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Home / Washington Business - April 2006 / Member Profile: Microsoft Charges Ahead |
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Member Profile: Microsoft Charges Ahead |
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Written On: April 2006 |
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Written By: by Ron Dalby |
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Most of us have probably gotten used to the big, ostensibly routine pronouncements from Redmond that Microsoft seems to make on an almost weekly basis. Thus we were probably only half listening last winter when a flurry of reports came out about a major expansion of its Redmond business campus. It would do us all well to listen more closely. Leaving aside the Alaskan Way Viaduct for the moment, this could well be the biggest construction project underway in Washington right now.
Just in terms of physical facilities alone, Microsoft plans to build seven new buildings and four new garages and to purchase seven other buildings previously occupied by Safeco, Eddie Bauer and State Farm Insurance. This flurry of construction activity and purchases pencils out to 3.1 million square feet of additional office space by 2009, or enough room for about 12,000 employees under typical occupancy patterns. Microsoft already occupies some 8 million square feet of office space in Redmond.
About half of Microsoft's network of 60,000 employees from around the world work in or near Redmond. The new buildings will provide much needed space for current and future employees in the Puget Sound region.
The Cost
Microsoft will spend somewhere around $1 billion to build and purchase the new facilities in Redmond.
"Our plans for the Redmond campus are integral to our overall vision for growth around the world," said Brad Smith, Microsoft's senior vice president and general counsel. Over the past several years we have added thousands of jobs worldwide. As we grow globally, we continue to expand locally.
"Last year, two-thirds of our total worldwide growth occurred here. This fiscal year we plan to add 4,000 to 5,000 employees worldwide of which around 40 percent will be in the United States, and of those a vast majority will be based in the Puget Sound region."
As part of its spending on new facilities, Microsoft also plans to commit about $35 million for local transportation and infrastructure improvements, to include an overpass for State Route 520, one of the major thoroughfares serving Seattle from the Eastside. "We will also add more campus entry points and make improvements to nearby surface streets," Smith said.
Speeding Up Growth
All of the work pending in the next three years represents a major acceleration in Microsoft's growth. Little more than a year ago — Jan. 10, 2005, to be exact — Microsoft described this growth as part of a 15- to 20-year plan and filed an agreement with the city of Redmond to that effect. While the agreement is still in force, more than half of the projected growth is scheduled occur in the next three years or so.
"In the software industry, things move quickly," Smith said. "The acceleration of our campus expansion shows our ability to match that pace as well as our long-term commitment to employees and the region.
"We are a company with bold goals for innovative and pioneering technology. This plan provides us the space for the current and future talent who will help us achieve those goals."
Redmond Mayor Rosemarie Ives enthusiastically supports the expansion plans. "Microsoft's decision to continue to invest in its world headquarters in Redmond is a vote of confidence in the city of Redmond and the state of Washington," she said. "It also underscores the need for the region and the state to continue to improve the transportation infrastructure in the 520 corridor to ensure a high quality of life for citizens who choose to live and work in east King County."
After a press conference on Feb. 9, a ceremony was held to kick off construction of the new buildings. Rob Short, corporate vice president of the Windows Core Technology Group, used heavy machinery to crack away at a portion of the first building to be demolished. Short won the right to participate in the demolition by donating $1,110 to a fund-raising drive for the United Way of King County.
Keeping Microsoft in Redmond
"We like it here," Smith said. "We have said from the beginning that Redmond is our home and we're going to be here for a long time. This is a very tangible example of our commitment to the region and an acknowledgement of efforts by our city, state and county governments to encourage this kind of growth and development for businesses in the Puget Sound Region."
Mayor Ives points out that Microsoft's growth in Redmond means more opportunities in the community as a whole. "As Microsoft has grown," she said, "more of its employees have chosen to reside in Redmond and get involved in community events. Microsoft's expansion also benefits Redmond by linking our future growth to a clean, environmentally safe industry that contributes to the employment base with good-paying jobs."
"We are very bullish about what we see in our business sector over the next few years," Smith said, "and confident about the growth of our company. We are poised to continue the innovations Microsoft has been known for since the company was founded more than 30 years ago."
New Products and Ideas
Looking even farther ahead, Microsoft is thinking beyond the bricks and mortar of the Redmond expansion. In March, CEO Steve Ballmer outlined the company’s vision for how people armed with the right software are the key to driving business success. Called "People-Ready," this vision for business is the backdrop for a series of innovative solutions in new and existing categories of software that Microsoft will bring to market over the next year.
"Twenty years ago this week," Ballmer said on March 16, "Microsoft — armed with our belief in the power of software to change the world — was listed as a publicly traded company. People-ready is a natural extension of our founding vision of empowering people through software. Today we take this to the next level by showing how these tools now work together in new ways to enhance innovation and drive greater value for business.
"Fueling our vision is a series of software solutions resulting from a $20 billion R&D investment over the past three years that is producing new innovation in a range of categories. The opportunity for software to deliver even greater customer value is limitless."
According to Microsoft's press office, a business that is people-ready gives its people software tools that enable them to collaborate and work together globally, to contract and serve customers instantly, and to streamline and reinvent processes intuitively. Included in this process is enhanced software to address consumer needs in the following categories:
• Unified communications and collaboration. The next release of the Microsoft Office system will extend desktop capabilities through new server technologies.
• Enterprise Search. Enterprise search technologies are moving beyond empowering people to create documents by enabling them to better manage the information they need to be successful.
• The mobile work force. Microsoft believes its comprehensive approach to mobility spans devices, software and networks and addresses the needs of business in a way that no point-solution provider can.
• Business intelligence. Previous BI software has been too complex, costly and disconnected from the software tools people use every day. Upcoming releases of popular programs such as Excel® will make it easier for non-technical users to access information.
• Customer relationship management. With the Microsoft Dynamics™ line of business management solutions, the company will unify the previously separate worlds of business process automation with the world of productivity.
• Infrastructure. A significant portion of Microsoft’s research and development over the past three years has gone into providing world-class, security-enhanced, and manageable software and server infrastructure to seamlessly support the new innovations coming later this year.
"Getting the most out of their people is on the mind of every business leader I speak with," Ballmer said. "Successful businesses understand that people drive business success and growth."
A People-Ready Business
Jeff Raikes, president of Microsoft's Business Division, describes a people-ready business as one where "...people are at the core of driving and achieving key business outcomes. The ultimate drivers of success are the people inside the organization. A people-ready business believes that if you empower the people inside an organization you empower the organization itself."
Raikes says Microsoft will invest $500 million in the next year to communicate this vision to its customers. He believes the people-ready vision helps Microsoft's customers understand how they can leverage the biggest asset they have — their people.
In a speech in New York City on March 16, CEO Ballmer called the people-ready idea "...perhaps the greatest innovation Microsoft has ever had in terms of bringing innovations to market." He then baited his audience by promising to bring a number of innovations to market in the next 12 months.
According to Ballmer, not all software manufacturers subscribe to the people-ready concept. He thinks, though, that it is a natural thing for Microsoft to believe in.
"Software," Ballmer said, "is an important part of enabling people in a people-ready business. [It] is the one tool that can really keep pace with people. It’s an investment that has the flexibility and capacity to adapt as your people increase their capability."
He goes on to point out that people may not now use all the capability of the software provided by their company, but as their skills and knowledge develop and increase, more and more of its capabilities will be explored and adapted to the business involved.
Ballmer firmly believes that a company's people are the primary drivers in its growth and that Microsoft's coming generation of software will enable those people to make the most of their working hours. "We think what businesses need to do, what you need to do, is empower the people in your company and you will empower the company," he said. "That's kind of the idea behind the way we think about the software innovations we're driving for a people-ready business, and it’s really quite that simple."
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