‘Our objective is not just to sell Office 2000 to be used for typical applications but to use it as a powerful KM tool’ – Bill Landefeld, Director, Global Marketing, Applications Product Management, Microsoft

-Bill Landefeld, Director, Global Marketing, Applications Product Management,
Microsoft.

From handling Microsoft’s properties to products,
Bill Landefeld, Director, Global Marketing, Applications Product Management, Microsoft,
has varied experience to his credit. Landefeld has been with Microsoft since 1990, when he
joined as International Real Estate Manager to manage Microsoft’s property operations
outside the US. Since then he has been working in its marketing services group in various
parts of the world.

Promoted to his current designation in July 1998, Landefeld is now responsible for
coordinating international marketing efforts for Microsoft’s desktop and server
applications. His team provides support and liaison to more than 50 Microsoft subsidiaries
worldwide and advises the product marketing teams at Corporate Headquarters on
international issues.
Recently in the country to explore increasing business opportunities in India, he
expressed his views on Office 2000 and the relevance of Knowledge Management in today’s
competitive business environment. Excerpts:

What is knowledge management?
Before I talk of knowledge management (KM), let me give a brief overview of a broader
concept called the digital nervous system (DNS). Around three and a half years ago,
Microsoft articulated the concept of DNS. It’s a concept wherein organizations or
government entities can use technology to be more effective and efficient in the way they
develop products, the way they react to customer requirements and the way they respond to
what’s happening in the business place. It is a concept about how companies can come
together almost as living organisms in order to survive and compete in an environment.

How does KM fit into the concept
of DNS?

Like DNS, we articulated another concept for knowledge workers and individual consumers
used to web work style- knowledge management. This fits into our concept of DNS. We see
three main scenarios in the overall scheme of DNS. One of the scenarios is KM and deals
with people in an organization. The second scenario is ecommerce, dealing with how a
company deals with its customers and its vendors in the web world. The last one, business
processes, deals with the internal processes and practices that a company has in place to
deal with a situation in an environment.

What is KM for Microsoft?
Broadly, KM is about how people within the organization work together to become more
effective and efficient in what they do. No doubt, in recent times KM has become a
buzzword in the business environment. Talk to five different consultants and you have five
different definitions of KM.

We, too, have had a piece of the definition cake and have the Microsoft version of KM.
When Microsoft talks of KM, it essentially looks at four components. These are business
planning and analysis, product development and feedback, customer management and
management, development and training of employees.

Can you elaborate on these
components of KM and how Microsoft has deployed them?
At Microsoft, we have internalized the various components of KM. For example in the
business planning and analysis area, we have an internal tool called MS Sales. This is our
master database with all the revenue information in the company. Via this tool and using
excel as the front end, any Microsoft employee can access the SQL database and do online
query. So I can run a query to find out the worldwide ‘Office Suite’ sales or in a
particular country. I can find out our ‘Office Suite’ sales in India by the retail and
direct channels.

In the product development and feedback area, we have several systems in use internally,
and the best example would be the product development group for Office 2000. As the Office
2000 is getting closer and closer to its launch date (around the second quarter of the
current calendar year), we have an elaborate system in place to allow the product group to
interact with the users and developers of other product groups like Windows 2000. This
allows us, on a recurring 24 hour basis, to document new product problems, who needs to
follow up on those, the most recent status on them, updating them and thus help to get the
product in top shape before the actual launch.

Regarding the third area of customer management, we are deploying an SQL-based sales force
automation system. This package allows us to have a very consistent view of customers,
worldwide. For example, a Microsoft account executive for a particular company will have a
lot of knowledge about the company like the key contact person, the decision makers, the
products used and other details dealt with Microsoft. Though it is very hard, once all the
information has been documented, it aids our efficiency process. Like, if the customer
calls in for the product support by whatever reasons, the person at the support center can
access the information for that particular account anywhere in the world, and serve the
customer better.

Finally in the employee development and training area of KM, we have couple of aspects to
it. One of the aspects is our office payroll mechanism in the US. Implemented recently, we
have put the employees payroll information on the company’s intranet, eliminating the
paper aspect. So, I can check my payroll details on our intranet from anywhere in the
world.

Isn’t documentation of
experiences very important to the success of KM?

Documenting experiences is a key part of KM. Any company must have a repository of
information so that the employees do not have to relearn experiences that have been
encountered or experienced earlier. Moreover, it should be in the system wherein others
can access it. So, even if a person leaves the company, others can use his experiences to
tackle similar situations.

How does Microsoft document its
experiences?

In Microsoft, a good example would be the above mentioned sales force automation project.
One of the applications used in the project, called MS Data, helps us to track information
about customers. On our web site, any person- employees or customers, anywhere in the
world, giving information about themselves, varied from giving profile of themselves to
talking about bugs in products to poor after sales service to any other information, is
well documented to be used by others. So we are documenting the experiences of our
employees and customers alike to improve our understanding of the market, products and the
customers.

How does Office 2000 fit into
your concept of KM?

We believe that Office 2000 integrates firmly with KM. Like I said earlier, KM is all
about how people within the organization work together to become more effective and
efficient in what they do and Office 2000 allows that. We feel that features like seamless
integration within application, efficient data tracking and analysis, web collaboration
will help to improve the productivity of an end user.

Microsoft has a tendency to
launch products, take feedback and then take corrective actions. Will Office 2000 be a
similar case?
This is not true. For all our products we have the beta program and this has been the
only way Microsoft makes its products. We believe that unless we do not involve customers
for product testing as in the beta stages, we cannot make good and robust products.
However, I do agree that prior to the Office 2000 and Windows 2000 exercise, the time lag
between the beta 1 program and the product launch used to be very close and we did not
have the wherewithal or the flexibility to incorporate the customer feedback. However,
since the last year, all our new products especially the Office 2000 suite and Windows
2000 have been at a stage where we have surpassed all the previous records in terms of the
time lags and numbers of customers using the beta code. We have done this for a few
reasons. Firstly, we found that it’s a very good way to involve the customers at large.
Secondly, we are giving ourselves enough time lag to introduce the product, take feedback
and incorporate the customer feedback.

Are you promising stable, robust
and bug free Microsoft products?

Yes, primarily because we now have the time flexibility between customer feedback via the
beta program and commercial launch of the product. Earlier the time difference between the
first beta and the commercial launch was around six months. Now, the time lag between beta
1 to final product, takes a minimum of around 11-12 months. Certain other products like
operating systems are taking* more than 15 months. For example, Windows 2000 has already
been through with nine months of beta testing and will continue for a minimum of another
six months. Similarly, the Office 2000 suite commenced the beta program in July 1998 and
its commercial launch is expected by the second quarter of this year. We feel that such a
time lag is important for the people to understand, test and use the product and also for
us to incorporate the changes such that there is no undue pressure on us to bring out the
product. The whole idea is that before the commercial version hits the market, it has gone
through the grind of being tested and felt by the customers. Naturally, this will help us
to bring more stable and robust products.

Let’s come to the product. Why
should a user switch from Office 97 or any other desktop suite to Office 2000?
Let me briefly explain how earlier versions of office or any other desktop suites were
developed relative to Office 2000. Prior to Office 2000, most of the suites followed the
feature upgrade path. Compare with other suites, find out what is missing and incorporate
them, and you have a new version. Also, surveys showed that the typical usage pattern of
desktop suites was more or less focused around word processing or spreadsheet
applications. We have discontinued the feature upgrade path for Office 2000. The Office
2000 is a product based on the customer feedback on Office 97 over the last few years.
Also, on a worldwide basis we solicited customer feedback on what they feel about the
desktop suites, how they are using it, need for new functionalities or other enhancements
to be made and what they wanted in a desktop suite. Based on the user feedback, we
realized that there are three key focus areas which need to be covered in Office 2000
namely web enabled collaboration, data tracking and analysis and ease of use and
maintenance.

What is the marketing strategy
for Office 2000?

Worldwide, we started the beta program around June. Pre-launch, our strategy hinges on
three aspects, the corporate preview program (CPP), consumer preview program (CoPP) and
the independent software vendors (ISVs). On a worldwide basis, we have around 22,000
customers and partners enrolled in the beta testing programs representing a ten-fold
increase relative to the previous early beta programs.

Under the corporate preview program, we have shortlisted number of companies, which will
deploy and test the product. For example, in India we have around 100 corporate in our CPP
for the beta 1 program and increase by 50% in the beta 2 program to 150 corporate. In
India, we have companies like IOCL, HPCL, Dabur, Infosys and other reputed corporate as
participants in our beta programs. Apart from the normal CPP, we have started the rapid
deployment strategy with a few select corporate. This aims at deploying Office 2000 in
beta stages across the enterprises. With such a scenario, on the launch of the commercial
version, we have some corporate who have already deployed it in a very serious way. Mind
you, these companies are not deploying Office 2000 as typical word processor or
spreadsheet application usage but as a powerful front-end tool to enhance their day-
to-day productivity.

Under the CoPP strategy, we have tied-up with most of our resellers or publications to
distribute a demo copy of Office 2000. Also, apart from the large consumer fairs, we are
organizing consumer events like ‘Microsoft home start’ or ‘Infotech Exposition’ to educate
and distribute Office 2000 demo copies.

The final facet of our pre-launch strategy is the ISVs nomination. We have started
engaging the ISV community with our beta customers to develop either customized
application or utilities/product around office 2000. We see this as a complete shift in
the marketing outlook for Office 2000. We have never done this exercise with the earlier
version of desktop applications as they were considered standalone products. This kind of
exercise was done with products like SQL or Exchange but never on desktop applications.
The ISV community is also delighted with the opportunity presented by Office 2000.
Primarily a volume game for them, it can impact their bottom line tremendously. For
example, the worldwide Office suite sales, over the last six months, have been in the
region of 10 million copies. Even a $10 application could mean a great opportunity.

Post launch, we would be identifying users according to the three focus areas catering and
segmenting the market accordingly. We will, of course, be using the existing channel
infrastructure and resources to promote the product. However, the challenge for office
2000 is not just to sell. We have been doing that very successfully with the earlier
versions of office suites. The challenge is to make sure that the customers deploy it in
one of the three key areas and get the crux out of the product. Our objective is not just
to sell Office 2000 to be used for typical applications like word processing or
spreadsheet, but to use it as a powerful KM tool.

One of our internal targets is to make sure that the usage penetration goes at close to
30-35%. Various surveys on applications of Office 97 have not been very encouraging for
us. We found that many users were using Office for just Word or Excel from a very
elementary perspective. Our challenge is to double the functionality usage from, say,
around 10-15 to around 30%.

What are the price points for
Office 2000?

In many countries, we have started Office 2000 Technology Guarantee, and in India for the
first time, implying investment protection. This means that if a user buys office 97 just
a few months before the launch of Office 2000, he gets a free upgrade of Office 2000 on
the commercial launch. For other users we will have the upgrade version available.
However, we don’t see much price differentiation for the Office 2000 standard,
professional suites from the current prices of Office 97. The new add on Office 2000
Premium will be at the high end retailing around $399 and inclusion of FrontPage2000 and
PhotoDraw2000 along with the other office products line up.

Office 2000 supports around 36
languages. When can we expect the Hindi version of the product?
Though, the Office 2000 Hindi version is currently in the beta 2 stage, we will not be
launching it in June 1999, the schedule month for India launch. We will have to wait for
the launch of Windows 2000, as the Hindi version needs it for compatibility of the unicode
support.

We are expecting the launch of windows 2000 in December and also hope to launch the Hindi
version of Office 2000 at the same time. This will be the first Indian language version
and we have a clear road map to roll into other Indian language versions of Office 2000.

How important is the Indian
market for Microsoft?

The Indian market is the largest market in South Asia. In Asia, India is the fourth
biggest market. We have a lot of expectation from the Indian market and so far it has not
disappointed us. The compounded annual growth rate for the Office Suite in the Indian
market over the last four years is around 38%, which reflects a healthy growing market.
The competitive scenario is different in different markets, but Office Suites market share
would be on worldwide basis over 70%. However, in India, according to IDC’s last survey in
April ’98, we have a revenue share of over 90% and unit share of over 70%.

Are you pre-empting any delay in
the launch and hence the name ‘Office 2000’ even when it is being launched in 1999?
At least for the Office 2000, we can give the guarantee that it is going to be
launched in the current calendar year and certainly not in 2000.

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