Just Another Product Launch in that demure, subdued, $200 million Microsoft kind of way: inside the introduction of Windows XP.
(FORTUNE Magazine) – It's Oct. 25, and Microsoft Chairman Bill Gates stands on a Broadway stage, ready to introduce his company's new PC operating system, Windows XP, to the world. Gates has done plenty of product launches before, but none in circumstances quite like this. A gospel choir has just finished a stirring rendition of "America the Beautiful" and exited the stage; New York City Mayor Rudy Giuliani--who received an exuberant standing ovation--is just to Gates' left. "I've got a few simple messages," Gates begins. "We all support the global fight against terrorism. New York is back and open for business. And though the economy's tough, the tech industry will keep making the investments and the innovations that will revive our economy." It takes a while for Gates to get around to mentioning Windows XP, the ostensible star of his show.
Microsoft knows that the launch of Windows XP is basically a very expensive publicity event. (Very expensive: the worldwide marketing and launch costs came to $500 million, including
$300 million kicked in by Intel and other major partners.) It's a chance for the company to score some airtime, schmooze with its business partners, and jump-start its sales for the holiday shopping season. It is an excuse for Gates & Co. to take over a Broadway theater, rig an elaborate set, and hire the amusingly computer-phobic Regis Philbin to help demo its software. It is a reason to block off New York's Bryant Park and pay Sting to play a free lunchtime concert. In normal times you would call this a big old party.
These, however, are not normal times--and watching Microsoft prepare for its launch, you get the sense that the whole affair wants to be something more. Executives don't just talk about XP's usability; they talk about how XP will boost the computer industry. Scratch that. They talk about how it will boost the whole darn economy. Chairman Bill's jacket doesn't just sport a Windows logo--there's also an American flag sewn onto the back. Microsoft wants nothing less than to be the company that helps America get back to business, that lights the path to prosperity. (It's not going to be that easy; see box.)
What's surprising about the Windows-XP-as-a-force-for-good phenomenon isn't that Microsoft would, in tough times, cast itself as some kind of savior. A cynic would call that opportunism. What's surprising is that for the most part, the people inside the company seem to sincerely wish it so. Like most of us, Microsoft people believe they're motivated by good impulses--a desire to make lives better, to create high-quality products, to contribute to society. After spending most of the week leading up to the launch with Microsoft employees, I could see that the Oct. 25 party was a collective opportunity to congratulate themselves for succeeding. Sure, the event is a chance for Gates to strut and joke around with Regis and show that he is more than a monopolist. But behind the hoopla are the expectations of thousands of software designers, salespeople, and marketing folks. They are looking to this event for a validation that all along they've been doing the right thing.
For some, like Jim Allchin, that validation has been a long time coming. Allchin, who oversees Windows as head of Microsoft's platforms group, is a former programmer and now a software architect. He's been in the software business some 18 years and has spent the past 11 of those at Microsoft. On the Thursday before the New York launch, Allchin is sitting in a conference room in Redmond, Wash., just a few steps from his office. He is unabashedly enthusiastic about Windows XP. "It's part of my heart and soul," he says.
Windows XP is special to technical types like Allchin, largely because it signals, once and for all, that Microsoft has ditched MS-DOS--the old, outdated software code that has been the core of its operating systems for the past 20 years. One basic problem with DOS is that it was not designed to handle graphics; the "windows" that home PC users have seen on the screen have been just a facade, an ornamental front on a sturdy utilitarian structure. Having DOS behind the scenes made Windows slow, prone to crashes, and just plain hard to use. It also made it very difficult for Microsoft engineers to make necessary improvements. As Allchin explains it, trying to rid Windows of DOS bit by bit "was like changing the foundation of a house without having the house fall down." The net result: Most techies thought Microsoft's consumer software stank. They considered the company's market dominance to be at best undeserved and at worst a case of a bruiser bullying consumers into using inferior products.
Writing a version of Windows that did away with DOS became a matter of pride for Microsoft programmers. Allchin started working on the problem way back in 1990. He and his team came out with Windows NT, a no-DOS version of Microsoft's operating system for businesses, in 1993. Getting to the consumer-friendly XP took eight more years.
For Allchin, finally finishing the job has been a major career accomplishment. You may recall him as the witness whose credibility crumbled at the Microsoft antitrust trial a few years ago when he was forced to admit that Microsoft had presented a doctored videotape as evidence. Now he is basking in the praise that reviewers have ladled on Windows XP; it's a big change from the dissing that Microsoft software usually gets at launch. He is excited to have built software he sees as artful, and he seems genuinely thrilled to imagine a land where people will have an easier time sending e-mail, viewing their digital photos, and surfing the Web. ("No reboots! No reboots!" he says, pounding his fist on the table.) Allchin is convinced that the rest of the computer industry will be impressed with Windows XP too--and that its release will boost sales of new PCs and peripherals like digital cameras, MP3 players, and Webcams for videoconferencing. "This is an amazing opportunity for partners," he insists. "I think it's a great product, and if anything will raise all the boats, it's this. We've got enough evidence to believe in this in a hard-core way.
"When I decided to come to Microsoft," he continues, "I had reservations, because I didn't think the company built the best software. It's been 11 years--a long time to get to something I'm really proud of." I ask him whether it's gratifying to hear the rave reviews from techies. "Yeah," Allchin replies, eyes wide. "Yeah. Yeah." That kind of pride among Microsoft employees is important to CEO Steve Ballmer. "This will reassure our people that this is a place that worries about quality issues," he says.
Microsoft's marketers are just as excited about promoting user-friendly software as the engineers are about creating it. But they have an unusual challenge. The country is, after all, in the throes of a severe economic downturn, at war, and under attack by unseen terrorists. "This one is going to have a certain emotional complexity," Gates tells me three days before the big day. Back in Redmond, marketing chief Mich Mathews puts it more plainly: "At one point we were concerned if it was even appropriate to launch a product."
By late summer Mathews and her staff had been working to promote Windows XP for over a year. They had been spreading the word among customers and technology partners, and had persuaded a number of large corporate customers to adopt the new operating system before the launch. Director of marketing Stephanie Ferguson and ad agency McCann-Erickson licensed the Madonna song "Ray of Light" as the soundtrack to a colorful, whimsical ad campaign that told customers to "Prepare to fly." They also plugged away on the home front. When a big product is about to launch, Microsoft rallies its employees to pump up excitement. So the marketing team set up a "countdown" clock on the Redmond campus and sponsored sales competitions to see which regional reps could come up with the best product demo. The trash talk between regions flew fast and furious. "You should have seen the e-mails going back and forth between the district general managers," says Ferguson.
Everything changed on Sept. 11. Mathews and her staff scrambled to adjust the strategy. They made a number of last-minute changes to ads, most notably dropping "Prepare to fly" for the aviation-free "Yes you can." But they decided to go ahead with the launch, sticking to the plan to hold the festivities in New York City and inviting Mayor Giuliani and Governor George Pataki to share the stage with Gates. Yet despite the awkwardness of trying to have promotional fun at such a time, Mathews is still, in the days before the launch, staying focused on XP. "The company is introducing a kick-ass product," she says, "something very, very good."
The man most responsible for making sure that Oct. 25 is a fitting, pumped-up validation and celebration is Windows marketing manager John Frederiksen. One week before the launch, he's full of nervous energy, and the pressure seems to be both egging him on and wearing him down. Guiding me into his office, Frederiksen starts chatting amiably. "I keep reminding people this is fun," he jokes. At least he seems to be joking. It's been a tough nine months for him and his family. He sees his 8-month-old son only twice a day: at the baby's 7 A.M. and 11 P.M. feedings.
But it's also clear that Frederiksen, a veteran of four launches, lives for this stuff. He can rattle off a torrent of lists and figures, and he seems to take pride in running the big show. He oversees 55 product managers who fall into four categories, including one called "product buzz"-- "They're the ones who aren't getting any sleep," he explains. He's bringing a staff of 30 to New York. He is running five types of activities at the launch, and he has three primary responsibilities once on-site: overseeing logistics, making sure the partner vendors stay happy, and giving interviews. Plus he has two war rooms to handle.
He has to run now, but he'll see me again in New York. "The days fly by--I can't believe it's Thursday!" he says, as he shuffles me out of his office.
When I see Frederiksen again on Tuesday the 23rd in New York, he's a different person. He's almost calm--that is, he's pausing between sentences to take a breath every now and then. He says he's worrying about keeping the vendor partners happy, and he'd like to shave ten to 15 minutes off the 75-minute keynote presentation (the one Gates will deliver on Thursday, with the help of Philbin and an army of backstage support). Otherwise things are fine. "When you're in Redmond planning, there's a lot of pressure--are you doing things right?" he says. "But once you're on-site, you're just focusing on execution. It's one of the most relaxed times." There is no more soul searching, no big-picture decisions to make. There's too much work to do.
Marketers, technicians, a stage manager--more than 60 people in all--are busy at work transforming New York's Marriott Marquis and the Marquis Theater next door into XP Central, a kind of impromptu convention center. The crew loads up the trap (the area beneath the stage) with truckloads of electronic equipment to run the high-tech set. Everything is backed up, and backed up again for good measure. Workers plaster Windows XP signs all over Times Square--on the theater marquis, on a hot-dog stand, along the wall where theater fans wait for half-price tickets to Broadway shows.
On Wednesday the scene is opened up to the rest of the press to kick off a mini-trade show for Microsoft's partners. Allchin gives a little speech, introduces the partner companies, then turns the mike over to Gates, who declares, "This is a milestone for the industry." Madonna's "Ray of Light" fills the room, and Mathews' and Ferguson's happy, colorful ads pop up on screens everywhere you look, in English, Dutch, French, Spanish, German.
Gates walks around the exhibits in the Marriott and is swarmed by an army of camera crews. Frederiksen expected three camera crews to come to this event; they got 11. He expected somewhere between 50 and 100 journalists--this is, after all, not the launch itself but merely a preview--and 200 have turned up. Security officers step in and scoot Gates out of the room. It's not safe, they've concluded, for him to hobnob in this large crowd. Even a day before the launch it's clear that Microsoft's $200 million publicity machine has done its job.
Measuring the success of an endeavor like the Windows XP launch is no simple matter. Sure, Microsoft people will look at product sales. But they'll also assess the event itself. Did they come in within their budget? How did it go over with the press, their partners, and their customers? They'll examine their own feelings as the day itself unfolded. Was it fun? Exhausting? Uplifting? Surprising? Many will find themselves drawing comparisons between the XP event and the product launch to end all product launches, the debut of Windows 95.
The Windows 95 launch, a carnival-style extravaganza that took place on the Microsoft campus, looms large in the company's collective memory. In separate interviews Steve Ballmer and Mich Mathews refer to it, saying that it represented a moment in the history of the company when "the stars were aligned"--a time when people got really excited about a new Microsoft product in large part because the product's release coincided with equally compelling events in the outside world (in that case, the rise of the Internet and the home PC).
Microsoft people further down the totem pole like to make comparisons to 1995 too--they want 2001 to take its place. Hardworking and serious, these Microsoft guys crave a sense that what they're doing is earth-shattering stuff that will take computing by storm. It's why they're excited about the quality of the XP software, and it's why they're thrilled to be in New York. After years of punishment at the hands of lawsuits and dot-com fads, Microsoft is ready to roar back. That the company is reasserting itself in a time of crisis only reinforces its employees' conviction that they're on the side of right.
"The launch of Windows 95 was a monumental time, for Microsoft and for the industry," says Shawn Sanford, Frederiksen's deputy, on the night before the launch. "You'll never repeat that moment in history. But when I compare Windows XP to it, I think that this is one of those significant points in time too. The tech industry is looking for something to be excited about. Because we built Windows XP, they're realizing their visions." That's the sound of confidence, and that's something you don't hear much of from the tech industry these days.