Departing exec discusses life at Microsoft

Last week, Microsoft Corp. announced that Rick Belluzzo is resigning as president and COO, effective May 1, as part of a broader reorganization of the company into seven business units. The announcement came just two and a half years after the former Hewlett-Packard Co. executive and Silicon Graphics Inc. CEO joined Microsoft and 14 months after he was appointed to the president/COO post.

Yesterday, in a telephone interview with Computerworld, Belluzzo talked about what it was like to be an outsider sharing the executive suite with Steve Ballmer and Bill Gates.

Q: When did it first hit you that you wouldn’t be working for Microsoft for as long as you might have expected when you were recruited?

A: I took the president’s job in February last year, and the biggest thing I concluded was we needed to structure the business differently to be able to scale the business. And it probably was the November time frame that we all realized that things needed to change based on the structure we were pursuing, and it probably wasn’t until the February-March time frame that it was reasonably clear that the right answer was to move to this new model and for me to pursue something else. This was mainly a process between [CEO] Steve [Ballmer] and me.

Q: You’ve said that Ballmer’s being a hands-on guy in the sense of being integrally involved in all aspects of the business wasn’t a “deal breaker” for you. Was there a deal breaker?

A: There was obviously a point when we all realized things needed to change, and it came down to the point that we needed to have these seven business owners having a fairly end-to-end kind of view of running their business. You need someone to manage those, and that person probably should be the CEO. So I could have redefined my role, but I didn’t want to redefine my role in a way that was too narrow, because I like running a business.

Q: There’s been a lot written about how your management style has sort of clashed with Ballmer’s, but what has your relationship with Gates been like?

A: Let me first respond to the clashing thing. I think that’s been overemphasized. Microsoft is a culture where you have to put your ideas on the table, defend them and debate them in discussions. That’s the nature of the culture, so I wouldn’t draw any conclusions about the fact that people have those kinds of discussions.

My relationship with Bill is a very good relationship. Bill is very passionate about this company, passionate about products. He’s always there to help you clear your thinking about a particular issue or challenge, and I found that that was a really positive part of working with Bill.

Q: You’re in an interesting position in that you watched Microsoft from the outside for years, and then saw it from the inside at the highest levels. What has that been like? A: It wasn’t as big of a change as you would think. Yes, I did work with Microsoft on the outside and on the inside, and probably the biggest benefit I brought was the ability to help people on the outside understand the inside. One of the ways I added a lot of value was to help establish partnerships and customer relationships, because I was on the other side. So, I was in some ways able to help translate and express the partner and customer view within Microsoft, and the opposite as well.

Q: Having that vantage point, did you become aware of business practices that you personally disagreed with from an anticompetitive standpoint? A: No. I would only do things and build on things that I really believed in, and I don’t really feel like I [became aware of] anything that I felt was wrong.

Q: How about steps that Microsoft might have taken to assuage the criticism — say, delivering a version of Office for Linux. Did you lobby for anything along those lines?

A: I don’t know if lobby is the right word. We would always have discussions about our strategy and our policy and how things could change. And since I came from a different world, it would not be uncommon for me to express a view that was a bit nontraditional. That’s why you hire people from the outside.

Q: Can you elaborate a little on what the Linux discussions were like?

A: We talk about Linux all the time. We talk about mostly the fact that we need to build and deliver a better value proposition [with] Windows-based products. Dealing with Linux is obviously a challenging and interesting thing. It’s something that’s top-of-mind that we think about and discuss frequently.

Q: Do you personally believe that Microsoft should deliver a version of Office on Linux?

A: No, I don’t. I think a lot of the cross-platform things sound really attractive and interesting, but in reality, it’s very hard to make that cross-platform business model, that overall price/performance model, work well.

Q: How would you describe the effect that the antitrust case has had on Microsoft?

A: It’s been an interesting process. I’ve been amazed at how the company has continued to deliver during this really challenging time from a legal perspective. If you look at the last 18 months, we’ve probably had our best, most productive time of delivering new products, with Windows XP and Office XP and software for handheld devices and new versions of MSN and Xbox and our server products — it’s been a phenomenal time. And all that’s in the time when we’ve been dealing with this legal challenge. So as a company, it was an important priority to be able to separate the legal challenge from our day-to-day work of delivering products and running a business, and I think that process has been well-managed.

Q: Are you satisfied that Microsoft has done everything that could reasonably be expected to avoid the security holes and vulnerabilities that keep cropping up in its software?

A: We certainly are today; we could go back and second-guess the past. Today, the whole security initiative around the company where we’re applying energy and resources to this is really unprecedented. There’s no doubt that we’ve had our share of issues, and we’re not pleased with that. It’s definitely an area where we do not feel like we’ve done enough in the past, and we’re doing more now.

Q: If you had to name one change you wish you could have made at the company but haven’t been able to, what would it be?

A: I’m sure I would have liked to have made more progress on some of our consumer businesses. This last couple of years has been a good time in terms of making MSN a real leadership network and introducing some new device products. Our consumer business several years ago was really not as completely defined as it is today — we’ve made a lot of progress in those businesses. But the dot-com meltdown has made it increasingly difficult to deliver the kind of performance and the kind of financial results that we need to.

I wish we could have made more progress on delivering a subscription model or a revenue stream to our services business. That’s still on the agenda, that’s still something we need to do, but I wish we would have made more progress than we’ve made.

Q: Can you envision yourself working for any company in a position other than CEO?

A: I’m keeping my mind rather open. I definitely want to be a CEO. I want to do it because I want to build a business, I want to build a team, and I love products. There’s nothing as enjoyable to me than to build a business and being accountable for those results. Can you do that in other jobs besides CEO? Possibly — I felt that way in the past. So I’m open-minded, but my thinking today is that a CEO position is what would meet my needs.

Q: As a former HPer, what’s your view of the merger with Compaq Computer Corp.?

A: I think it’s difficult. It’s easy to be on the outside and to critique it. But I think a merger like that is very, very hard. I think it will be very challenging. It’s too early to tell whether the direction is something that will make a difference for the companies and the customers they serve. I think that will be very clear over the next year as to whether, in fact, the combination of those two companies can create a strong enterprise player in the industry. I think it would be good for the industry if that could occur, but I think it’s very hard to execute on something like this.

Q: Presumably you’re still an HP shareholder, right?

A: Yes.

Q: Did you vote for the merger?

A: My vote is private. I can’t comment on that.

Q: You’ve stated that you would be open to the possibility of going back to HP. Have you been approached at all by HP?

A: No.

Q: Can you envision yourself working for HP in a position other than CEO?

A: Probably not. Again, I’m open to anything, but I can’t imagine that.