F E B R U A R Y  2 0 0 0 

SOMEHOW I had also assumed that the higher one moves up the technology pyramid, the more "virtual" the working experience becomes. Even journalism and publishing, no one's idea of technology pioneers, have been transformed in the past half-dozen years by e-mail (as they were earlier by the telegraph, the telephone, and the fax). Over the phone and by e-mail editors and writers often have very close working relationships for months on end without actually seeing each other. I could only imagine how much more disembodied the working style would be at a company whose very products are designed to let people work together with no more than electronic connections.

I was intrigued, therefore, to find that Microsoft relies as heavily on face-to-face contact as any organization I've ever seen. The culture is meeting-centric. To make a difference one must be at the headquarters, must come to the office, must sit through meetings. Microsoft has employees scattered around the globe, but nearly everyone whose job is to plan or develop software works within a mile of Bill Gates's office. (The exceptions are people developing foreign-language versions or working at certain subsidiary companies that Microsoft has bought but not moved to Redmond.) The basic units of the working day are collaborative meetings, scheduled in blocks of one or more hours, where people argue over what features to include in a program or how to get rid of certain bugs. Every employee has an office; every office has a whiteboard, on which people can write ideas or priority lists for others to see during a meeting. Much of the company's work occurs in planned or unplanned gatherings around a whiteboard. Between the meetings are hallway conversations or talks in the cafeteria, where nearly everyone eats nearly every day.

People do work on their own. The developers, who do the actual software coding, may hole up for days to work on certain features. The program managers, who are supposed to itemize the tricks the developers will make a program do, may also vanish, to finish program specifications. But it seemed as if the company was as dependent as a football team on having its members at the same place at the same time. Maybe this is because developing good software requires an unusual mixture of talents -- that, at least, is the explanation I often heard at Microsoft for its emphasis on face-to-face collaboration. Or maybe it suggests some skepticism about the extent to which workplaces will ever become virtual.

The planning process is radically "bottom-up" and surprisingly nonpolitical. I am sure that "Now hear this!" directives about the evolution of new software come periodically from Bill Gates, Steve Ballmer (the president of Microsoft), and the company's other strategists. In 1995 Gates famously ordered the company to reverse course and take the Internet seriously. Office 2000, which had been completed just as I got there, reflected a from-the-top emphasis on making all programs compatible with the Internet. But strategic documents never filtered down to my level. What I did see was a quite amazing process in which programs were decided on, shaped, revised, and implemented almost entirely by people at the working level, without the need for big shots to resolve arguments.

Part of my role was to argue that it would be good for customers, and therefore ultimately good for Microsoft, to build in certain features that would make Word or Outlook easier to use. In some organizations the most effective scheme of action might be: 1) persuade the boss that this feature is a good idea, and 2) have the boss tell someone to produce the feature. At Microsoft the process seems to be: 1) persuade your colleagues that a certain feature will be popular, and that it can be created, and 2) create it. If there is something you love or hate about Microsoft programs, don't thank or blame Bill Gates; some specific member of the Microsoft team decided to "own" that feature and include it in a program. There is even a person who created the "It looks like you're writing a letter" auto-annoyance feature in Word. I had to sign a separate confidentiality clause promising not to name him.

I didn't always, or even usually, agree with the list of features that survived this process. But I was struck by the dispassion and apparent lack of scheming that went into deliberations about what to include. This may have been in part because supervisors stayed away from the details of product planning -- there is no need to play the courtier if final decisions rest with your peers. But I think it also reflected a shared understanding that everyone was on the same team: the Microsoft Stock Option Team. If someone on the other side of the table had a better idea than yours for making the program attractive, you might as well give in gracefully, in view of the potentially stupendous rewards.

WHICH brings us to money. For the first week or two I was hit surprisingly hard by the realization that I was the poorest nonjanitorial worker in my building. (I was there as a temporary consultant; only long-term employees are eligible for stock options.) At some point I stopped thinking about it and tried to observe the way everyone else thought and talked about money. They talked about its consequences quite a lot. Standard lunch-table chat would concern the new boat or sports car someone had bought. And when Microsoft stock was moving up or down, there was a fair amount of hallway chatter about it. But on the fundamental questions -- How much do you have? How much do you need? -- people were taciturn. Everyone recognized the concept of having "enough" money to quit and do something else, as a large number of Microsoft veterans have done. But almost no one would specify how much would be enough.

Certain aspects of Microsoft culture reminded me of Japan. The company is self-contained and thinks of itself as separate from the rest of the industry. It cares about market share above all else. Its talent pool is remarkable at the low end for how competent the weakest person is. But more and more often I found myself thinking that Microsoft is like the military. I don't mean by this what the company's detractors presumably would: that it is a rampaging force bent on world domination. I mean that in many small aspects of daily life and in the large questions of long-term strategy the organization resembles a big, successful military establishment.

Once this idea got into my head, I couldn't stop seeing evidence for it. When on the job, people in the Army wear clothes saying U.S. Army. At least a third of the people in the Microsoft cafeteria wore shirts or jackets saying Microsoft. The military has a PX; Microsoft has the Company Store, where employees can buy Microsoft products at 70 to 80 percent off list price. For the mess hall there is the cafeteria. For the rec center there is a huge fitness club -- officially run by a different company, but nearly all the members are from Microsoft. A military base is full of vaguely insulting posters urging service people not to pass bad checks, not to get VD, not to have fatal accidents. Microsoft buildings are full of posters with messages like WRITE GREAT CODE! and YOU CAN WORK AS ONE.

Most Microsoft employees thought that my comparison with the military fed the industry view of their company as a heartless machine, but I meant it as a compliment. The image I had in mind was the great, dominant U.S. military of the Second World War and the decade after, combining varied talents and getting the job done. Especially in combat, the military tolerates all sorts of idiosyncrasies, as long as everyone pulls together when it counts. The superficially oddball developers do pull together: indeed, there seems to be very little grousing about the rightness of the largest corporate goals. The military famously prizes effectiveness rather than efficiency: it matters more that you beat the enemy than that you get high productivity per manhour out of your troops. So, too, in software. Half the time developers are shooting Nerf cannons at one another, waiting for instructions from the program managers, but then they all do what needs to be done.

There is one crucial difference between the tech economy and the military. This point is very touchy, and I am careful not to associate it with Microsoft in particular -- not just because I signed an agreement. The software world, like the U.S. military, contains great racial diversity. People of every skin color work in Redmond -- and in Sunnyvale and in San Jose. The difference is that the dark-skinned people who work in high tech are nearly all non-American. They are from India, perhaps from Malaysia, sometimes from Kenya or Ethiopia.

"Technology vs. African-Americans," by Anthony Walton (January, 1999)
From the caravel to the cotton gin, technological innovation has made things worse for blacks. Will the information revolution be any different?

One other discovery helped me understand why the company has remained so profitable and dominant. Microsoft understands exactly who its most important customers are. Unfortunately, that group does not include people like me.

Financial analysts have long recognized that Microsoft's profit really comes from two sources. One is operating systems (Windows, in all its varieties), and the other is the Office suite of programs. Everything else -- Flight Simulator, Slate, MSNBC, mice and keyboards -- is financially meaningless. What these two big categories have in common is that individuals are not the significant customers. Operating systems are sold mainly to computer companies such as Dell and Compaq, which pass them pre-loaded to individual consumers. And the main paying customers for Office are big corporations (or what the high-tech world calls LORGs, for "large-size organizations"), which may buy thousands of "seats" for their employees at hundreds of dollars apiece. Product planning, therefore, is focused with admirable clarity on those whose decisions really matter to Microsoft -- the information-technology manager at Chevron or the U.S. Department of Agriculture, for example -- rather than some writer with an idea about how to make his colleagues happier with a program.

This survival focus did not please me in all its consequences, but it made me think that this is an organization that knows how to succeed. And Microsoft's very success in satisfying the LORG market makes clear another step in the evolution of the tech economy. The software business no longer seems to have room for small companies that address the tastes of a specialized audience -- for instance, professional writers. But the Internet, with its near-zero distribution costs and its ability to group widely dispersed people with common tastes, may be a hospitable environment for boutique enterprises. Maybe that's where I'll launch my little word-processor company -- unless Microsoft, now alert to my plans, decides that a great program for magazine writers really would be a "killer app."

Copyright © 2000 by The Atlantic Monthly Company. All rights reserved.
The Atlantic Monthly; February 2000; Inside the Leviathan - 00.02 (Part Two); Volume 285, No. 2; page 34-38.