Executive Q&A: Microsoft Announces Leadership Transition

REDMOND, Wash. – Nov. 17, 2005 – Microsoft today announced a leadership transition in which Doug Burgum, senior vice president, MBS business group, will assume the newly created role of chairman of Microsoft Business Solutions. In his new position, Burgum will continue to report to Jeff Raikes, president of the Microsoft Business Division.

Microsoft will launch a formal search for a new senior vice president of MBS. The new executive will also report directly to Raikes. Throughout the entire search and transition process, Burgum will continue to lead and drive the MBS business, and Orlando Ayala will remain chief operating officer of MBS and senior vice president of the Worldwide Small and Midmarket Solutions and Partners (SMS&P) group. The roles of the rest of the MBS senior leadership team will remain unchanged.

Doug Burgum. Click for high-res version.

To learn more about today’s announcement, the state of affairs in the business applications marketplace, and the future of the business group, PressPass spoke with Doug Burgum.

PressPass: Why look for a new leader now?

Burgum: Nearly five years ago, Microsoft entered the business applications category with the acquisition of Great Plains, followed by the acquisition of Navision 15 months later. As the MBS organization nears its five year anniversary, the business is set to continue on its path of accelerated momentum.

We are seeing the rewards of hard work in our YTD numbers – 16-percent overall growth, 18-percent increase in software revenue, and 21-percent growth in license revenue. Microsoft Dynamics, our unified brand for ERP and CRM, has a clear product roadmap. We have strong momentum with the best partner channel in the industry, increased positive field execution and our strongest, most innovative product pipeline ever. So, the business is showing incredible strength and momentum.

This is the right time to initiate a thoughtful and well planned leadership transition.

By beginning the search now, we can have the new leader on board and owning the planning process for FY07. Throughout the search and during the full transition process, I will continue to lead and drive the MBS business. I will also retain my full accountability for delivering on our FY 06 commitments and FY 06 financial results.

PressPass: What’s next for you?

Burgum: I’m looking forward to applying my energy and focus on areas that I am deeply passionate about including building thought leadership of Microsoft’s business software and software-based services with business decision makers broadly and working more with industry influencers, MBS prospects, customers, partners and ISVs throughout the world, including in markets where we have a limited presence today.

We have much work to do to evangelize the Microsoft vision for the value of role-based software design, software-based services for businesses, a world going “vertical” and the incredible power that is possible when solutions are developed that marry the two currently disparate software worlds of business processes (structured data) and personal productivity (unstructured data.)

PressPass: What’s the plan for replacing you?

Burgum: Jeff Raikes, Steve Ballmer and I are committed to finding the right leader for this important business. We are doing a full search internally and externally. I will continue to drive and lead MBS until the new leader arrives. At the foundation of what we are doing, we are all committed to a smooth and thoughtful change in leadership that will also strengthen the trust and confidence of our partners and our customers.

PressPass: What does this transition and your new role say about Microsoft’s commitment to business applications?

Burgum: Personally, I’ve never been more bullish on the future of business applications and the potential Microsoft Dynamics has to lead that future. And that commitment and enthusiasm is evident throughout the company. Microsoft Dynamics, the line of business applications that’s been built by the MBS team over the last several years, is at the start of a major release cycle. Microsoft Dynamics is of critical importance to Microsoft’s long-term growth strategy. In terms of demand, Microsoft is poised for growth in a marketplace that’s predicted to expand dramatically.

We have an incredible opportunity ahead. We’re making great progress toward our vision, and the customer and partner momentum for the business continues to grow. It is our ability to address the entire range of activities that workers do to drive business results that will enable us to continue to be a market leader in software and software-based services for businesses. The structured, role-based business solutions from MBS are a key element of the digital workstyle that people need to be successful in the constantly evolving workplace.

Bottom line is that Microsoft remains committed to business applications as core to its broad company strategy, and will continue to make the investments that are necessary for delivering breakthrough solutions to customers, growing our worldwide channel of expert partners and vertical solutions, and being a leader in the market.

PressPass: Are you pleased with Microsoft Business Solutions’ overall performance?

Burgum: We have very high aspirations for business applications. Against these aspirations we have been in investment mode for our initial five years. We have made substantial investments in new product categories (CRM), new segments (SBA) and new geographies as well as internal systems and operational infrastructure to better support and service our Partners and Customers. These investments are bearing fruit as evidenced by recent revenue growth and momentum around the new Microsoft Dynamics brand and Dynamics product releases.

From a current year standpoint, we are absolutely pleased. From an overall growth perspective, at US$181 million this quarter, Microsoft Business Solutions is up 16 percent compared to where we were last year. In terms of software revenue during the quarter, we are up 18 percent thanks to our solid, dynamic line of enterprise resource planning (ERP) and CRM solutions and services. License growth is up 21 percent and enhancement revenue has jumped by 16 percent compared to last year.

PressPass: While you’re remaining at Microsoft in a newly created role, is there a risk that a change at the leadership level will impact shipment of major products?

Burgum: No, not at all. There is a rock solid commitment to remaining fully focused on delivering against the strong and innovative product pipeline we’ve currently got in place. Specifically, Microsoft Dynamics CRM 3.0 is on track for general availability in December, Microsoft Dynamics GP 9.0 and Microsoft Dynamics SL 6.5 were made generally available this month and all other Microsoft Dynamics solutions are on track as currently scheduled. We’ve put a lot of energy and resources behind the current wave of releases, and in the next 12 to 18 months we’ll see many of those investments come to fruition in the form of some of the most innovative solutions to date.

PressPass: What impact will you moving to a new role have on partners?

Burgum: One of the key parts of my new role as chairman of MBS is to remain deeply invested in our partners’ success. We have one of the strongest partner channels in the industry, and we are deeply focused on how we serve and collaborate with that channel to provide today’s businesses with software and services that help them thrive.

PressPass: After nearly a quarter of a century working with some of the most successful technology companies, aren’t you ready to retire?

Burgum: Not by a long shot. I loved working with a great team to build Great Plains and its partner/customer centric culture, and I’ve been equally passionate about working at Microsoft, which is an amazing place. Every day at Microsoft we have the ability to truly change the world, or more specifically within MBS, an opportunity to change the way people work.

PressPass: You’ve done this for a long time — how does this feel personally?

Burgum: Essentially, I have been in the same role for 23 years, the first 18 with Great Plains and the last five as a senor vice president at Microsoft. I’d like to take this opportunity to say it remains an honor to serve in this role for so many years. A huge part of that is the chance I’ve had to work with so many innovative team members and dedicated business partners. In my role, my inspiration has always been strengthened and renewed by seeing the caring, commitment and courage of the people I’ve worked with over the years day after day.

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