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Microsoft says it's off to a Fast start

A year after the company first bid for the Norwegian enterprise search company, Microsoft says it has made considerable progress, an accounting scandal notwithstanding.

A year ago, the ink was just drying on Microsoft's $1.2 billion offer to buy Norway's Fast Search and Transfer. On Tuesday, Microsoft will unveil its first set of joint products.

"We couldn't really be happier about the progress," said Microsoft veteran Kirk Koenigsbauer, who serves as general manager for the Fast unit. Not only has the technical work been completed to bring the two companies' products together, Koenigsbauer said, but the December quarter was a blowout for sales of Fast's existing products, which help businesses search their documents.

"Fast itself had best quarter it has ever had," Koenigsbauer said.

That doesn't mean it's all been smooth sailing since the acquisition was completed in late April.

In October, officials in Norway raided Fast's offices as part of an accounting probe. Last month, following Microsoft's own investigation of the accounting scandal, John Lervik, the former CEO of Fast, stepped down from his position as corporate vice president of the Microsoft Enterprise Search Group.

"A thorough review of the past financial practices that led to a restatement of Fast's 2006 & 2007 earnings has been undertaken to help ensure that such problems are not encountered again," Microsoft said in a statement. "With the conclusion of this process, John Lervik has chosen to resign from Microsoft's Fast subsidiary."

Kirk Koenigsbauer

Koenigsbauer said that Microsoft knew about the past accounting problems when it decided to buy Fast.

"We certainly went in eyes wide open," he said, adding that "we certainly don't have any regrets at all on the purchase of Fast."

The team is now led by two people, Koenigsbauer, who leads the business side, and Bjorn Olstad, the former CTO of Fast who now holds the title of Microsoft Distinguished Engineer and heads the technical team for enterprise search.

In a joint interview this week, Koenigsbauer and Olstad said that, accounting scandal notwithstanding, the integration of Fast within Microsoft has been remarkably smooth. Koenigsbauer noted that both teams "like to work hard and play hard."

Olstad said that every two weeks he takes a short plane ride to Copenhagen and then takes an 11-hour flight from there to Seattle. "It's mountains and it's fjords and it's raining," he said of the Seattle area. "It looks like Norway."

Bjorn Olstad

With its development team split among Oslo, Norway, Redmond, Wash., and Needham, Mass., Microsoft relies on a lot of conference calls. "Someone is up very, very late or very early," Koenigsbauer said. The benefit, he said, is that work is going on a round the clock. The downside is that the morning sometimes brings bad news on a project.

"You go to bed at night and you think you've got it done, and the next morning there is a whole pile of e-mail (with) issues," he said.

But all of those conference calls have paid off, Microsoft says.

On Tuesday, Microsoft is announcing two new products at its Fastforward '09 customer conference in Las Vegas. One product is essentially a revamp of Fast's core enterprise search product. The other puts Fast's search technology on top of Microsoft's SharePoint portal software.

Linking Fast's search product with SharePoint is a key, says Forrester analyst Leslie Owens.

"Going forward, as Fast search is bundled with a big investment in SharePoint, it ensures that search will be a critical component of an enterprise deployment, rather than an afterthought," Owens said. "I think it makes it hard for independent search vendors to sell into a company that has made a commitment to SharePoint for enterprise content management and collaboration."

SharePoint's explosive growth has also, in its own way, helped spur demand for Fast's technology.

"SharePoint is like kudzu in the enterprise--it spreads out faster than some IT departments anticipate," Owens said. "So a great search engine is critical to getting a handle on a SharePoint implementation."