Microsoft Canada President Long on Business Innovation
It’s quite awe-inspiring to reflect on just how rapidly products and services innovation is accelerating within our lifetime. Take music, for example. Our grandparents and parents (depending on your age) listened to hits of the day on 78 vinyl records, which were then replaced by 45s and 33s. That method was followed by an improved portable option called 8-track tapes, which were installed in most of the hot rods young teenagers and 20-somethings were driving during the 1970s. Then it was a transition to smaller cassette tapes – and millions of automobile retrofits – before that technology too got shunted aside in favour of the sleek digital CDs. Today, we have MP3 players and the like, all computerized.
We can look back in much the same nostalgic manner regarding computers. In the 1960s and 1970s IBM mainframes were the norm for large business operations. It really wasn’t until the 1990s when computers became commonplace for most office environments, partly due to technology and largely due to cost. At home, the 1980s brought us the likes of the Commodore 64 and the Tandy TRS 80 (and yet more cassette tapes for data storage). All that led to the streamlined PC, which has since evolved into laptops, tablets and smartphones with hardware and software capabilities that might have been viewed as unimaginable less than two decades ago. Innovation is the development of new values through solutions that meet new requirements – and those requirements are changing on a constant basis for both commercial and personal usage.
Now that we’ve briefly gone down memory road, it’s back to the present and the need for businesses to stay on top of the all-important innovation curve. When it comes to technology, no company knows it more than Microsoft, a leader in global software products and services for more than 30 years. Microsoft co-founders Bill Gates and Paul Allen decided to enter into the operating system (OS) business in 1980 with its own version of UNIX, called Xenix but it was MS-DOS that solidified the company’s dominance for decades to come prior to the advent of Windows.
Max Long is president of Microsoft Canada and is someone who has a very clear vision for what his company needs to do in order to remain successful. Long was a keynote speaker recently at the Toronto Region Board of Trade, discussing this very concept to a large business audience. Following his address, The Canadian Business Journal had an opportunity to speak one-on-one with Long.
Born and raised in an area just outside London, England, Long – a Chelsea soccer fan – served as a key senior executive under CEO Steve Ballmer at Microsoft’s international headquarters in Redmond, Wash. in the northwestern U.S. in the role of Vice President of Worldwide Corporate Accounts. Prior to Microsoft, Long was a senior level employee with IBM. When the opportunity to head up operations here in Canada presented itself, Long moved across the border with his wife and two children and headed east to Toronto where they now call home. He’s been with Microsoft for 15 years and helped to shape the company’s sales, partner and marketing strategies and is known within the industry for seeking out the most efficient ways to serve both customers and partners while emboldening enterprises to make the moves necessary in order to survive in what has become a very, very competitive world. In fact, Long enjoys some spirited athletic competition away from work, partaking in such athletic endeavours as triathlons and snowboarding events.
Long and his team are primarily focused on customer satisfaction, realizing their community and business-based objectives through the technologies and solutions that Microsoft builds for both commercial and personal use. Microsoft’s stakeholder community now extends well beyond the business community and also contributes to the lives and growth of individual communities and public support systems.
Here in Canada, Microsoft teamed up with Rogers Communications last fall to launch Windows 8 and Windows Phone 8. With those releases, Microsoft has opened up a new world of mobility experiences in a secure manner for their business, retail and public sector customers.
“It’s been great being here in Canada for the last nine months,” Long says. “I had the opportunity to come to Canada and was enthused by the opportunity because it’s a great country with a great reputation around the world.”
Quite often we hear business people talking about innovation. However, verbalizing it and executing it are two entirely different animals. Due to its enormous impact on business, innovation is a massively important topic in the study of business economics, design, engineering, entrepreneurship, sociology and technology, to name a few of the most notable ones.
“Frankly, most of us talk about innovation in different ways and we don’t really have an agreed term for what it means,” Long remarks.
He was then able to draw parallels between innovation for Microsoft and innovation for Canada.
“It’s been an amazing year so far for myself and the company,” Long offers. “It’s been a rollercoaster ride. On Oct. 25 I had the opportunity to go down to New York and we did a global launch for Windows 8. It was a long time coming for us having put a lot of effort and passion into it. That continues to be the case in terms of momentum in the market.”
Long and executives from Rogers were together making a joint announcement about a broad-ranging partnership that goes well beyond the reach of a mobile device from a phone perspective to tablet and PC as well.
There are currently 29 retail stores in the U.S. and one here in Canada – in Toronto’s large Yorkdale Shopping Centre just south of Hwy 401. Long sees it as the first of many such stores he wants to see across the country.
“It’s great to bring employment but also for us to show what we can do from left to right in terms of innovation from a consumer perspective in one place with our partners,” he states.
The Microsoft boss shared an interesting, amusing tale about the grand opening of that landmark first retail store in Canada.
“I got the opportunity to introduce Wayne Gretzky who was doing the store opening for us,” he recalls with a smile. “Being British and having spent the last eight years in the U.S. I’m afraid, I have to admit this, I’m not that up to speed on hockey. So when I was asked to do the introduction of Wayne Gretzky, I had to wrack my brain thinking ‘what am I going to say’? ‘How am I going to introduce this guy’? because I know nothing about hockey and I’ve got to look somewhat credible. So instead I said, ‘for me Wayne Gretzky is a bit like the David Beckham of hockey’ and he (Gretzky) was a really good sport and played along with that. I talked about him being a great asset to the sport, being someone everyone looked up to who went above and beyond his sport in community activities and had a glamorous wife.”
As computer programs continue to progress to the point where they are now virtually lifelike, computer gaming has become a fast-growing recreational hobby and activity for people of all ages. In fact, most surveys indicate the average age of gamers is somewhere between 35 and 37 with about 58 per cent being male, 42 per cent female.
As computer and video games have increased in popularity, they’ve had a significant influence on pop culture. With the advent of Cloud Gaming, high-performance games can now be played from low-end systems and even TVs without much trouble. With broadband Internet there is now the ability to not only challenge the game itself, but others as well on a global stage. It’s an area that Long and Microsoft believe will continue to transcend through the years as more technologies and programs are invented.
“It’s a phenomenon we’ve seen over the past few years,” Long notes. “People are saying casual gaming is becoming more and more important. Just to put it into perspective Halo 4, in the first 24 hours, we sold $220 million.”
Compare that figure to global film launches, it becomes immediately evident the magnitude of the scope of sales. If you’re not familiar with it, Halo 4 is a first-person shooter video game developed by 343 Industries and published by Microsoft for Xbox.
2013 and Beyond
At the end of January, Long was involved in another landmark occasion with the introduction of the new version of Microsoft Office – online, in the cloud and on the PC, as with previous releases. The business launch for Office took place last month.
Microsoft has also innovated on a new form factor in terms of personal computing with something called Surface Pro, which is essentially a laptop in tablet form.
The reviews trying to describe it are someone amusing as Long relates.
“The reviews have struggled to categorize it since it came out,” Long notes. “Some are saying, well, it’s like a tablet but it’s not a tablet; others are saying it’s like a PC but it’s not a PC because it’s a tablet. It’s been really interesting watching as the reviewers try and go through and position it.”
“We are excited about being innovative in this segment of the market,” Long remarks. “People want to have the benefits of our tablet but can also have all their Windows applications, they can have a keyboard, they can have a USB port and they can have something they can create content on as well as consume content.”
What was it that drew Long’s interest in joining Microsoft?
“When I joined the organization all those years ago I came in from IBM where I’d been for nine and a half years,” Long reveals. “I looked around the market was thinking where I wanted to work next. At the time Microsoft was coming forward with something called NT 4 which was this new network operating system in a server environment. It was innovative and exciting. But it was this consumer company that was started to produce something that was great for business.
Over the years the company has grown from that consumer-based focus to now also providing products and services to enterprise customers and it remains a focal point of Microsoft’s core business today.
Here in Canada we went into the global economic downturn later than just about every other country in the developed world and we’re coming out of it quicker than most other countries around the world.
“I was lucky to go to a conference recently where we were talking about the Pacific Rim,” Long says. “There was a real split in the audience. Some saw it as an opportunity to accelerate and be the future. For so long we looked south of the border because we’ve got strong relationships with the U.S. – which is great – but let’s look at the options outside of that. Let’s look to the EU, let’s look to the Pacific Rim as it continues growing. Others sat back and thought, oh, this is competition. This is a threat to my organization. I was thinking about how both Canada and Microsoft embrace innovation and create it as well.”
Long says the corporate philosophy as far as he’s concerned is that innovation means something that will precipitate change for the better, as opposed to change for the sake of change. It needs to make people’s lives better and their work life better.
“When we went through that economic downturn a few years ago, it was serious for all of us,” Long reflects. “For us and a lot of our business partners around the world it was a difficult time. In the first six months of the fiscal year things were going well to the next six months when things became challenging; it was tough. The one thing we didn’t do during that time was reduce our research and development budget because we knew when were to come out of this downturn we wanted to be stronger than we were when we went into it. We knew the way to do that was to continue to invest in research and development. Annually, we’re still spending $9.5 billion on research and development.”
The trick of course is to continue to invest in the future while being able to responsibly pay the bills of today and ensure a solid rate of return for stockholders.
Some companies in dire straits took the approach of invoking salary cuts across the board. This happened for several years in a row, but rarely yielded overall improvements in the position of any given enterprise. Such tactics stifle innovation and most often just manage to slow the deterioration but not solve it.
“While they wanted to reduce costs, they were just reducing everyone’s costs equitably,” Long emphasizes. It wasn’t a strategy for being globally competitive; it was a strategy for just reducing cost.”
Other companies went beyond the threshold of giving salary cuts across the board. Some essentially just stopped any and all innovative practices and just kept the bare essentials running while other things were stopped dead in their tracks.
“All the innovation now at Microsoft is because we kept our focus,” he continues. “Given the financial strength in the market, we here in Canada have the opportunity to really get ahead of the competition globally. Let’s not think how we can grow by 10 per cent, but rather 50 per cent and how do we get there.
That’s what I’d drive from innovation.”
Microsoft has also worked closely with Toronto’s Hospital for Sick Children. As a leader in children’s healthcare, Long noted something very interesting about visitors to the hospital’s website.
“They weren’t just looking for what hours it was open for visitors and where to park your car, but were coming on because they know Sick Kids is a leading authority. Tell me about children’s medicine and healthcare and things that are going to inform me as a parent about how I can look after my children better.
We worked very closely with them in providing that customer interfacing side in their market and then taking it internally and take innovation to their own internal users to have a place where they can store the information and share all that great knowledge they have within their company.”
“When I first started in Microsoft 15 years ago I’d go and see companies and we’d talk about email systems and they’d say, yeah it’s nice to have but it’s not necessarily business critical,” Long chuckles. “Things have changed a little bit since then haven’t they?”
One of the companies Long and his team have helped is Tim Horton’s, who are now on a new email system providing better workflow across the organization in taking them to the cloud. Another company Microsoft has worked closely with is PCL, Canada’s largest construction firm. Construction is an industry that has been around forever. But as Long states, for an enterprise to thrive and grow, it’s not just about being great in delivering a construction project, it’s about taking it to the next level, because there are lots of competitors here in Canada and around the world.
“I love the way they (PCL) said let’s use this new technology, not because it’s a nice technology to have in Windows 8 and it provides us with tablets and mobility like we’ve never had before but let’s think about how it can actually differentiate us from our competitors and make our employees more productive than they’ve ever been before. How we can get to a point where we’re not focused on running the IT infrastructure just as a cost centre but rather as an innovation centre.”
Market Driven Innovation
Demand for information has changed in both its technical abilities and importance over the past 10 to 15 years. It wasn’t that long ago when all we had were land lines for telephone and Internet communication. There was a time when the only way to contact someone was to hope you got them at their desk, because voicemail was another luxury that really only became common towards the end of the 1990s for many companies.
Now, information is available to virtually everyone instantaneously. Everyone wants to be connected all the time. It means there’s an opportunity for business. But it needs to be real information as opposed to just noise. It must be relevant for the customers of an enterprise.
Secondly, and more recently we’ve come into cloud computing. It’s only going to get bigger and more prominent with enterprise as more become familiar with its varied benefits. When many people hear about cloud computing, they seem to be left in a fog, uncertain as to what it really refers to in layman’s terms.
Long had a good analogy on what it means.
“Back in 19th century Britain people were building factories; it was innovative,” he says. “They had to create their own power source – a water wheel or a steam engine. If I said today for most organizations that they’d have to provide their own diesel turbine or engine in their house to drive their electricity we’d all laugh. We just rely on the electricity company; turn on the switch and my electricity is there. Think of cloud like that for business and consumers. Computing information and applications are just there.”
There’s no need to concern ourselves with having a large data centre within an organization. While running a data centre has its benefits, it quite likely isn’t going to differentiate you from your competitors. What differentiates companies are the specific applications and knowledge that drive on top of that data centre. It’s largely about running your infrastructure at a much lower cost while retaining security and performance.
Long tells us that companies such as Microsoft are always on the lookout for top quality college and university graduates from various sectors. Although technology is the backbone of its operations, the need for marketing and sales experts as well as many other areas is what makes the company grow.
“We look at the innovation that’s being driven out of the colleges here Canada and see that the education system is fantastic,” he says. “The talent that we’re able to attract into Microsoft is superb. The economy is in a good state at the moment and there’s ability for us to build on top of that.”
“You can’t stand still,” Long says candidly. “We’re not managing today’s business and keeping it the same for 20 years because that’s a recipe for slow but certain death. In Canadian terms, how do we make sure we go to where the puck is going to be, rather than where it’s been.”
Some final advice from Long: Take on big, bold goals. Aim high. Even if you fall slightly short of the projected goal there’s still a very good chance you’ll exceed the conservative approach of a much lower expectation on growth. Taking calculated risks is imperative in order to grow.