Microsoft folds its Interoperability Strategy team into new subsidiary

Microsoft folds its Interoperability Strategy team into new subsidiary

Summary: Microsoft has created a new wholly owned subsidiary that will focus on working with the open-source community.


Microsoft is moving its Interoperability Strategy team into a new, wholly-owned subsidiary, the company announced on April 12.

The new group, known as Microsoft Open Technologies Inc., will be headed by Jean Paoli, who is currently the general manager of the team. It will be comprised of about 50 to 75 full-time and part-time employees and contractors. A board consisting of Microsoft managers from other business units will oversee the new entity.

Paoli said in a blog post on the Microsoft Port 25 blog that the idea behind the creation of the new subsidiary is to facilitate Microsoft's relationships with the open-source community and developers. He said the new structure will make it easier and faster for Microsoft to iterate and participate in grass-roots efforts and work with the community.

At the same time, Paoli emphasized that individual teams at Microsoft will continue to work with open-source vendors and developers; Microsoft Open Technologies won't be the only conduit for Microsoft's relationship with the open-source world or with groups like the Outercurve Foundation (the former Microsoft Codeplex Foundation unit) and the Apache Software Foundation.

From Paoli's blog post:

"The (Open Technologies) subsidiary provides a new way of engaging in a more clearly defined manner. This new structure will help facilitate the interaction between Microsoft’s proprietary development processes and the company’s open innovation efforts and relationships with open source and open standards communities."

A Microsoft spokesperson said that this is not a first or an unusual arrangement and that Microsoft has many wholly owned subsidiaries. (I'm trying to come up with a few to offer as examples. Anyone?) Update: It seems some of Microsoft's acquisitions, like Great Plains, Sybari Software and PlaceWare, at least at some point in their history, also have been wholly-owned Microsoft subsidiaries.)

What do you think of this latest move by Microsoft? Any additional thoughts/guesses as to why it might be advantageous for the Redmondians to make its Interoperability team a separate entity?

Update No. 2: A few folks have weighed in with thoughts on why the Softies might have gone the wholly owned subsidiary route with this.

IDC analyst Al Hilwa noted that many companies organize parts of their operations as subsidiaries. "A classic example is geographic operations of larger companies.Microsoft does that with its sales organization for example. The benefit of a subsidiary structure is providing a level of isolation, autonomy and legal protection. In this case, it is likely about engaging more and faster with open source, potentially with less extensive legal review of every action," he said.

Topics: Open Source, CXO, Microsoft


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • RE: Microsoft folds its Interoperability Strategy team into new subsidiary

    [i]A board consisting of Microsoft managers from other business units will oversee the new entity.[/i]

    Why not include individuals from the open-source community on the board? Constituting a minority of course. There's plenty of open-source projects to choose from.

    P.S. Google's Eric Schmidt probably wouldn't be a good pick. ;)
    Rabid Howler Monkey
  • Smart move I would say

    kidding, anyway, I believe this good step for Microsoft, but I think the Open Source Community will be forever suspicious of Microsoft (personally I would say 'who cares'). Microsoft is a business first and foremost, but company's customers are very different from 10 - 15 years ago, they have mixed environments, they use smartphones (Android, iOS), Tablets, Web services more now. This course built up on open technologies. So, Microsoft is doing the right thing by engaging and understanding this community and I believe it will ultimately make the company more competitive and understanding of customer needs.

    BTW, he's rocking the pink sweater ;)
    • Never say never

      You are right to characterize the open source community as suspicious of Microsoft. But I think there is a lot of misunderstanding around Microsoft's involvement in, contribution to, and attitude toward open source. It's my opinion that as these increase, the community will thaw a bit.

      To that end, I think Microsoft will remain a profit-oriented company.

      What's their angle? Microsoft doesn't want to leverage open software. I think that is one misunderstanding. Microsoft wants to enable it. There is nothing different from an open solution and a custom, internal solution running on Windows, using SQL server, leveraging ADFS, etc.

      Let me give you an example. If you run DotNetNuke you'll run it on Windows. Even without profit from DotNetNuke, Microsoft sees their advantage - and DotNetNuke is the winner.

      Let's say you want to run Drupal and work in a Microsoft shop. You may not be able to convince your CTO to install Linux. But, if you know Drupal is supported on Windows and SQL you have real options.

      Now, this doesn't mean we are forcing a developers hand. If you think MySQL is really better (for whatever reason) then you can use it. The message here is that SQL is standing by, ready, proven, and fully supported.

      We aren't in the world (how many years ago?) where every desktop is going to be replaced with Linux. The rise and fall of threatening trends are what they are. Windows, Office, and Microsoft Servers are proven and command the enterprise. Supporting open software lets everyone win. Plus, it showcases how good Windows is - countering kneejerk misconceptions about it.

      I'm not stupid. LAMP is what it is. And there will always be purists. I love purists; I am a purist. But when that need is there, when we need to cross the streams (so to speak), we can. Microsoft is targeting //this/ message for the open community. It's really cooperation over confrontation - enabling whatever software developer's love on the desktop, the server, over the web, on the phone, and in the cloud.

      I would say this is a smart move, too.
      • Thanks.

        Nice objective commentary.
  • Interoperability Strategy team?

    Shouldn't that be "Interoperability Prevention Strategy team?" Or is this the newspeak thing again?