My Decade at Directions on Microsoft

I started at Directions on Microsoft on October 11, 2000.  I came from CNET in San Francisco, and was already getting the idea from conversations around town that Microsoft was still considered a big deal in Seattle. Dot-com Internet Silicon whatever. That was California. In Seattle, Microsoft was where the all the best and brightest worked, had worked, or wanted to work. People even pronounced it with a particular tone of voice, hushed but aweful, like people back East say “Harvard.” All-caps. “Yeah, he owns a coffee shop now. But he used to work at MICROSOFT.”

I didn’t want to work there. I’m not a programmer. But writing about Microsoft? That sounded interesting. For a couple years, at least.

About two weeks after I started, one of Directions’ cofounders, Jeff Parker, forwarded me a nasty e-mail from a mid-level Microsoft manager. He worked for Rick Belluzzo, the brief-lived COO and head of the company’s consumer business units, and he thought that an article I’d written about Microsoft’s consumer strategy was completely wrong. “Would you mind driving to campus and meeting with him?” Jeff wanted to know. “Maybe he can explain what Microsoft’s consumer strategy actually is.”

I didn’t know it at the time, but this guy (who still works there at a significantly higher pay grade) was known as a hothead. “A yeller,” one of my colleagues later called him, recalling an incident at an airport counter when they worked at Microsoft together.

I walked right into the shitstorm: an hour-long lecture in which he told me that not only was I ignorant about Microsoft and its consumer strategy, but that our monthly newsletter Update was organized in a stupid way. In particular, we weren’t devoting a section to all of the company’s consumer products, a disjointed array that included MSN, bCentral for small businesses, the recently announced Xbox game console, packaged consumer software like Encarta, and Windows. In other words, his group wasn’t prominent enough. He asked who our sponsor was. (Sponsor? Like AA?) He threatened to say bad things to that person.

“Wow,” I said. “So perhaps you could tell me what I got wrong and explain what your consumer strategy actually is.”

“Another time. That’s not what this meeting is about.” The harangue continued.

I listened sheepishly, drove back to the office, and told Jeff what I’d encountered. He laughed: “That’s the Microsoft arrogance. But you don’t have to sit there and listen to it.”

“But he made it sound like he could hurt the company.”

“Don’t worry about it.”

A year later, Belluzzo was gone, this gentleman had moved to a new role in a completely different part of the company, and the conversation was forgotten. Ten years later, Microsoft still can’t explain its consumer strategy.

The incident stuck with me not only for what it suggested about Microsoft and some of the folks who worked there. It also showed me that a lot of people didn’t understand the relationship between Directions, a tiny analyst firm with less than a dozen full-time employees, and the monster over the hill in Redmond.

Directions on Microsoft is not Microsoft. Microsoft doesn’t own any part of Directions. Microsoft doesn’t commission or approve any of our research. But the name confused people. The “yeller” wasn’t alone: a lot of Microsoft employees who rely on Directions to find out what’s going on outside their cubbyholes often thought we were part of Microsoft or answered to the company. Strangers hearing about my job assumed I worked for Microsoft. Confused callers would ring the office to ask for Microsoft tech support, then get angry when we couldn’t answer their questions about how to install a printer. The press gradually got the idea that we weren’t part of Microsoft, but only after we came up with a capsule description: “an independent IT analyst firm devoted exclusively to Microsoft technology and business strategy.” We repeated it every time a reporter asked how we wanted to be described.

Remember Kremlinologists? That’s what Directions on Microsoft is. Only about Microsoft. (One or our analysts, Michael Cherry, had a regular gag in which he Photoshopped Microsoft executives’ heads onto old shots of the Soviet leaders on the grandstand of the May Day parade, highlighting the fact that Microsoft’s organization often seemed to change as randomly and capriciously as the Soviet leadership.)

Luckily for Directions, Microsoft is confoundingly complicated, often misunderstood, and always changing. This gave us plenty to do, and created plenty of demand for our services. It also created some lively conversations. Our biweekly meetings were part McLaughlin Group, part Talmudic recitations of acronyms and software licensing rules, part running skit with regular references to Doctor Strangelove (our research director, Rob Helm, does a mean Peter Sellers imitation in both German and French accents) and Monty Python. We often debated filming and v-casting our meetings, except then we would have had to self-censor and they wouldn’t have been as fun. (Or useful.)

The folks at Directions are some of the smartest, quickest, funniest people I’ve ever met, and I’m going to miss working with them.

I’ve seen a lot of changes at Microsoft as well. The old arrogance is mostly gone, although it lives on in pockets. One tends to be humbled after ten years of antitrust litigation, product stumbles, and losing markets that you saw first (smartphones, tablet PCs, and even search; go back and read Bill Gates’s Internet Tidal Wave memo from 1995 and look at point number 5 for the Windows group). The company has more than doubled in size. The complaints about bureaucracy and endless meetings have become so common, they’re no longer noteworthy. Gates barely checks in these days. “Bet the company” initiatives like .NET, HailStorm, Microsoft Business Solutions, and online advertising have passed into the memory banks. It’s not even the biggest tech company in the world anymore by market cap, although it’s still the most profitable.

Don’t get me wrong: Microsoft is still relevant. Hundreds of millions of Windows PCs still sell every year.  Its innovations are often underrated–Xbox Live was a social network back in 2002 (they oughta make a movie) and Windows Phone 7 is a surprisingly fresh take on smartphones. (Will it sell? Don’t know.) Occasionally the company still hits a single, if not a home run. Cloud computing could present a tremendous opportunity, if the company executes. Lots of brilliant, interesting, and honest people still work there.

But it’s not MICROSOFT anymore. It’s just Microsoft. Even in Seattle.

I’ll continue covering Microsoft and exploring all these issues in my new job as West Coast Editor for Silicon Alley Insider, which starts on Monday, ten years to the day after I started at Directions. But I’m also going to be writing about a lot of other companies and products, and heading back to the great tech melting pot of Northern California. I can’t wait.