Microsoft's culture under siege - Part 1

With the final gavel about to come down in Washington later this spring, insiders and analysts say Microsoft's antitrust trial will indelibly change the company's corporate culture.

Some of the changes are already apparent, ranging from semantic differences in the way the company's presenters hawk their products at trade shows to the way Microsoft's employees use electronic mail. And more changes are around the bend, with a planned reorganisation that some observers say was partially ordered to pre-empt any doomsday penalty should Microsoft lose in court.

Whether these changes are anything more than cosmetic difference in Microsoft's outside behaviour remains to be seen. Some are sceptical. "Has the trial changed Microsoft's culture? Maybe in terms of outward appearances, but it will take quite a while for the arrogance of Microsoft to be impacted by its legal goings on," said Bryan Sparks, CEO of Caldera Inc., which is embroiled in its own antitrust suit against Microsoft.

Nonetheless, evidence suggests change has occurred on the company's Redmond, Washington campus, none more apparent than in the way the company uses electronic mail. Microsoft epitomises e-mail culture, where electronic conversations become the preferred way to communicate. In the company's fast-paced corporate culture, e-mail is where policies get thrashed out without requiring face-to-face meetings.

But the risk of e-mail has been well-documented by the ongoing antitrust case, where the government scored points by introducing into evidence embarrassing e-mails that portrayed Microsoft in the worst light possible. Company executives argue that their internal e-mail communications represent nothing more than an unedited dialectic that's part and parcel of the daily intellectual give-and-take.

While Microsoft hasn't officially changed its e-mail guidelines, insiders say the trial has had a spillover effect. "Nowadays, when you mail a senior exec, people are more likely to say, 'let's set up a meeting and discuss this,' " said one Microsoft middle manager, who asked not to be named. "I'm not sure how that change came about, but it's something that's taking place." The same goes with Microsoft's communications with some of its largest business partners. "I haven't gotten any e-mails from anyone at Microsoft in quite some time," Gateway CEO Ted Waitt said during an e-mail interview.

A senior executive at another large PC maker concurred. "In all the years that I've done business with Microsoft, 90 percent of my communications have been over the Internet," said the exec, who asked to remain unidentified. "Instead, I've received a lot of phone calls from them."

Other industry executives also report their opposite numbers at Microsoft are increasingly wont to pick up the phone rather than shoot off notes via the Internet. Indeed, taking stock of the recent events in Washington, company insiders say Microsoft has good reason to be more circumspect about what gets put in e-mail. One manager even described some colleagues as being "sort of shell-shocked" at how Microsoft's lawyers have fared in court, suggesting that it may force lasting changes in business communications at Microsoft.

Of course, none of this should be taken to suggest the birth of a kinder, gentler Microsoft. Industry executives and competitors say the software maker remains as tenacious as ever. "They haven't changed," said a senior official at a computer maker, referring to Microsoft's brass with a barnyard epithet. "They're still the same [expletive deleted.]" After sitting through a long and arduous negotiation with Microsoft last month, this executive said he had not seen any 'fundamental' change.

"The process was just horrible," said the executive, who asked to remain unidentified. "Remember, you're seeing a culture that's been in the making for many, many years. For there to be a change, they've got to go to un-brainwashing school."

Others point out that with the natural influx of newer, younger hires, the memory of Microsoft's current e-mail embarrassment may eventually fade. "You're in an environment where there's no hierarchy, where you can send e-mail to [company president Steve] Ballmer and he sends it back to you," said Rick Segal, a former Microsoft developer who spent six years there before leaving in 1997. "The warm fuzzies that sends to you are an elixir. And if the memo sent to the top is anything coherent, they'll all read it."

"There's an awful lot of hallway conversations," he continued. "And because there are so many new people and so much going on, I think that after a few weeks they may fall back to old trends, with people sending around dumb things" in e-mail.

Indeed, down in the trenches, Microsofties shrug it all off as a minor distraction. They say they've been so busy trying to keep up with frantic product timetables that the trial news is a blip on the evening news and no more than that. As one Microsoft source put it, "the rest of the campus could be annihilated by a neutron bomb and we wouldn't know." Added this developer, "It's not a purposeful thing, but we've got a product launch to think about. Even if we were inclined to worry about the trial, there's no time to."

part 2

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