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Building the new Microsoft

As COO of the software giant, Kevin Turner has a tough assignment ahead: taking on Google and reshaping the company.

Kevin Turner has come a long way from the checkout line at Wal-Mart.

Turner joined Microsoft nearly a year ago as the company's chief operating officer. Before that, he spent nearly 20 years at retail giant Wal-Mart Stores, working his way up the ladder from part-time cashier to CEO of the company's Sam's Club unit.

Shortly after graduating from college, he sought career advice from Sam Walton, founder of Wal-Mart, who suggested information technology. A self-described "average programmer," one of Turner's most memorable assignments was ferrying "some guy named Steve" from the airport to Wal-Mart's Bentonville, Ark., headquarters.

That was Turner's introduction to Steve Ballmer, who would later become Microsoft's chief executive. Now he's Turner's boss, as the world's largest software maker begins what could be a painful shift from being a product-centric company to one more reliant on services and IBM-style "solution" sales.

Last week, Turner made his first major speech to more than 7,000 of Microsoft's industry partners at a conference in Boston. The group represented some of the company's most important relationships: Roughly 95 percent of Microsoft's revenue comes through its partners, Turner said.

He sat down with CNET News.com right after his talk to discuss what he's learned at Microsoft so far, what it's like to be an outsider, and the importance of beating Google.

Q: You've been at Microsoft roughly 11 months. Obviously, you knew the company pretty well before you came here. Any big surprises? Was there anything you didn't realize as an outsider that you've learned now as an insider?
Turner: You know, as a longtime Microsoft customer--14 years--I bought a lot of stuff. There are a couple of things (that I've discovered) that truly have been amazing. One of them is the capability of the company is quite remarkable. There is so much capability and opportunity for us to continue to innovate, and that's been a very humbling learning experience for me. I mean, obviously I knew the company was extremely talented, but that sheer capability of research and development, and how they work together with customers and partners to connect it is something that has been a learning experience and something that I've been extremely excited about.

I think one of the things that we've got to build on is communicating the software road map, explaining to people how this stuff works together and where it works together.

The second one is, just this sheer scope of Microsoft operating out of over 100 countries. It's truly a global company and, as I mentioned, I've been to quite a few places, but not near enough and not as many as I'm going to have to go to. That is a whole frontier for me...not knowing what to expect. (I've) had some experience in international markets, but not in 100 countries. So the sheer scale of that has been quite surprising--it's the amazing capability and the people to go with that, as well as the scale of 100 countries.

High-level executives who have come into Microsoft from the outside in years past--Rick Beluzzo, Mike Maples--haven't had the best track record. Did that give you any cause for concern before you came here?
Turner: Well, certainly I familiarized myself with people from the outside that had come here. But you know, first of all I had known Steve a very long time, so I'm proud to report that the same way Steve treated me as a customer, is exactly the same relationship I have with him today. That hasn't changed. There are no big surprises. He would challenge me when I was a customer. He challenges me as I'm a direct report. But he is the same person, and so I knew that. I had a comfort level that was important to me, and I knew that. But he certainly lived up and went beyond my expectations in that regard, so that's not been a surprise to me.

I took 30 days off for the first time in my work life. I had never taken off more than a week's vacation at a time. But when I resigned from Wal-Mart and joined Microsoft, I took 30 days in between that time. And so that was an intentional unplugged period, and one of the things I did that I think is very helpful is I took inventory of all of the people that I had onboard. Yes, I was familiar with the people who came before. But you know, those people won't define what I did. My results and/or the results I hope to achieve will be what defines how I do at Microsoft.

You've come into Microsoft at a pretty momentous time. There's huge change going on. You mentioned the change in Microsoft's business from being a products company to being more of a solutions company. When you're talking to partners, how do you deliver the message that it's a safe step to take with Microsoft going forward?
Turner: You know, I think one of the things that we've got to build on is communicating the software road map, explaining to people how this stuff works together and where it works together. I find that we're not as good at that as we're going to be, and so I really elevated that and put it on peoples' performance reviews and goal sheets and commitment sheets this next year. And we're going to survey our customers and our partners and ask them how good are we at articulating our software road map. So, that is one way I think that we can get people more comfortable with where we're going is by being able to get out there.

The second area...is really encouraging our people to embrace licensing and embrace security. Those typically have been conversations that we've kind of reacted to in the past. I want to get proactive. I want to step into the discussion and not step back, and that's one of the things we're talking to our group about next week is that ability to get proactive and really, you know, define your own destiny. Certainly the importance of partners with that is critical. But I think we just have to get better with storytelling about how these things all work together, and certainly doing that puts an obligation on us to have our act together and make sure that it all connects.

With Microsoft's new Live services approach, who will be the new, big partners in that area? Who will be the new IBM, Intel, Dell and Hewlett-Packard?
Turner: I think that there are some huge opportunities as you go down the stack. I mean, we have so many different classifications of both partners and customers. If you go down the stack and you start with small business, there are tons of opportunities in there for system builders, for some of our OEMs (original equipment manufacturers), for a lot of people from the subscription standpoint.

They go up the stack into the midmarket. What do they want to have hosted, and where do we go in that regard, and there are all kinds of local boutiques and other shops around and different classifications of partners. It just depends on where we want to play. And I would tell you that that's a great example of where we're figuring that out in real time, but doing it with partners versus developing the solution and then saying, 'OK, how does it all work' and make it work.

So this is a different, subtle shift. Everybody always wants more, and they always will. But it's a real-time evolution...I really like the way we're approaching it, and I agree with it and I'm really excited about the opportunity that this is going to provide for the whole breadth of partners that we have.

You mentioned product road maps as one thing you want to approach differently. What do you hear from customers--and you said you've met with a lot of customers recently--and from your sales team about the top customer concerns? Have they changed in the past year? At one time it was security or product road maps or licensing changes.
Turner: You know, the biggest thing I hear from customers is, look, in the past the grade card for a CIO or for somebody running an IT shop was, "Keep the lights on, be under budget, and don't stop growth." What's changed now is the fundamental shift that says, "Hey, we need to use technology and systems as a competitive advantage so, how do you help me create business value?"

The biggest thing that we have to do for CIOs and for business decision makers as well as IT professionals is to help them create that. They've got a standard budget that doesn't go away. They've got to keep it running right.

The art of our selling has to continue to evolve at the same rate, if not faster, than the art of the solutions.

But the bar has changed; it's raised. I think it's an evolution, and the art of our selling has to continue to evolve at the same rate, if not faster, than the art of the solutions. So one of the sessions I'm running next week at our national worldwide sales conference is world-class selling. We've got a whole segment on "What does being a world-class seller mean?" It means listening to people; it means saying thank you; it means the little things. But then it also means how do you transition into selling solutions? How do you articulate the software road map? How do you connect to business value? How do you learn somebody's business to be able to see what solutions map to that?

Do you think there will be a challenge for the sales force? I mean, they haven't been doing as much of that in the past, you know, so it's kind of a new area--the solutions area.
Turner: I find our people hungry for it, because our customers and our partners are hungry for it. So, it's not something we have to go jump-start. It's something we have to facilitate.

Ballmer mentioned the other day that there's going to be a massive effort put behind launching Vista and Office 2007. Can you tell us any more about what's going into that launch? Is that something you're involved in?
Turner: Oh yeah, marketing and public relations and all of that are areas I get to work with. (Regarding the Windows and Office 2007 launches,) I will tell you that, it's the biggest thing that the company has had in many years for obvious reasons, and the company has a history of doing these big launches really, really well. There's a lot of learning from the past as well as how is the environment changed and how do we need to adapt and go into that.

You mentioned the concept of "one Microsoft" in your speech this morning. I think you were talking about that aspect of the partner relations. But does that also apply within Microsoft--that idea of bringing together these many areas of the company?
Turner: It certainly does, and the "People Ready" campaign that is in the process is also how we're trying to run Microsoft, and I'm very much a proponent and a supporter and a driver of the initiative. It's about putting people at the center. It's about making sure we're all on the same page. I believe that getting us all on the same page, that's the job of leadership.

This morning, you made some interesting comments about Google and enterprise search. Are there other areas you're concerned about besides enterprise search as far as Google is concerned?
Turner: Well, we have a lot of competitors. As broad as our portfolio is, it invites competition. And I also believe that competition makes us better. So, I've told our group that the hardest products I find to run within Microsoft are the ones that don't have competition. And I think that, you know, any enterprise search area, we're not going into that area because of competition. We're going into it because our customers want it and that's a space that we should excel at. So I'm very excited for us to get after that and make sure that we drive deployments and adoption of our enterprise search solutions. But yes, there are others, but it's in a lot of different spaces.

The "solution sell," that's been IBM's game for quite some time. When you go and speak to CIOs of a big company, do you feel like it is a harder sell because you are being compared to IBM in that aspect?
Turner: No, I think that our definition of it is different than IBM's. We don't intend to help people on how to run their business. We intend to tell people, 'These are some opportunities that we want to enable you to run your business,' and we want to map our technology to how they do their work and optimize that, and we want to do it with partners and with customers. So our whole approach to both services and partners and our solutions is quite different. You would know that from tracking the company for so many years. It's how do we enunciate that? How do we amplify that? And then how do we capitalize on that difference? That's what's going to determine how well we do in that space.

The customers and our partners, they want it. They have been needing it--and our ability to step into that and fulfill it--because our stuff works really well together, and it can work independently. That's the beauty of the Microsoft solution. And our competition can't always say that. It doesn't always work as I described. So that's something that we've got to leverage--what we do really well and how do we bring that together in the seamless environment for our customers and our partners.

What's your major concern? What keeps you awake at night when you think about Microsoft?
Turner: The only thing I think about when I go to bed and when I get up in the morning is people. Do we have enough skilled, trained qualified people, and are we equipping them to take care of our customers and our products? I see my job as twofold. One, make sure we take care of our people. Two, make sure we take care of our customers and partners. And if I had to add a third, it would be, don't get confused about what my job is. Just take care of our people and take care of customers and our partners, and those are the things I try to stay grounded on.