distinguished Engineer? Sorry, but you've got to sell yourself and your future. And maybe somehow figure out how the group's poll numbers are and what recent attrition has been like so that you can have some assurance that it's a healthy group.

At the end of the informational, if you're interested, get a commitment regarding the next steps and show that you're open for a one-off interview (especially if you're crossing disciplines) to ensure an interview loop would be an effective next step.

If you're a hiring manager... well... sorry, I got mentally distracted thinking about the whole Mini-Microsoft thing and wanting to scale-down through cuts and attrition and how hiring just seems to exceptionally wrong at this point. Anyway, I guess it's better to hire from within and rebalance vs. bringing more new people in. Okay, so if you're a hiring manager, your work is cut out for you. Now's the best time, though, to look for internal candidates: the reviews are over and major product groups and getting ready to ship. Everything is in flux and now we have this sweet new internal transfer policy.

You've got to pound the streets. Or at least the websites and conference rooms. How does a job get filled if no-one knows it exists, let alone if the ideal candidate doesn't know it exists? Are you just relying on the internal career website? That seems pretty limiting. Again, you've got to create opportunity to hire people by engaging in presence and connections within Microsoft.

So: transferring within Microsoft. What strategies work well for people out there?