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Trials, tribulations and the new Tampa office

By DAVE GUSSOW

© St. Petersburg Times, published January 4, 1999


TAMPA -- Sure, Microsoft has made some mistakes with its software. The antitrust lawsuit against the software giant is "unfortunate." And, yes, even a company as powerful as Microsoft has to scramble to adapt to changing market conditions in high tech.

So says Jeff Raikes, who as Microsoft's group vice president for sales and support reports directly to Microsoft chairman Bill Gates.

Raikes is more at home talking about changes in the high-tech world and customer needs than the antitrust suit. But he spent some time on a recent visit to Tampa answering questions about Microsoft's past, present and future, including the opening of a district office in Tampa to serve Florida, Alabama and Mississippi.

Here are some highlights:

THE ANTITRUST SUIT: Raikes is not closely involved in the case in which the Justice Department and 19 states accuse the Redmond, Wash., company of using its dominance in the high-tech industry to intimidate rivals and customers. He deferred comment on specifics to other company officials. But he was asked if the company had looked back to consider whether it could have handled things better:

"I think it's unfortunate that there is a trial at all," Raikes said. "I think, if anything, you kind of ask yourself, if we had done a better job of explaining our industry and the competitive environment or if you could have come up and explained how quickly the industry can change itself, as we've just seen with the (America Online)-Netscape-Sun alliance, or merger-plus-alliance, would there have been a better understanding that wouldn't have led to this trial? Perhaps. I don't know. It's tough sometimes to play Monday-morning quarterback."

THE AOL-NETSCAPE-SUN DEAL: Raikes says the deal, in which AOL will buy Netscape for $4.2-billion, reflects the changing dynamics of the high-tech marketplace and the Internet, including the effort by a number of companies to set up portals to attract visitors and businesses.

"The coming together of AOL and Netscape is really quite a formidable portal strategy," Raikes said. "The support of Sun Microsystems is obviously a good technology company. It brings together some very significant elements. And so, while some would say, "Wow, that's a great thing for Microsoft' because of the whole potential impact of the (Department of Justice), frankly I view it as a very significant step by some key competitors of Microsoft. And I think we really have to focus on it in that context."

Raikes acknowledged Microsoft's problems in coming up with its own portal strategy, including its MSN online service, where the company has tried a number of approaches to attract users. "We're not the only company that has had to shift or evolve," he said.

MICROSOFT INNOVATION: Critics have suggested that Microsoft simply takes others' ideas and makes its own version, rather than being a true innovator. But Raikes says Microsoft has been innovative, from the way it set up its technology in the early 1980s to introducing a graphical interface for spreadsheets to bundling applications in its Office program suite.

"I think ultimately what really matters is what you do to satisfy customer needs," Raikes said. "I believe part of it is innovation both in technology as well as in business model. And I believe a part of it is watching closely what your customers respond to about competitive approaches and what should you learn from that."

SOFTWARE GLITCHES: Gates got hissed in Orlando in October when he said that the inability of Microsoft Word 7.0 to handle documents from older versions of the software was easily fixed with a download. Raikes says the company, including Gates, recognizes that the Word 7 issue "was a particularly painful one." He also said glitches are part of a complicated, evolving process.

"I think there's no lack of understanding that there are things we've made mistakes on that we have to improve upon," Raikes said. As an example, he talked about the work on Windows 2000, and the use of 200,000 test users to try to avoid problems when it is released.

"Will there be zero problems with Windows 2000 or any other new release of software? No," Raikes said. "But what we've got to do is to do our best to make sure that we minimize the chances of those problems being disruptive for our customers."

EASE OF USE: As the home PC market has grown, there has been progress, Raikes says, to make computers simpler to understand. But more work needs to be done. To that end, Raikes says, Microsoft has an initiative called Simplicity, which includes features such as voice-recognition and sight-recognition.

"Those are some things that I think will help because it'll be a more natural way for people to interact with computers than it is today," Raikes said.

COST OF SOFTWARE: Though the cost of PC hardware is decreasing, software prices are not. Raikes says software is getting cheaper, too, if you include all the advances and functions that are included. Does that mean Internet Explorer, touted as free, really isn't? No, Raikes says.

"Just think about the operating system seven years ago and the things you would have to integrate in compared to today," Raikes said. "It's not only the cost of the software; it's the amount of hours you'd have to spend in product support."

THE DISTRICT OFFICE: Raikes expects Florida to provide the bulk of the work for the Tampa district office, headed by general manager Sandra McCarthy. McCarthy has been with Microsoft for more than seven years, previously serving as general manager of sales and consulting for Microsoft's New England district. Its function will be to work with and to provide support for customers and business partners. The Gulf States district office is on the Courtney Campbell Parkway, has 70 employees split between Tampa and Fort Lauderdale and has revenues of $230-million.

"We had a presence here before, but we didn't have as much presence, as much focus, so that's really the key difference," Raikes said. "What we're always trying to do is make sure we have the appropriate focus. Sandy has been with Microsoft for some time but the opportunity to have her leadership here helps us to make sure we do a good job covering Florida, Alabama and Mississippi."

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