Being a software company, Microsoft is always in the spotlight for its
products. As CIO, how do you leverage Microsoft's own products for the
company's internal IT? Do you have access to all the latest and greatest?
our own “dogfood” long before our enterprise customers taste it.
Internally, the program is called “Microsoft’s First & Best Customer”
because Microsoft IT is the first customer of Microsoft’s enterprise
products. We run alpha and beta versions of products and services in
production environments to help improve product quality and test
enterprise scenarios for the product teams. Then we later publish our
experiences with the products and services in the form of white papers
and videos as part of Microsoft IT Showcase. Your readers can BING it –
Microsoft IT Showcase.
example, we run a very large SAP ERP system, a single instance that has
been running on Beta software of SQL Server 2012 since November 2011. To
give another example, we have over 23,000 systems and 19,000 employees
using Windows 8, testing new features and new hardware. We recently
completed a couple of Big Data demonstrations, using Hadoop running on
Windows Server. This demonstration was the proving ground for investment
in this area, to start generating business insight from user behavior
data on a much larger scale than we have been able to do before.
Do you think in some ways, Microsoft's internal IT is their own biggest/best
big and the first customer, but we may not be the biggest. For example,
we have about 130,000 seats using Microsoft Dynamics for CRM, and we
manage more than 140,000 virtual machines using System Center. That’s
big, but there are bigger customers out there.
In the little over four years you have been CIO, how have things changed at
Microsoft? Did you see a move to the cloud like many of your customers?
never stand still at Microsoft, which is why I love it here. The trends
of cloud computing, consumerization of IT, natural interaction and
information intelligence, have all changed the way enterprise IT
departments deliver services. In my mind the two biggest things that
changed were the move from analog to digital and the expansion of our
was at Disney we made the move from analog to digital. It’s the shift
from editing film to editing pixels. At Microsoft, we still ship
fully-packaged product to retail shelves, but more of our products are
delivered as online services. I’m talking about Windows Azure, XBox
Live, trial downloads, Office365 and more. That requires us, as an IT
department, to change so we can be faster and better at delighting
customers through online engagement.
and I’ve already alluded to this, we’ve increased our retail presence
and our ability to engage with our consumers, businesses and public
sector customers online. In digital business, consumers, customers and
business partners expect higher touch, more personal service and on
demand access to our product and services. Increasing our presence is
giving us the ability to meet this demand.
You have a lot of experience as a technology leader in many different
companies. What one thing is unique or differentiates Microsoft from the
From the CIO’s point of view, there are
many similarities between Microsoft, Disney and General Motors. The
difference is the software and technology aptitude and passion for
technology of employees from all levels at Microsoft. As a result,
Microsoft IT has to draw boundaries for how employees utilize and manage
technology. For example, every Microsoft employee has admin rights to
their computer, which isn’t the case at most enterprise companies. But
at Microsoft, that’s the right choice to balance employee empowerment
and IT control.
What direction do you see IT moving to in the
future? More services to the cloud?
It has become clear in the
last several years that IT is mission critical to business. Nowhere is
this more evident than around data collection and analysis. Today, data
is being collected at an amazing rate, whether that’s telemetry from a
car, sensor data from a machine, or modeling online and offline customer
behaviors. Business leaders are anxious to interpret this data in order
to find new trends and gain new insights so their businesses can compete
The reality is, most data that is
collected will be ignored or thrown away. IT has a unique opportunity to
provide new tools for helping business leaders make sense of this
information overload by providing a clear, rational approach to
Cloud computing plays an important
role. Many are familiar with the platform as a service model, however,
less are familiar with the data as a service model. We use a data as a
service model for our internal BI architecture so we can seamlessly
expose data from the cloud and from other data sources, in a single,
unified catalog of databases. Terabytes of on-premises and cloud data
can be exposed from a single unified data catalog using a single URL,
and then consumed by line of business applications, mobile apps, Excel
What are some of the biggest challenges you
have experienced as Microsoft CIO?
When I hear the word challenges, I always
think of opportunities. I think all CIOs are wired that way.
We’re in the midst of a big
opportunity within Microsoft IT. It’s tied to the move from analog to
digital, and the complexities that come with that. More so, it’s tied to
Microsoft’s vision to create seamless customer experiences that combine
software with the power of the Internet across a world of devices.
That’s a bold vision, one that my team needs to enable.
Microsoft IT will help Microsoft achieve its full
potential by transforming it into a real-time enterprise.
Think about it this way. As
Microsoft faces competitors across business and consumer segments, the
company needs to be able to respond to rapidly evolving market
conditions. This leads to new business strategies, new models, and
executing them with more agility than in the past. Speed is critical.
Microsoft IT is in the midst of
transforming the way it operates. I view it as a journey to
next-generation IT, which is characterized by being more strategic,
innovative and competitive. We’ll get there by aligning IT to business
processes, helping the business speed up those process, and focus on
delighting the customer.
It is easy to get caught up in the hype of
new products and technologies. What are some items you have to consider when
aligning your technology roadmap with the overall business strategy?
As Microsoft CIO, my top priority is to
transform our IT organization to meet the company’s ever-evolving
business and technical needs. At the heart of this is an
IT operating model that integrates processes, governance, services, and
organization blueprint. This integration provides a view
of the components of Microsoft IT and how we will work together
with Microsoft’s lines of business.
We want an operating model that is
transparent to the capabilities we have, the structures and performance
targets we own, along with how those pieces enable our operations to
serve our customers. As we move to real-time enterprise, we need to
ensure that we have a holistic view of everything we do.
A lot of the customers who use Microsoft's
products are small businesses (less than 500 employees). What advice can you
give to IT directors/CIO's of these businesses to take their technology to
the next level?
As more and more businesses become digital
and move away from analog, IT leaders need to organize around business
processes as opposed to organizational boundaries, or the P&L structure
of the company. This approach helps remove friction from the delivery of
products and services to customers, and will allow IT leaders to delight
their customers with better and faster services.
When Microsoft releases new enterprise or
business-grade products, how long after release does Microsoft usually
deploy for their own use or do you deploy before the products are released
Microsoft’s First and Best Customer, we deploy our products and services
internally before commercial release. We run alpha and beta
versions of products and services in our enterprise and give feedback to
the product teams to help improve product quality and test enterprise
scenarios. As an example, we’re an early test environment for both
Office365 and Windows Azure. We’ve had a good experience
deploying cloud computing at the company. I’ll share a few results
from a year-long pilot program within IT commerce, which is the heart of
how we monetize products and services for Microsoft. The pilot was a
model for our move to a real-time enterprise. Results showed that
application build-time duration was reduced by 25% while the cycle time
for a product launch was reduced by 60%. In the meantime, business
partner satisfaction increased 44 points and channel partner
satisfaction increased 83 points. This successful pilot validated much
of the strategic change we are driving today within Microsoft IT.
What is the best part of your job?
I love being surrounded by smart, diverse,
motivated people. What sets this job apart for me is that I get to spend
about one-third of my time meeting and speaking with CIOs and IT leaders
from across industries and regions of the world. This past week I was in
Detroit to meet with IT leaders at auto manufacturers. After that I
visit Pittsburgh to meet with IT leaders at some local forums and
one-to-one. Then I was off to Miami to attend a Microsoft-hosted summit
of our large, global customers. These engagements are valuable exchanges
for me, to both listen and advise.
What are you doing to measure, control and to
enhance the quality of the products at Microsoft?
You may remember Bill Gates Trust Worthy
computing memo (http://www.microsoft.com/en-us/news/features/2012/jan12/GatesMemo.aspx),
and it had a galvanizing effect on everyone at Microsoft, even though it
was before my time at the company. In essence, a number of things
changed the way software was developed not only at Microsoft, but at
many companies. Everyone realized at that point there was tremendous
risk if we continued on the path that was in place before. The
trustworthy computing initiative came a whole set of changes, among
them: architecture changes, peer reviews, quality index, and a
relentless march on the belief moving the quality of the software
Another big thing that changed
during this time frame – there had been a practice of having one
developer going to another developer working out some way of their
particular parts of the code to interoperate. As part of the initiative,
now we require through all interfaces to be open and published not only
between Microsoft developers but also the community of developers across
the world that work on Microsoft products. This open publishing
interface standard is also used to benefit the quality of the products.
In that period of time we saw some dramatic change.
One other thing on the IT
front that relates to the cloud, one of the things we measure is called
“severity one defects in production”. These are cases where business
applications at has a service interruption that causes revenue loss, or
reputation damage, some of a bunch of measures, etc..but these are the
most significant kinds of interruptions that could occur. All of our
teams are measured on this, and the goal is zero, but it is software so
there are always things that could happen. When I started four years
ago, we were heavily on our way to virtualizing our applications – today
more than 70% are virtualized (those that are not in the cloud), and we
saw a dramatic reduction in sev 1 defects in production just by
standardizing on the virtualization technologies. That took a lot of
configuration decisions away from operations people or developers and we
saw an immediate 50% drop on those sev 1 defects just from that
standardization. By moving apps to the cloud, we saw another 50% drop.
Again, just because of normalizing and standardizing the software
I am really super please with
the progress the company has made but also our IT organization through
the adoption of a real solid set of principles and also leveraging
ActiveWin.com (Bob Stein):
How has IT governance changed at Microsoft?
Could you use a standard governance model or did you have to invent
I will use a simple example. Because we
were organized the way our organizational chart looked nice we created
governance the same way. For finance applications, there was a
governance counsel that only finance people could vote on what was in
the portfolio, similar for HR, sales, marketing, etc. and they would
prioritize their portfolio then it would go up to a uber-governance
counsel and they would decide how much to spend. That was the old
structure, it was very simple. If you were a line of business owner it
was very clear that you sit on a particular counsel and only vote on
stuff that is in your space. When we looked at it from a process
perspective, now all of a sudden you may find yourself on more than one
counsel or some got combined. Now we look at processes, for example the
human capital management process with people from finance and HR who sit
Here is a simple example for
outcome from that. I used to get a headcount report from finance, and
one from HR, and they would never match. You just wonder why, since we
are counting people that are real tangible things. How hard could this
Now we have one process for
counting heads shared by finance and HR. This month for the first time,
I got a headcount report where finance and HR actually agree how many
people work at Microsoft. It is a simple example, but we eliminated
about 12 different reports and a whole bunch of applications. The
decision was made at the governance counsel in terms of what we were
going to fund in terms of a business process or systems change. Similar
things are going on across the company. The change is really around what
we fund and the scope of what people get to comment on. It has been more
challenging for the business units since they sit on more than one
counsel from a governance perspective. But it also gives them a much
better idea where their dependencies are across the organization. It has
gone from a “heads down, only worry about my space” to a “look up and
look around model”. Now we can ask the question much more easily “What
is the best thing for Microsoft and its customers?” rather than “what is
the best thing for the business area?”
Do you have anything to add?
The role of the CIO is changing rapidly in
this digital evolution. No longer are we relegated to the datacenter. We
are at the table with the chief marketing officer as brand stewards,
responsible for delivering a great customer experience. There’s
increasing collaboration and dependence between IT and marketing here at
Microsoft, which is reflected in other companies and industries as well.
In order for a company to get the most out of its marketing investments,
the marketing team needs IT to be a strategic partner.
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