Some things never change

As dramatic as the recently announced Microsoft reorganization is I think it likely that many core aspects of the company’s culture remain.  In particular, while the centralization of product marketing should give it more coherence and top-level strategy influence the center of product power in the company remains the heads of its engineering units.

The Engineering EVPs will retain the primary ownership of Strategy for their segment.  They also retain the Program Management function, which amongst other things, owns Product Requirements, driving release definition, and coordinating amongst the various teams and groups within and across organizations.  Ownership of Product Requirements by Program Management, as opposed to by Product Management, is one of the distinguishing characteristics of Microsoft that sets it apart from many other companies.

From an operating standpoint I doubt the engineering groups at Microsoft will feel much difference with the new structure.  Keep in mind that historically, with short periods of exception, product marketing has not reported to the leader of individual products.  It has primarily been centralized at the level of divisional Senior Vice President or higher who owned several products.  Go back to the 90s and structurally it would have looked much as it did a few weeks ago where marketing for an entire business unit reported to the President.  There was perhaps 1 year in the last 20 where SQL Server Marketing reported to the head of SQL Server, as an example.  The rest of the time it reported to the head of Developer Division (when that was a top-level division that SQL Server was part of), or Server Application Division, or Server and Tools Business, or whatever other “bigger” structure my brain has forgotten the name of.  So the majority of Microsoft executives, including the GMs and CVPs, are used to not having direct control of their own marketing teams.

What is different now is that Product Marketing has its own seat at the table in Senior Leadership Team (if they still call it that) discussions.  And Tami has the opportunity to eliminate many of the business-oriented seams between products that drive customers absolutely nuts.  She can also focus efforts on cross-product business strategies, such as the BI example I described in an earlier post, to help force the different engineering groups to bring a coherent solution to market.  Marketing’s influence, both politically and operationally, goes up.  But this is not a fundamental shift away from an engineering-driven culture to a marketing-driven culture.

To give you a concrete example of a place where this reorg could help let me focus on one of my efforts at Microsoft.  I was tasked, at the behest of two SLT members, with shepherding a technology that both were huge fans of.  Besides my personal involvement I eventually had an engineering team with about 100 people working in the technology space.  Unfortunately the revenue, and thus the primary marketing responsibility, accrued to a third SLT member who did not consider the technology a priority.  So while marketing from all sides participated in virtual team efforts to create a plan, when it came time to execute that plan no resources were made available.  The marketing team supporting my organization couldn’t devote the resources for something that yielded them no revenue.  The marketing team for the organization that did accrue the revenue had been handed marching orders that precluded them allocating resources to it.  Attempts to force the issue eventually ran into the limits of the organizational structure then in place.  100+ engineers, 0 marketing.  We ended up with engineers handling some of the non-optional marketing duties, but otherwise the effort just did not receive the attention called for.

In the new structure Tami becomes the eventual arbitrator of the situation I lived through.  She doesn’t get to say “that’s the other marketing group’s problem”.  Instead she can decide which group, independent of revenue allocation, should assign resources.  And if she decides that the effort should not have marketing support, then she can also be the voice at the SLT saying “why are you wasting 100 people on something that is not important to the business”?

Does this mean that all will be perfect?  No.  It is still entirely possible that engineering will want to invest 100 people in something that is strategically important even if it has little short-term business impact and thus little marketing support.  What it means is that the odds of rational decision making and clarity of decisions goes way up.  And there is someone, beyond Steve of course, who gets to take the view “what is best for Microsoft’s customers/business” rather than “what is best for my product’s customers/business”.

There are many other dynamics that keep Microsoft an engineering-driven culture, most of which I won’t dive into here.  But just for one example, engineering teams hire for long-term subject area expertise.  For college hires the SQL Server team, for example, targets graduates of the schools with top database programs like UW Madison.  And it seeks out people with decades of database experience working for competitors.  And then it retains them in the database, or at least broader storage, discipline often for their entire career.  Senior engineers and engineering management from every significant database player have been part of the SQL Server organization.  The recently hired head of SQL Server development arrived with decades of database experience at DEC, Sybase, and SAP.  Meanwhile over the last two decades Microsoft has never hired a career database marketing person to head SQL Server marketing.  That’s not to say they haven’t hired good marketing people, just that they don’t generally have the subject matter expertise (or longevity in role) to have long-term strategic product impact.

If you wanted my biggest concern about the new marketing structure I think I just revealed it.  If marketing people were considered fungible and not tied to specific products in any long-term way before, then being in an organization without ties to a specific product area will only enhance that situation.   Marketing at Microsoft just took a giant step towards better coherence of business and marketing strategy, but perhaps also a significant further step away from being able to influence individual product strategy or details.  All models are flawed, some models are useful….



This entry was posted in Microsoft and tagged , . Bookmark the permalink.

16 Responses to Some things never change

  1. what’s the argument in favour of marketing being able to influence product decisions? that they know what features are easy to market?

    • halberenson says:

      Well, they have more customer contact and more field contact so they should have more insight into what is driving customer buying behavior and satisfaction. They should, for example, be viewing competitive loss reports and determining what has to change in the product (as well as pricing, licensing, messaging, sales approach, etc.) in order to increase success rates. They should be helping to prioritize what the engineers want to do versus customer and market priorities. They should be able to look at a feature and say “the solution you are proposing will be hard to explain to the user and hard to justify to the CIO”. They should be able to say things like, unless that is multi-platform no one will care. They do these things, but not convincingly. I knew more about Oracle than the entire marketing team, though I did train one generation of marketing in how Oracle markets and sells its products. And as soon as they knew it, and were getting to understand what to do about it better than I could, the team was broken up and its senior leaders sent off to run other unrelated marketing teams or centralized activities. And almost an entire new generation had to start from scratch on figuring out how to compete in databases.

      • Eagle Jackson says:

        Do you think that marketing will be more able to have such influence in the new functional org, or when marketing reports to the divisional manager? In the former case, the marketing person for, say, SQL Server, now reports up in the hierarchy ultimately to Tami Reller, who has marketing responsibility for the entire portfolio of Microsoft products, from XBox Live to the systems management console for webscale datacenters. In the latter case, the marketing person reports up to the person responsible for building Microsoft’s enterprise products.

      • halberenson says:

        And I should add, similar things happened with the Forefront business. Similar things happened with Windows. This is not SQL Server-specific.

        • Abdullah says:

          Thank you for the insightful article. I always enjoying reading your blog.

          Regarding the last problem you mentioned about the marketing team being broken up, I’m interested to know if you think the new structure would help in solving this problem or would make it worse instead.

        • Bob - Former DECie says:

          That sounds like a problem that needs to be fixed. Or is it more of a case of marketing people getting bored with a particular product and wanting to move onto something different?

          • halberenson says:

            It’s a different view of competencies. The competencies of marketing leaders is not their product knowledge, it is their pricing, packaging, licensing, field engagement, marketing programs, press and analyst engagement, etc. abilities. People come on to a product marketing team because the challenge is to apply their growing set of competencies to that product. Their next step is not to become a better product expert, it is to go to the next level by applying their competencies to ever more challenging problems which often are on other products. My DEC Rdb Product Manager from 1988 is still doing database product management and marketing (at other companies obviously), the marketing person spent most of her career in databases, and their boss, the head of Database Marketing and Product Management, went on to run all of Oracle’s systems software engineering (and currently runs Oracle Services). They are database lifers. This would not be the career path at Microsoft (although Doug Leland left SQL Server around 1999 but returned three years ago when Forefront marketing was blown apart).

      • not entirely sure – no disrespect to product marketing – that that belongs with marketing rather than engineering/product management. shouldn’t dev know what drives customer satisfaction and whether a feature will be hard for a user or CIO to understand? Agree completely that marketing needs expertise in what it’s marketing though ;-)

        • halberenson says:

          Product Management is part of marketing. You can split those functions, but they arent split. And yes Engineering should know IMHO, but that isnt always encouraged.

        • jeffg says:

          academically ‘product management’ and those expertise mentioned above are and were taught in my business classes but not in my engineering classes. However, it is irrelevant if person that does this has a marketing tittle or org alignment what is important is that it is someone very knowledgeable in the area.

      • e.g. (and yes, of course, caveat lector) “Our engineers have shifted their attention from the perspective of “does this feature work?” to “will this scenario delight our customers?”” David Cross on the Windows Server R2/SC/Intune wave development.

  2. Bob - Former DECie says:

    Who is the new head of SQL Server development and how do you see him/her impacting the direction of SQL Server?

Comments are closed.