Gayle Laakmann is one of the bright young computer programmers whose work may change the world, and Microsoft saw her coming. For three summers, Microsoft...

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Gayle Laakmann is one of the bright young computer programmers whose work may change the world, and Microsoft saw her coming.


For three summers, Microsoft flew her from the University of Pennsylvania to Redmond for internships. She even wrote code that’s part of the company’s programming toolkit.


Last fall, she represented the company as Microsoft’s lead student ambassador at the Ivy League school, and she started an annual contest for projects on Microsoft’s .Net software platform.


Naturally, the company offered her a job after she graduated in May with simultaneous bachelor’s and master’s degrees in computer science.


But don’t look for Laakmann among the 17,000 employees gathering today at Safeco Field for the company’s 30th anniversary company meeting.


That’s because Laakmann, 22, went to work at Google instead, starting last month at the red-hot Internet company’s year-old Kirkland office.



Microsoft by decades


Founded in 1975, Microsoft has grown to become the bellwether of the American technology industry over the past 30 years.


“I decided Google was a better fit, with the excitement and stuff like that,” she said yesterday from Philadelphia, where she was representing Google at a career fair at her alma mater.


The loss of potential stars like Laakmann is just one of the issues facing the company Bill Gates and Paul Allen started 30 years ago, challenges that emerge as it grows into its new skin as a maturing giant, searching for its next big hit, concerned that it’s not the center of attention at the big tech party anymore.


Microsoft has lost engineers during upticks in the industry, when new startups and hot competitors beckoned. But this time it has fewer cards in its hand.


It no longer offers stock options and the prospect of becoming a millionaire overnight. It’s also increasingly focused on business products that have less razzle-dazzle than consumer Internet services like Google.


Laakmann’s take, on a Web site where she provides advice to software-job candidates: “Microsoft is fun to work for, but some groups are doing stuff which is sort of boring and unimportant.”


Microsoft communications manager Larry Cohen contends the company is actually doing well with recruiting. He said it has gone through phases of competition for talent before, such as during the dot-com boom, but most candidates still accept its job offers.


“In fact, when we do decide to make an offer to people, the fact that over 90 percent of them choose to take it says a lot about how we’re doing in the marketplace,” he said.


Microsoft is also trying to recapture Wall Street’s interest and sustain employee morale. That’s partly why Chief Executive Steve Ballmer overhauled and streamlined the company’s management structure this week, trimming it from seven business groups to three.


Cohen defended Microsoft’s output, pointing to a string of upcoming products such as a new database, Xbox console and Visual Studio programming tools. Those advances will be highlighted by executives during today’s company meeting.


But some believe more radical changes are needed to restore the agility that helped Microsoft win its central position in the 1980s, vanquish its competitors in the 1990s and expand into the server, Internet and game-console markets in the past decade.


Slash work force


“I think they would be a better company if they fired half the employees,” said Michael Cusumano, a Massachusetts Institute of Technology professor who has written books on the management of Microsoft and other software companies.


Cusumano argues that Microsoft needs to reconsider its core strategy, which has been to protect the Windows franchise by adding more features and integrating new products with the operating system.


The result, he said, has been large staffs and a bloated product, causing delays that have pushed the new Windows Vista’s launch to late 2006.


“Windows might have 10 times as many people as they need,” Cusumano said. “I think out of panic they just hired thousands of people thinking that would give them an advantage in building more features or covering more technologies.


“The problem is it’s just created a much too big of an organization, much too difficult to manage, much too slow, so it’s not an organization.”


Some employee blogs also complain the company needs to cut layers of management and process, but other workers have a different view of the Microsoft zeitgeist.


Like Laakmann, Sandra Jacobson was looking for a small, exciting, up-and-coming company when she moved from General Electric to Microsoft in 1983. Now a 49-year-old senior program manager in the partner sales and marketing group, she’s the longest-serving woman employee.


“It’s a good company,” she said. “If I didn’t like it, I wouldn’t be here.”


Small feel survives


Jacobson said executives have tried to structure Microsoft in a way that preserves the feel of a small company within different groups. The native of Queens, N.Y., also believes the company still moves quickly, at least in her group supporting software reseller and integrators.


Challenges are inevitable between product cycles, and the next really big thing from Microsoft may be two years out, said analyst Richard Williams at Garban Institutional Equities in New York.


Williams thinks Microsoft is making wise investments in products that should carry the company beyond the PC and Internet search and into the next era of computing. He calls this next wave of products “Web channels.”


Web channels, or services, are sets of software-based products delivered via the Internet to businesses and homes.


Businesses may eventually subscribe to a package of services provided by a company like Microsoft. Similarly, homeowners are starting to pay phone or cable companies for bundles of Internet-delivered phone, broadband and television services.


As part of the reorganization, Ballmer assigned the company’s new hotshot executive, Chief Technical Officer Ray Ozzie, to develop service offerings throughout the company.


Williams said investors may have to be patient. “Our point of view is Microsoft is still a year or two away from having a Web-channel product ready,” he said.


“Until they get closer to that rollout, the company is at a lack for a growth driver. Vista will help, but it will be difficult for Vista to bring Microsoft back into the ranks of growth stocks.”


Meanwhile, Microsoft is tinkering with its development process to speed delivery and nourish entrepreneurial spirits. One approach is to foster more incubation projects, or small projects employees can start outside of the big product groups’ formal process.


The Tablet PC and Media Center PC grew from incubation projects, but they morphed into big, complicated initiatives, and the executives championing both quit shortly after they launched.


A new tack is apparent in Start.com, a Googlesque Web service that Microsoft’s MSN group quietly released Sept. 1. A group of five younger employees created and launched the service, which offers consumers a free, minimalist home page they can customize with news feeds, Web links and gadgets displaying traffic maps, weather reports and other information.


The group also took a nontraditional work approach. Instead of working in solitary offices and communicating by e-mail, they brought laptops to an open room and hacked and yakked together.


Not only were they building a cool product, they were trying to create a new, fast and fun way to get things done, said Sanaz Ahari, the 23-year-old product manager.


“It’s not just our project but the way we’re running,” she said. “If we can prove that we can be successful, then maybe we can set an example that the rest of Microsoft can follow.”


Ahari came to Microsoft last year from the University of Victoria in British Columbia. She considered working for Google and other companies, but her interest was piqued by a job at Microsoft’s MSN Music service.


Earlier this year, she again considered going to Google. But the idea of working on a new project and setting an example was more attractive.


“And, at Google, they wouldn’t tell me what I was going to work on. It kind of spoiled it for me,” she said.


Like many other Microsoft employees, Ahari uses a blog to candidly share her excitement about the project, appreciation of competing products from Google and concerns about Microsoft’s direction.


This week, she praised the reorganization but said Microsoft needs to slim down middle management and look at ways to be more efficient.


“We have over 61,000 employees, and only 8,000 of which are developers,” she wrote. “Doesn’t sound right, does it? Not to me anyways.”


Brier Dudley: 206-515-5687 or bdudley@seattletimes.com