Q&A with Microsoft’s New Chief Information Officer, Ron Markezich

REDMOND, Wash., June 17, 2004 — Ron Markezich was named CIO of Microsoft earlier this spring by Rick Devenuti, corporate vice president of world-wide services and former CIO.

An All American distance runner in his college days, Markezich graduated from the University of Notre Dame with a degree in management information systems. Before coming to Microsoft in 1998, Markezich spent more than nine years at Accenture (formerly Andersen Consulting) in the Electronics & High Technology group, focusing on improving his clients’ business operations through the use of technology.

That experience carried over to his first position at Microsoft, as general manager of Finance and Administration IT, where he worked to develop, maintain and support the systems for the Microsoft Finance, HR and Corporate Services groups. While in that role, Markezich’s team received the CFO Magazine “Best in Finance” award, as well as Treasury & Risk Management’s “Alexander Hamilton” award for technology.

Now, as CIO, Markezich leads the Microsoft Information Technology group (Microsoft IT), and is responsible for delivering the company’s worldwide internal technology infrastructure, corporate information and internal systems. As the “Markezich Era” hits full stride, PressPass catches up with the new CIO to find out the state of IT at Microsoft.

PressPass: You’ve got some big shoes to fill as Microsoft’s CIO. How will you keep the organization moving forward?

Ron Markezich, Microsoft Chief Information Officer.

Markezich: If you look at the past four years, Microsoft IT has been instrumental in the improvements made to the company’s products and how they support businesses. I want us to take advantage of this tremendous opportunity to use technology to radically improve end-to-end processes at Microsoft. A couple of products are coming out shortly that are going to help us do that, notably Microsoft Visual Studio.NET 2005 and Microsoft SQL Server 2005. By deploying this next wave of products internally as we’ve done so successfully in the past, we think we can take IT and drive even more efficiency, effectiveness, better decision-making and customer satisfaction.

PressPass: While we’re on the subject, can you talk about the strategy and benefits behind Microsoft’s early adoption of its own products?

Markezich: Our first priority in the IT organization is to be Microsoft’s first and best customer. We do this to help our product teams develop the best products they can for our customers. Microsoft IT agrees to “shared goals” with the product groups, and a product cannot ship until those shared goals are met. This includes running the product internally to support the business. No matter how well the product runs in our test labs, until you put the whole company on it, where you trust it to run in your own environment, you really don’t see all of the issues, and you really haven’t tested it.

On top of that, we get value out of these products very early, and aggressively deploy them throughout the enterprise to drive up availability, increase service levels, add new services and decrease costs, while at the same time creating a more secure environment. To give you an idea of the scale, we have 300,000 machines on our network. We’ have 7 million remote connections per month. It’s very difficult to duplicate that type of environment in a lab, so we turn our corporate infrastructure into a very large lab to test our products. I like that because it makes our products better and I get to take advantage of new capabilities in our products very early.

PressPass: What major benefits have you seen from this approach?

Markezich: There have been many, but our infrastructure and messaging environment are recent examples. We deployed Microsoft Exchange Server 2003, Microsoft Office System 2003, Microsoft Windows Server 2003 and SMS (Microsoft Systems Management Server) 2003 across our enterprise starting in November 2002. We call this our 2003 wave of products. These products have changed the way we do IT at Microsoft. We have been able to increase service levels, add new services and decrease costs all at the same time.

Because of the 2003 wave of products, we were able to consolidate sites with Exchange servers from 73 down to seven, increase messaging availability from 99.9 percent to 99.99 percent and double our mailbox storage limit. We eliminated 30 percent of our infrastructure server. We added new collaboration services, document protection services, mobile messaging and Internet-based services. We are also on track to lower our IT-infrastructure spend by more than 25 percent.

In addition to these benefits we received in IT, we were able to help our product teams ship a great suite of products by ensuring they ran with high availability in our large, complex environment.

PressPass: What do you see as the major strengths of Microsoft’s IT organization?

Markezich: The major strengths of this organization are the passion and dedication of the people. Our people are very passionate about getting value out of Microsoft products. It’s amazing the type of value we can find and the ways that we use our products to really drive a competitive advantage. It’s also an organization that’s dedicated and passionate about our customers, and so we work hard to share the value we are able to achieve externally. We do this through various means — showcase white papers, live webcasts and trade articles in magazines.

This is also a very dedicated group of people. When you set big, bold goals in front of the people in this organization, they will deliver. The thing I need to ensure is that they always have big bold goals, because they will always deliver on those commitments.

PressPass: What are some opportunities that Microsoft IT will be working on in the near future?

Markezich: We have some key products being shipped soon, including Microsoft SQL Server 2005 and Microsoft Visual Studio 2005. We will use these products to change the way in which we do application development, business intelligence and data management, much like the 2003 wave of products changed the way we run our infrastructure. So we will continue to use technology as a strategic asset to help drive customer satisfaction, better connect with customers and radically improve our internal business processes.

We also have been more and more engaged with our customers, to the extent that we’ve recently built an “Exchange Center of Excellence,” where we have members of our Services and IT teams helping some of our Exchange customers run a high availability messaging environment. Additionally, we are working on some capabilities with our product teams around “Longhorn” that I am very excited about. The “Longhorn” release will build nicely on top of the 2003-wave benefits that we achieved.

PressPass: On the other side of the coin, what are some of the challenges facing Microsoft IT?

Markezich: It’s amazing when I talk to customers, whether they be government, small business, or even companies larger than ourselves, I don’t think the challenges we’re facing are that much different than what our customers are dealing with. Being a technology company, however, we have an insatiable demand for the use of technology inside Microsoft. As a result, one challenge is that we have far more requests for applications than we are able to invest in. We need to be very good at keeping up with that demand internally, and the way we’ll do that is by defining some core principles and processes through which we assess investments, prioritize needs and allocate resources.

Also, as I mentioned, we have received great benefits from our 2003 wave of products and we’re understandably very eager to share our experiences with customers, to allow them to get the same value. We have a number of mechanisms in place to make that happen. As important as that is, however, I need to make sure we don’t get too distracted from continuing to drive up our service-level agreements and delighting the users of our services.

PressPass: What is different about becoming a CIO now as opposed to five years ago?

Markezich: If you looked at a CIO during the “bubble,” circa 1998–2000, there was not always enough discretion given to where IT money was being spent. People felt like they were going to be left behind because of this big technology boom. Money was getting thrown at IT left and right and there wasn’t much control or a framework around how that money was going to be spent. Then the bubble burst, and the opposite happened. Money was taken away from IT and there wasn’t always much discretion as to where the money was taken away.

I think we are now in the third phase where companies, Microsoft included, are very willing to invest in IT, as long as there is the appropriate return on that investment. So what you’re going to see now is a wave of IT investment that is thoughtful, measured, and adheres to a framework so that companies are sure they are getting appropriate value out of that investment. Value can come from allowing a company to enter new markets, create new products, drive revenue, drive customer satisfaction, or just cut down on the overall cost of the business. This is the healthiest phase of the cycle.

PressPass: What will you do to put your own stamp on Microsoft IT?

Markezich: I will remain committed to being Microsoft’s first and best customer. At the same time, I will look to drive significant business process improvements through the use of technology and help our customers understand how Microsoft gains significant benefits from IT. As a CIO and a member of the broader CIO community, I am looking to share Microsoft’s best practices and approaches, to try to do my part in helping to enhance the entire industry. The opportunities for IT as a strategic asset for businesses have never been greater. I think CIOs, myself included, need to be bold in ensuring IT realizes its potential for our companies.

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