Dan’l Lewin, Corporate Vice President, Strategic and Emerging Business, Microsoft Corporation
At the TED 2010 conference, the Kauffman Foundation will host the World of Entrepreneurs tent.
Ewing Marion Kauffman founded the pharmaceutical company, Marion Labs, and later the Kauffman Foundation. Known for its support of entrepreneurship, the foundation addresses the roots of issues to fundamentally change outcomes in people’s lives. Kauffman wanted to help young people, especially those from disadvantaged backgrounds, get a quality education that would enable them to reach their full potential. He saw enterprise and innovation as the great levers for change.
Microsoft and the Kauffman Foundation share the belief that entrepreneurship and innovation are the great change multipliers of our time, and both organizations have many dramatic and compelling examples of these forces at work in driving positive change. In keeping with the spirit of TED, “Ideas Worth Spreading,” we embarked on a project with the foundation to bring these stories to life; stories of how humans inspire, educate and preserve their culture and past. We wanted to marry the latest technology in digital story telling with the life changing work of our two organizations.
Building on the Microsoft Local Impact Map, an online application we developed to show how Microsoft, working with local partners, is helping people and communities in over 100 countries, we added stories from the work of the Kauffman Foundation. To bring the stories to a human scale, we moved the application to Microsoft Surface. Surface is a new computer that responds to natural hand gestures and real-world objects, creating unique new ways for people to collaboratively interact with digital content and to communicate. Surface brings the Local Impact Map to life, enabling you to navigate with your hands, finding, and exploring stories through text, video and pictures from around the world.
Visit the World of Entrepreneurs Tent at TED 2010 and experience the inspiring stories of the Kauffman Foundation through Microsoft Surface, a great vehicle for “Ideas Worth Spreading.”
For the TED 2010 conference, Microsoft and the Kauffman Foundation have worked together to bring the foundation’s success stories to the Microsoft Local Impact Map on Surface. It enables visitors to the TED 2010 conference to use their fingers, to travel around the world, seeing the local impact of technology, entrepreneurship and innovation.
Today, more than ever, helping people to bring their ideas to life, can help communities, and result in positive and sustainable social change. Events such as TED 2010 and the leadership shown by the Kauffman Foundation is helping to raise awareness of the importance and value of supporting entrepreneurship for everyone.
Last week I sat down with Deborah Gage of the San Francisco Chronicle. We talked about how I came to work at Microsoft and what my mission here is, as well as how Microsoft works with software startup companies, how we acquire and integrate them into our businesses.
You can read the entire article, Vice president nurtures Microsoft's relations, at SF Gate.
Thanks, Deborah, for an enjoyable conversation.
Dan’l
Don Dodge on my team adds his spin on the article on his blog. After John Shinal and I talked in late November, we followed up with another short talk about “lessons learned” and advice for startups. This is short but contains three ideas I think are important for startups. I have run startups and I’ve worked with many of them here at Microsoft. John Shinal, Vator.tv : Hi. We're here with Dan'l, a group vice president of Microsoft, and he's going to tell the entrepreneurs out there what are three pieces of advice you might have for startup execs, or maybe three lessons you've learned in your entrepreneurial experience. Dan’l Lewin: I have a strong belief in selling and channels. Most companies fail for lack of distribution and sales, and that's a fundamental element. So, I think companies and entrepreneurs should be thinking about their underlying platform assets, and who they partner with, because affiliation with large going concerns to help in the channel is always important. So, that's a fundamental. You also can't—on a second level—get your products and services to market without money. So, I would encourage people to take more money than they think they need, because usually that's the case, you'll need it. So, the negotiation there is just a matter of how much you give versus how much you get. The third element I would comment on is when you take your money, take it from people that you feel comfortable with, and that you believe that over time you could be in the trenches with, because things always get tough before they become good or great. So, given that you've got a good opportunity and you've got a choice, do the reference checks on the financiers as much as they do on you, and get a feel for how they'll behave when the going gets tough. So, that's what I would say in terms of three simple things. There's always the inevitable for the entrepreneur of knowing when to let go. There are a small number of people in the world like Bill Gates or others that have built big businesses, who know how to transition and grow and scale and create the kinds of jobs and wealth that all entrepreneurs aspire to. But there are also times when you've got to let go. Depending upon your skill set, if you're a technologist and you know you need channel or sales help, then be comfortable with that transition. Shinal: Okay, Dan'l, thanks a lot. Lewin: Glad to. Late last year, I spoke with Andy Plesser, founder and CEO of Beet.tv, about Microsoft’s IPTV efforts and how they related to startups in particular. Andy and I had a follow up talk looking into the process of partnering with Microsoft, and our engagements outside the United States. Here is the full transcript of our talk. The video can be seen here. Dan’l Lewin: The way we look at it, we have a core group that's a set of corporate resources that I have responsibility for, and then that kind of syndicates or federates out into market areas where classical, if you will, Silcon-Valley-centric, or Silicon-Valley-style entrepreneurism and venture capital plays. So, clearly, in the US, it's not just the Valley, it's Austin, Texas; it's Boston; it's Seattle; it's everywhere else where we have these skills and typically major universities, et cetera. Around the world, there are 15 countries where we're doing this work, probably five or six that are very, very capable and we're tightly integrated. So there's great things going on in Israel, particularly in this area. There's incredibly interesting things going on in the UK. We've actually engaged aggressively in France. We've purchased two companies in France in the last six months, which is really interesting, one called Screen Tonic, for example. India and China, again, big market opportunities, tremendous entrepreneurial zeal. So that's a system that we've got in place and, again, we're a global company, and we see the activity everywhere, and we try and enable that wherever possible. In terms of our global outreach and working with entrepreneurs and startups around the world, we have a Web site, www.MicrosoftStartupZone.com, and we have a program associated with that where we're—what we call "accelerating" the top 100 companies that we're able to see around the world doing interesting things in and around our ecosystem. Many of them are working in online video and related spaces, but that's really the resource place, the landing page where a startup can go. And from it, you know, discern the best way to work with and engage with Microsoft. Andy Plesser: So how does a company go about being a part of that? Lewin: Well, the first thing is they engage. They step up and let us know what they're up to within some context. And then we have a selection process. They get nominated by one of the team managers, a portfolio manager, who's looking at a particular area. And then from that, we'll provide a set of online services and related cost offsets and things. We're not direct investors, but we actually do a significant amount of people, time, and energy investment in helping these companies. Typically, we're looking for companies that have some—what we would call a "win win win," right? They're clearly focused on customers that matter to us, and they're using some of our highlighted technologies where we can help them as we launch our products and services around the world. It's very hard to see what an entrepreneur sees, right? An entrepreneur suspends disbelief and has a vision of what's possible. Occasionally that resonates with me personally. What we—you know, you've given them all the encouragement you can. As a company and as a group that I oversee, we spend a lot of time guiding entrepreneurs through the maze, if you will, which is a large company like Microsoft. And we can be really clear very quickly about whether or not we can be helpful, and give them context on if we can, how, or if we can't, why. And that usually provides them with some insight into what a company of our size and scale with our focus and commitment on this huge market opportunity of online video. So we have points of view but, again, the empowering thing that we do, I think, is to give people a context on where we see things. So it's their idea that we put in context of what we know. It's not us, you know, advising them to go do this and you'll be successful. But as you said, there are so many different opportunities. There are entrepreneurs focused in so many different areas that it's exciting for us to see that and to figure out where we can help. In late November, I spoke to John Shinal at Vator.tv about the Microsoft Startup Accelerator Program and other ways that the Emerging Business Team can help a startup partner with Microsoft. The full transcript is below, or you can watch the video right here. John Shinal, Vator.tv : Hi. We're here in Mountain View, California with Dan'l Lewin, the Corporate Vice President for Microsoft and their emerging business initiatives. Dan'l, welcome. Dan’l Lewin: Glad to be here. Shinal: And you guys have rolled out what you call the Accelerator Program about how startups all over the world, really, can operate with Microsoft and do business with Microsoft. Tell our startup entrepreneurs, if they want to do business with Microsoft, how do they go about doing it? Lewin: Sure. What you do is—the first location is on the Web, and it's MicrosoftStartupZone.com, one word—MicrosoftStartupZone.com. It gives a perspective on the kinds of things and the kinds of approaches you should take that will reach out to Microsoft so that we can help put in context your areas of interest and where we can be helpful. And it's organized around portfolios. And the portfolios are based upon the patterns of entrepreneurial investment and venture-capital-style investment. Shinal: Now, you—Microsoft ordinarily doesn't invest directly. Which—although you vet deals like a venture capital firm would. So talk about how—what happens when you choose to work with someone or choose not to? When the decision is made, what happens then as opposed to a direct investment? Lewin: Sure. What we end up doing is taking a look at areas of interest where the entrepreneurs are thinking about new market opportunities. We look for alignment in areas of interest around our underlying platform technologies, and we look for areas where we can be helpful in helping the company both align with our technologies, but also, and more importantly, create business value for our end customers. So, basically, the way you'd think about it is we invest very heavily in resources, in guidance, scalability work, marketing help, and sales and channel help where we can. And there are other times when we can be strong referrals into the venture capital community where companies are doing a second-level or third-level financing and they're aligned with us in some particular way. We can also help with introductions to the venture capital community. Shinal: Lastly, you don't work with everybody, obviously. So do you make a decision and say, "Yes, we will work with you. This is what we've got going product-roadmap-wise." Or, "Sorry, we can't work with you; you're on your own." Lewin: Yeah. The triage is pretty simple. You know, can we be helpful? If yes, how? And if not, why? And so the how we help is tied to areas of interest where we have initiative, either technical or market-based initiative. Our experience in the past has been that there are on the order of 200 or 300 companies a year where we can actually do meaningful work and help them, then they would be the ones saying that we helped them; it wouldn't be us tooting the horn. It would be then saying, "Yeah, these guys were really helpful." From that, there are 100 companies or so that on an annual basis we launch into our Accelerator Program, which is sort of a highlight of the top 100 companies around the world, typically from 15 or so different markets, the US being sort of the leading indicator in Silicon Valley, but clearly we're talking about Tel Aviv and we're talking about Bangalore, India, China, UK, France, etc., where there are significant entrepreneurial centers. So with that, we provide strong marketing air cover and significant value in helping the companies grow their businesses. And that's the key thing, the [Microsoft Startup] Accelerator Program. It's true. There are lots more companies out there than we could help. And through access to the Startup Zone, you can take a look at the areas where we have interest. And it's typically where we've been helping companies in the past. Those are the clusters in the areas. We'll be clear when we can't help you, and in some cases, you know, we'll pay attention over time if you're doing something that we don't see it today, but we should be paying attention because it looks interesting, but we don't have a way that we can help. So we'll pay attention and monitor those as well. Shinal: So we're back with Dan'l Lewin in Mountain View, California. And Dan'l, if you could give me one or two examples of some startup partners, either through the Accelerator Program or not, that Microsoft has partnered with, and how you're helping them. I think you mentioned maybe Jajah or Newsgator or someone like that. Lewin: Yeah, Jajah is a newer company doing some interesting things in and around VOIP and combining calls from local handset software. And they built, again, their platform technology as well as their client side doing a lot of work with Microsoft and our Smart Phone—excuse me—mobile platform asset. Sequoia-backed company, Mike Moritz is on the board. It's a terrific company growing leaps and bounds in a hot area at the moment. And we've just begun the engagement with them in the last couple of months. So as their success unfolds beyond the normal here's where we are with our product roadmaps and here's how we can help you with the immediate technologies. As their plans unfold and their business starts to scale, we'll be there and understand their need and bring value to the table there to help create business success for them on the other side. Shinal: Okay, Dan'l. Thanks. Lewin: Sure. Great. This November I gave a keynote address at the NewTeeVee conference in San Francisco. Later I chatted with Andy Plesser, founder and CEO of Beet.tv, about Microsoft’s IPTV efforts and opportunities for entrepreneurs. Some highlights from my talk with Andy: The biggest area where we've placed a big bet, and we've been at it for a while, is in our IPTV area, our Media Room technology, and we've been partnering with over 20 major service providers around the world. AT&T being the U.S. primary partner, and the AT&T Uverse service that's out there. It's a platform that is encouraging partnership and third-party content creation, so switch network that's very high performance, allowing for multiple picture-in-picture, instant channel changing, all kinds of interesting capabilities. So, that to us is one of the most interesting areas. Clearly, online Internet-based video distribution through various mechanisms is going to be important, is important. The business models are taking shape. Obviously advertising driven is one, but there will be subscription models, there will be pay-per-view style models, one-off purchases as well. We've delivered some interesting tools in this area, our Silverlight technology and Silverlight streaming service, which lets people host for free 4 gigabytes and have 100,000 downloads a month at no charge. Our Windows 2008 Server coming out early next calendar year includes the media streaming capability and media server capability at no charge, integrated into the Windows Server platform, which runs at scale. I could keep going. We have just a plethora of interesting underlying platform assets and partner opportunity. I think it's one of the most exciting times ever. I think we have the foundation technologies and the underlying platforms that have matured, and in our case, in Microsoft's case, we're bringing a lot of those underlying platforms and tools to market now. I don't see it as a bubble in any particular way. Personally, there's always excess investment, and there's always failure, but I think that the level of opportunity and the level of outcome, if you will, of the buyers, the acquirers, which is typically where startups end up−a few of them go public but most of them are acquired, the successful ones−I think it's going to be a great opportunity for the entrepreneurs. More on our IPTV Business: Business Week Nov. 6, 2007, by Peter Burrows: Microsoft IPTV: At Long Last, Progress NewTeeVee blog of my talk, Nov. 14, 2007 Microsoft TV home On Wednesday, November 7th, The Tech Museum Awards honored the use of technology to improve the quality of life for people around the globe. The gala, attended by over 1500 global technology leaders, philanthropists and guests, honored Gordon Moore as well as 25 Laureates in the categories of environment, economic development, education, equality and health. Microsoft sponsored the Education Award for the 4th year. This year’s recipient was TakingITGlobal, technology that provides young people worldwide with an online platform for social change. Other award sponsors included Applied Materials, Accenture, Intel, SanDisk, and the Swanson Foundation. Sponsorship of the Tech Museum Education Award is an important part of our citizenship effort in Silicon Valley and around the globe. It is part of our continuing investment to help people and businesses throughout the world realize their full potential. We are excited as a company and as a team to be able to support this great program. It is personally one of the most satisfying parts of my job here in Silicon Valley. Below are links to a few of the stories about the event. Dean Takahashi’s “Tech Talk” blog for the San Jose Mercury News – Laureate Award Winners Dean Takahashi’s “Tech Talk” blog for the San Jose Mercury News – Highlights from the Tech Museum's Award Dinner Tom Foremski’s “Silicon Valley Watcher” blog – Warm and Fuzzy Wednesday - Silicon Valley Awards Do-Gooders Wired – Do-Gooder’s Gather Tech Museum Awards In October, I was interviewed by Om Malik and Joyce Kim about my role in Silicon Valley and how Microsoft works with startups. The interview is posted on our site, www.microsoftStartupZone, and Don Dodge, on my team, blogged about it. Some highlights from our discussion, with questions and my comments: How Can Startups Partner with Microsoft? The basic premise of the Emerging Business Group is, we look at all the entrepreneurial activity, we look at where the money flows, where the angel investors, and where the entrepreneurs are going, and then the venture community. And we map that against what we're doing, so that we can provide context in areas where we can be helpful. We have a terrific program, the [Microsoft Startup] Accelerator Program, which is a significant way for us to help promote the companies where we can be helpful. It's typically tied to some partnership in and around product collaboration, and, of course, customer wins. So the kinds of companies that we've worked within the past include NewsGator, My Space, PolyServe, there are lots of interesting companies. The scale of that operation is significant. We look at about 100 companies a month. That winnows down over the course of 1,000-plus a year to about 200 a year, where they would say we're doing meaningful things. That, in turn, funnels down into areas of interest where the product divisions, which are the P&L units, the profit and loss units inside the company, do their acquisitions. So in any given year over the last two or three, we'll buy between, say, 12 and 20 companies that are in the startup zone, if you will. We certainly made larger acquisitions than that as well. Do Acquisitions Often Arise from Partnerships? It varies. Obviously, in some instances, entrepreneurs are very specifically looking at areas where we have need, and they'll build something that you might call a tuck in, a smaller, early stage acquisition for us. In other areas, a market opportunity will blossom, a company like Placewhere, where we now have our Live Meeting acquisition that was an interesting one. TellMe, most recently, was a great acquisition, a terrific entrepreneurially driven company, doing really innovative things that will have a cross-company impact inside of Microsoft. So, they vary, but it's also the case that it's rare for us to buy something where we don't already have a partnership. Does Microsoft Invest in Startups? We typically are not a direct investor. We Operate on a Global Scale: …in this world that we live in, which is flat, what I get to do in my core business, in and around working with innovative startups, is to see things on a global scale. We've got operations that are directly in Silicon Valley like entrepreneurial, venture-backed, best practices, [and are] in 15 countries around the world. We've got operations in 45 countries where we do this at scale, and it's soon going to be growing to nearly 100 countries. So the idea that a startup like Wallop, which is a member of our [Microsoft Startup] Accelerator Program, is getting a huge amount of traffic in China, we can help them. So seeing the entrepreneurial spirit, helping things explode on a global scale, there's no better place to be than Microsoft. More information about the new Microsoft Startup Accelerator Program can found at: Press Pass interview MicrosoftStartupZone web site On August 15, 2007, I was interviewed by Tom Foremski, publisher of Silicon Valley Watcher—Reporting on the business and culture of Silicon Valley. The podcast and video are posted on PodTech here (11 min 45 sec.) The complete transcript is posted below for those who prefer reading. Key take-aways:
- Microsoft’s Silicon Valley campus had 6 buildings that include about 2,000 employees focused on development activities. The lion's share of the activity is tied to consumer and related entertainment activities including Xbox hardware, IP TV, Hotmail services, distributed computing, our Mac business unit and research.
- A large part of my personal charter in the company is to focus on what we call Emerging Business Development -- entrepreneurially driven and venture capital backed businesses. The activity emanates from Silicon Valley, but it's certainly spread across the United States and the world. We’re doing this kind of engagement in 15 countries, whether it's in Israel or China and India or France or the UK or Canada or Singapore.
- Do we invest in startups? We're not typically a direct investor of capital. We invest heavily in a series of outreach resources to helping them go into market, helping them with technology scaling, et cetera. So, it's really a set of services that we provide.
- Partnering with startups: We're looking at well over a thousand companies a year on a global basis. That narrows down into a meaningful set of relationships where we mutually agree that we've helped each other, and that there's customer outcome that's really terrific, with probably several hundred companies a year.
- Acquisitions: In any given year over the last two or three we've been on a pace to buy two to three companies per month-- ranging from very, very small three or four-person shops that are doing interesting things, to very large ones. In my area we're concentrating on these venture-backed businesses, which I'd say typically in terms of call it a sweet spot for acquisition is somewhere in the say 10 million to several hundred million in price point.
- Local software economy: This initiative that I lead is touching 60 countries right now, and there's over 130 innovation centers that are in collaboration with the local constituents, so the government agencies, universities, local software associations, large and small corporations. These innovation centers are working on understanding the local problem set, the local knowledge economy issues. As the world goes flat, it's really all about leveling the playing field and bringing people up into the economy where technology can play an important part.
- Collaboration and coopetition with everyone: We have a very broad portfolio. There really aren't very many areas where we're not interested in partnering and/or looking. We have a pretty good appetite for partnership. Microsoft's business and the whole technology industry and software are expanding at an incredible rate, both creating massive vertical opportunities, as well as horizontal layers of opportunity. So, I think we're in a world of “coopetition,” where we're going to be competing and collaborating with everyone in the future.
Complete Transcript: TOM FOREMSKI: I'm here with Dan'l Lewin, who's VP at Microsoft, and head of Emerging Business Development at the Microsoft campus in Silicon Valley. Dan'l, could you tell us what you guys do here? You've got five or six large buildings. DAN'L LEWIN: That's right. Yeah, in the Silicon Valley campus we have about 2,000 employees focused on development activities. The lion's share of the activity is tied to consumer and related entertainment activities. FOREMSKI: Is that also Xbox development? LEWIN: Yeah, we have Xbox, hardware engineering, we have the complete end-to-end business around our IP television business, we have a lot of core services around Hotmail and related infrastructure services or MSN, so our online video, a lot of consumer oriented activities. We also have a large research presence tied to distributed computing and part of our search lab is also here as well. FOREMSKI: Oh, really? It's interesting, Google is just a stone's throw away from -- LEWIN: They're not far away. Neither is Apple. FOREMSKI: That's true. LEWIN: We have a Mac business unit here as well, exactly. FOREMSKI: You used to be at Apple. LEWIN: I was at Apple a long time ago, that's right. FOREMSKI: That's great. You've spent a lot of time at startups, too, not just in Silicon Valley but abroad. LEWIN: That's right. A large part of my personal charter in the company is to focus on what we call Emerging Business Development, and that's really entrepreneurially driven and venture capital backed businesses. So, while we know a lot of the activity emanates from Silicon Valley, it's certainly spread across the United States, and now through our outreach and programs around the world, we're actually doing this kind of engagement in 15 countries, whether it's in Israel or China and India or France or the UK or Canada or Singapore. So, we're kind of all over the world, too. FOREMSKI: Does Microsoft invest in these companies? LEWIN: We're not typically a direct investor of capital. We invest heavily in a series of outreach resources to helping them go into market, helping them with technology scaling, et cetera. So, it's really a set of services that we provide. We also coordinate and help through marketing and sales activities reduce cost of sales and things like that for these companies. Most of them, if they can align with Microsoft in a way that's supportive and collaborative for the end customer benefit, they're not having trouble finding venture capital from real venture capitalists that are looking at strategic return. FOREMSKI: Do you meet with venture capitalists and tell them the kinds of markets you're looking at in the future? LEWIN: We do. We meet with the venture capitalists really around the world. We've got a set of relationships. We look at where they've made their investments in the past, and we line up by looking at their portfolio of investments. So, a scenario would be for us to meet with a venture firm and meet with all the partners to understand the areas where their strategic interests lie in investing, and to carry on a conversation that we would call opportunity mapping about where, in and around what Microsoft is doing, we see good opportunities to be helpful. FOREMSKI: How many companies do you look at a year? LEWIN: At this stage we're looking at about 100 plus companies per month on a global basis. So it's well over a thousand a year that we look at. That narrows down into a meaningful set of relationships where I think we mutually agree that we've helped each other, and that there's customer outcome that's really terrific, with probably several hundred, 200 plus, companies a year. FOREMSKI: And how many acquisitions would you make a year? LEWIN: Yeah, one of the offshoots of this engagement process is that we end up understanding areas where we can be a good acquirer. In any given year over the last two or three we've been on a pace to buy two to three companies per month. So, I think last year was on the order of 26 companies, and then this year we're kind of midway through the calendar year, so we're on scale for about that same number. FOREMSKI: And the size of those companies? Are they small shops or -- LEWIN: Well, they range, as you know, from very, very small three or four-person shops that are doing interesting things, to very large ones. In my area we're concentrating on these venture-backed businesses, which I'd say typically in terms of call it a sweet spot for acquisition is somewhere in the say 10 million to several hundred million in price point, so some, you know, depending upon how hot the area is. FOREMSKI: Which are the hot areas for you right now? LEWIN: Which ones aren't hot? That's the real question. We have a very broad portfolio. So, there really aren't very many areas where we're not interested in partnering and/or looking. We have a pretty good appetite for partnership. Clearly that is our model. We do well when others are working in and around our platforms. In terms of the acquisition areas, the best indicators are to look at our past transactions, and that's usually a sense of where things are hot, and that's all available on our Web site. FOREMSKI: To many people you've become the human face of Microsoft in Silicon Valley. Is Microsoft going to be expanding its presence here? LEWIN: Well, we have been expanding the presence. I've been here a little over six years now. The physical campus that we're visiting today, or you're visiting and I live and work on, is coming up on eight-years old. So, the company has had a presence in Silicon Valley for 25 years, the campus with these five buildings, the sixth opening up very soon, and through our recent TellMe acquisition we have another campus that's about a mile away from us right now. So, we're constantly growing and expanding both our core businesses and then through acquisition, where, of course, there's great opportunities here in the valley, some of the best and brightest, and some of the companies that we're engaged with will undoubtedly end up as part of our acquisition strategy. FOREMSKI: You spent 30 years in the valley, and you've done a lot of traveling to other small valleys around the world. So, I think you can say that that's unique about Silicon Valley that you don't find elsewhere. LEWIN: Well, Silicon Valley is the most diverse place on the planet, at least from my personal experiences in traveling around the world. So, it's a combination of -- well, it starts with the weather, the weather is terrific, but Stanford and Berkeley, the draw that they present to the academic community, the diversity and the talent from around the world, many, many large companies, the spirit of a frontier, willingness to tolerate and, in fact, to praise failure. These are things, cultural traits, concentration of assets, and a terrific willingness of I think the community to embrace a new idea. This is a terrific place. I see things around the world but nothing quite like the valley. FOREMSKI: In terms of overseas innovation centers, what's cropping up on your radar screen? You were saying you were in Latin America recently? LEWIN: That's right. One of the areas that I oversee is part of this emerging business area is tied to what we call the local software ecosystem or local software economy. We're as a company doing business in over a hundred companies [countries] around the world. The initiative that I lead is touching 60 countries right now, and there's over 130 centers, about 130 centers that are in collaboration with the local constituents, so the government agencies, universities, local software associations, large and small corporations. So, these innovation centers are working on understanding the local problem set, the local knowledge economy issues. As the world goes flat, it's really all about leveling the playing field and bringing people up into the economy where technology can play an important part. So, we're really excited about this initiative, and the best practices that emanate from Silicon Valley again can be translated as best as possible around the world, and localized as appropriate. FOREMSKI: Okay, cool. In terms of trends, is there anything that's catching your eye specifically right now? LEWIN: There are many exciting things. Personally I'm really, like most, excited about what's going on with the core Web, the technologies and services around Web Services. Software plus service is the way we look at it with the edge devices, using all the compute cycles. Mobility is important to that. So, from our standpoint in what I see, you know, some of the most exciting examples come out of the gaming community, for example, and the Xbox world is interesting because there's a very sophisticated compute machine on the one side, with local content, and then the online services that blend in with that are really, you know, things to come. So, we think the software plus services model around the world is going to be really exciting. FOREMSKI: Interesting. Microsoft seems to be partnering much more than in the past. In the past it didn't have quite as good a reputation. How has that been achieved? LEWIN: Well, I think it's a combination of appreciating our corporate position, the leadership role we have, which is a broad footprint across the board with the scale of our business. So, I think a certain acknowledgement and maturity around our role in the industry, so we call that taking on the responsibility of a leader, so I think there's that going on. I also think that the industry is ever changing and rapidly moving forward. We've now in this last six or years been rapidly expanding to the edge, right. TCP/IP is everywhere, edge devices, compute cycles at the edge, and I think if you look at the early '80s and '90s where we were collapsing to the desktop around office automation activity and things like that. So, I think Microsoft's business and the whole technology industry and software is just expanding at an incredible rate, both creating massive vertical opportunities, as well as horizontal layers of opportunity. So, I think we're in a world of coopetition, where we're going to be competing and collaborating with everyone in the future. FOREMSKI: Microsoft is such a large company and in so many businesses. Does that make it less agile in taking advantage of these opportunities? LEWIN: Well, we certainly operate with certain principles around our management behaviors and things like that, but I think there's a really exciting sort of entrepreneurial spirit inside of the company. We have a terrific I think design around the way our product groups are organized under the three different division presidents, and the way things work kind of better together, and people team cross-functionally. So, I think the management structures that have been put in place in the last few years -- just personal opinion -- that Steve Ballmer has put in place, and with the division presidents and now Ray Ozzie coming on board to drive technology collaboration across all the groups, I think we're very well positioned, and the spirit is pretty darn strong. We're pushing 80,000 people or so on a global basis, and there are some incredibly innovative things coming out, whether it's the Surface Computing technologies that we just announced, or some of the robotics toolkits that we're coming forward with, very rapidly growing, strong position in mobility with our Smart Phones, et cetera. So, I think the spirit is here. FOREMSKI: Okay, good. Well, thank you very much for your time. LEWIN: Thanks, Tom. Contrary to what Bruce Chizen, Adobe CEO, has said about our lack of intention to maintain a cross-platform solution, we have historically demonstrated a market-driven pursuit of interoperability on behalf of our customers. That won’t change, hasn’t changed. Cross-platform support is a small part of our overall interop commitment, and we have a strong commitment to both. We think it’s an important point because our support for real interoperability affects the ability of our customers to drive value from their IT investments and affects the ability of our ISV partners — large and small — to provide solutions that work in the heterogeneous world in which we live and work. We get that. We want to reach out to the broadest audience, and that means going where the audience is — on our platform, yes absolutely, and on others. A few stats on our cross-platform commitment, which goes way back:
- Apple II — Go back nearly 30 years, the Apple II boot ROM included Microsoft Basic.
- Macintosh -- Microsoft's earliest versions of Word and Excel were released first for the Mac platform in 1984 and were followed by Office in 1989.
- We ensured that both Office 2004 and Virtual PC supported the Mac Tiger OS, and another new version of Office for Mac is on its way. Scheduled for the second half of this year is the first Universal version of Office for Mac for PowerPC- and Intel-based Macs — Microsoft® Office 2008 for Mac.
- And then there’s Silverlight, that’s cross-platform too, we’ll get to that in a moment.
- An FYI, our Mac software business unit is the largest, 100%-Mac-focused developer of Mac software outside of Apple itself.
So you see, Macintosh cross-platform support is a key commitment and part of our strategy, but our overall interoperability commitment goes much, much deeper. Think Java, Linux, Open Source, IP access, open standards, and more. The Larger Strategy — Interoperability by Design Bill Gates introduced this concept more than two years ago. It is based on our industry leadership in expanding the use of XML and delivering technology that empowers customers by working with the applications and solutions they already have in place. Over the past year, we have broadened our investments in interoperability and collaborated with both partner and competitive software and hardware companies — particularly where improving interoperability for shared customers benefit all parties. And we named a new corporate champion to spearhead our interoperability efforts – Bob Muglia, our SVP of Servers and Tools. Why are we doing all of this and why does it matter? It matters to our customers — and matters a lot. They have always worked in heterogeneous IT environments and require greater levels of interoperability from their IT vendors. As a technology leader, it is our responsibility to support interoperability — in a way that promotes innovation and the development of the software industry as a whole. We design our products to work well with others out the box, to not require expensive and complicated consulting and integration engagements to work, and we’re building bridges to competitors and partners alike to foster competition and coexistence across innovative solutions. In fact, we deliver interoperability by design in four important ways: through our products, collaborations with the community, access to our technology, and industry standards. Interoperability by Products: Microsoft’s products connect and exchange data with software and hardware from more than 100,000 other companies. There are more than 25,000 configurations of PCs that work with Windows out of the box. Our technology enables translation between diverse systems through the use of protocols and data formats based upon XML. An important recent example is Silverlight, our cross-browser, cross-platform plug-in for delivering the next generation of Microsoft .NET–based media experiences and rich interactive applications for the Web. It offers consistent experiences between the Windows-based and Macintosh computers without any additional installation requirements. Our chief software architect Ray Ozzie has said that “when you are developing for the universal Web (browsers for a range of devices) you can’t think about what platform the user is running on — it could be a phone, a PlayStation portable — do they have a browser on that? The guidance I give our development team is to look at where the audience is, and prioritize development for Silverlight based on that, we’re investing that way.” We’ve made significant progress on interoperability with Linux/OSS vendors, including technical collaboration agreements with three of the leading open source software businesses — Novell, JBoss (now part of RedHat) and SugarCRM. In fact, to achieve interoperability by products, and in particular to achieve this interoperability between products from Ajax technology vendors, we entered into a highly collaborative effort — OpenAjax Alliance. Comprised of nearly 90 companies, it hopes to accelerate success with Ajax and drive the future of the Ajax ecosystem. Interoperability by Community: We’re building technology and business bridges to partners and competitors to increase ROI for our customers. We’ve led and continue to support the goals of the Interop Vendor Alliance (IVA), a cross-industry group of global software and hardware vendors and other organizations that work together to enhance interoperability with Microsoft systems on behalf of their customers. With 20 founding members of the alliance, including Sun, and more than 40 members today, the IVA is further evidence of our long-term investment in improving interoperability between heterogeneous systems. Listen to Greg Papadopoulos, CTO and EVP of Research and Development at Sun, talk about the importance of Microsoft and Sun solving interoperability problems on behalf of customers. We’re also listening intently to what customers are saying about key interoperability scenarios. Through the Interoperability Executive Customer Council (IECC), formed in June 2006, we’re identifying areas for improved interoperability across our products and the software industry. Last October we hosted IECC in Redmond where we met with founding member CIO/CTO’s from Societe Generale, LexisNexis, Kohl’s Department Store, Denmark’s Ministry of Finance, and many others to get feedback on the pressing areas of technical and business interoperability. In May of this year we had our second full member meeting. Just recently, Microsoft’s Jean Paoli, XML co-creator, told me that based on our review, we believe that we’ve addressed and made progress on approximately 70 percent of the interoperability concerns that were raised in the first six months. We are working with the council members’ architects and CIOs to review the final status of each issue to confirm. We particularly value working with our customers on identifying issues and providing solutions and we urge people, as I said in the headline of this column, to work with us and ‘get the facts’. Of course, we need to do a better job of communicating them as well. Jean and Tom Robertson head our interop programs. Here’s our commitment to some other important platforms and communities: Java — We’ve supported cross-platform compatibility between Java and .NET for several years — and broader interoperability with Java was first supported through COM, via third-party vendors. With the release of Microsoft .NET 1.0 in 2001, we introduced Web Services, which from then on became the main way we’ve supported interoperability between the two platforms. In fact, Microsoft and other vendors (Sun, BEA and IBM) are also part of the Web Services Interoperability Organization (WS-I). Given the high concentration of both Java and Microsoft .NET developers worldwide, we launched Resources for Java Developers and more recently, Project Tango, a joint Microsoft/Sun cross-company collaboration that will ensure strong Web Services interoperability between the two platforms. Linux and Open Source — In 2005 at LinuxWorld, we announced the formation of the Linux/Open Source Software Lab on our Redmond Campus. By running Linux and a variety of other OSS in a highly Microsoft-centric IT environment, we’re learning how those technologies can better interoperate with Microsoft’s technologies and vice versa. Visit our community website, Port 25. In November last year, we announced what we think is a historic bridging of the divide between open source and proprietary software. We have signed three agreements with Novell that, taken together, will greatly enhance interoperability between Linux and Windows® and give customers greater flexibility in their IT environments. We’re also planning to open a joint interoperability lab that focuses on interoperable virtualization between the Windows and the SLES (SUSE Linux Enterprise Server). In early June, we announced a broad collaboration agreement with Linux platform provider Xandros, Inc. and collaboration with Linux desktop provider Linspire. Both extend a bridge between open source and commercial software and deliver customers real value in mixed systems environments. SecureIT Alliance — Formed in 2006, its mission is to develop, enhance and promote applications that interoperate with the Microsoft platform, providing informational resources for security technology professionals. We now have more than 100 members, including Symantec Corp., McAfee Inc, Trend Micro and VeriSign as well as innovative startups such as Avoco Secure, Centrify, and e-Security. OpenID —With this universal online identity, we’re working with the industry to enable interoperability between discrete systems — what we call ‘anywhere access.’ Interoperability by Access: By offering to make our technology and IP available for use by others, Microsoft opens the door for greater innovation and a more competitive market. In addition to making source code available in many cases, Microsoft makes patent rights available to others to develop their own implementations of key technologies such as Web services, ECMA, OpenXML, Virtual Hard Disk, Sender ID and others via the Open Specification Promise. As an example, we’ve designed interoperability software in Virtual Server 2005 R2 to support Linux guest operating systems and the royalty-free licensing of the Virtual Hard Drive (VHD) format to more than 45 vendors such as Akimbi, Brocade, Diskeeper, Fujitsu-Siemens, Network Appliance, Platespin, Softricity, Virtual Iron, and XenSource. We’ve also licensed our IP to such companies as TurboLinux, and have inked collaborative agreements with SAP and Hyperion as well. In early June we inked a cross-license patent agreement with South Korea’s LG Electronics. Under terms of the deal, LG will be able to use Microsoft-patented technology in its products, including Linux-based embedded devices. And we get access to LG’s patents and will license other ones developed by LG, now owned by MicroConnect Group. We have also licensed our IP to XenSource, and ventured into IP licensing agreements with Nokia, Symbian, SAP, NEC, Toshiba, Sony, Erickson, and Autodesk. Interoperability by Standards: Standards are one way of many that the software industry uses to foster a competitive marketplace. Even more than that, standards help establish a common ground for everyone to use — they simply make things work better together. We are working with many formal and informal standards efforts, including organizations such as IETF, W3C, OASIS, IEEE, ETSI, OMA, ECMA, ISO/IEC (JTC1) and ITU. We continue to participate in, and support industry standards for improved data exchange and application integration in technologies such as web services, financial and business transactions (EDI and RFID support in Vista), speech-enabled applications and websites (SALT in Speech Server 2007), and Web content (XHTML 1.0 support in Office 2007). Other examples of our standards support include:
- Web Services at W3C — Co-developed the Web Services specifications with others. Specifications submitted to the W3C, and after further input by others many have been published as open standards.
- XML Paper Specification (XPS) at ECMA International — Submitted XPS (our portable document format) to ECMA for standardization. In a letter from Brad Smith to the Director General of Competition for the EU, we committed to submitting any extensions and further versions for the next 10 years.
- OpenXML at Ecma — Contributed our Office OpenXML specification to standardization at Ecma International, and with the further work of many others at Ecma, the expanded specification was approved as an international open standard and is undergoing further submission for publication at ISO/IEC.
- Video Coding — Submitted video coding technology to SMPTE where, after input and modification, the SMPTE VC-1 video coding specification was published as an open standard.
A Word about Open Standards vs. Open Source It’s worth noting, as Bill Hilf, General Manager, Platform Strategy, says, that interoperability is not a new focus for Microsoft. “We have been enabling interoperability via Host Integration Server and Services for UNIX for some time. A key approach to bridging the interoperability divide at Microsoft is our strong support for open standards, as seen in our involvement in Web services, XML and SOAP. It is these open standards – not open source – that help make today’s integration technologies more interoperable than ever before. We believe that incumbent vendors like Microsoft and vendors with emerging platforms need to share the responsibility of bridging the interoperability gaps and working together to meet customer satisfaction.” So given all of what I’ve said above, we think the evidence is already in. We’re committed to coexistence and interoperability. Cross-platform, yes, but it’s part of our bigger story on interoperability. So Bruce, and I mean this in the nicest way, we’re neighbors, worked together at Apple, and respect each other, but get the facts: we have supported cross-compatibility on the Macintosh for almost 30 years and we will continue to do so, and we strongly support interoperability with competitors and friends alike. When we do so, our customers win, the industry wins, we all win. | View in Web Browser | /_layouts/images/ichtmxls.gif | /Blogs/headlines/_layouts/xlviewer.aspx?listguid={ListId}&itemid={ItemId}&DefaultItemOpen=1 | 0x0 | 0x1 | FileType | xlsx | 255 | | View in Web Browser | /_layouts/images/ichtmxls.gif | /Blogs/headlines/_layouts/xlviewer.aspx?listguid={ListId}&itemid={ItemId}&DefaultItemOpen=1 | 0x0 | 0x1 | FileType | xlsb | 255 | | Snapshot in Excel | /_layouts/images/ewr134.gif | /Blogs/headlines/_layouts/xlviewer.aspx?listguid={ListId}&itemid={ItemId}&Snapshot=1 | 0x0 | 0x1 | FileType | xlsx | 256 | | Snapshot in Excel | /_layouts/images/ewr134.gif | /Blogs/headlines/_layouts/xlviewer.aspx?listguid={ListId}&itemid={ItemId}&Snapshot=1 | 0x0 | 0x1 | FileType | xlsb | 256 |
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Dan'l Lewin
Corporate VP, Strategic and Emerging Business Development
Dan’l Lewin, corporate vice president for Strategic and Emerging Business Development (SEBT), is responsible for Microsoft Corp.’s global relationships with startups, venture capitalists and the business relationships with industry partners such as Adobe Systems Inc., Sun Microsystems Inc. and IBM Corp...
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Featured Startup
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