News Column

A Macro View at Microsoft

January/February 2005, HISPANIC BUSINESS Magazine

Judi Erickson

Orlando Ayala
Orlando Ayala

From his office on Microsoft's 355-acre Redmond, Washington, campus, Orlando Ayala maps a global strategy for tapping "the next frontier for technology": small and mid-size companies.

The expansive mission into a notoriously complex market puts Mr. Ayala, senior vice-president of the Small and Midmarket Solutions & Partner Group and recently-named COO of Microsoft Business Solutions, in one of the $37 billion company's most influential and high-pressure positions.

Overseeing a workforce of about 5,000, directing sales, marketing, and operations for the group, working with Microsoft's seven business units to integrate products for small and mid-market customers, and expanding channel strategies through a worldwide partner and software vendor network all fall to Mr. Ayala. At least one analyst has called him one of the most powerful people at Microsoft.

And his mission comes with a formidable goal. Microsoft Business Solutions started several years ago through acquisitions of small and mid-market business applications providers Great Plains Software Inc. and Navision saw 18 percent annual growth to $667 million in fiscal 2004. Officials have said they expect Mr. Ayala and his team to increase that to $10 billion by 2010.

But Mr. Ayala speaks evangelically about an even larger vision of providing the "last mile in the business process" to an ecosystem of consumers and companies that needs technological advances in the small and mid-size market to reach a new level of global productivity.

"It's about providing leadership and explaining that there is a path to take society to the next level by productivity increases. It's about enabling society in many ways," says Mr. Ayala, noting that the vision is shared by Microsoft's top leaders Bill Gates and Steve Ballmer. "We love missions and visions and I truly believe this stuff. I don't work here because it's Microsoft. I believe in legacy when you do work you believe in."

But to reach his goals, there will be challenges, including fending off competition from open-source software providers and developing solutions for an immense market that has vastly varying needs.

"Our single largest competitor is that for the most part it's hard and complicated to reach out to these small and mid-market companies and help them use these products. That's the ultimate challenge," says Mr. Ayala. "Also, the complexity of the market, and the software. We have to remove complexity. This is uniquely important especially in underserved communities."

Ultimately, he says, it's about closing gaps. "Most people are very intelligent and great software innovation can shorten that gap," Mr. Ayala has said. "We are all about that: Reducing complexity will remove gaps in productivity and in society."

With a vision that "innovation is the core of providing opportunity," Microsoft is dedicating at least $2 billion annually to developing the small and mid-size market. "The really important thing is that you have to bring all of the pieces together," says Mr. Ayala. "Just great R&D won't cut it. Another piece of that is providing ways for customers to get access to solutions in a simple way."

To do that Mr. Ayala has undertaken an aggressive array of initiatives and has played a critical role in generating a more customer-centric corporate view of the market. Mr. Ayala recalls a management retreat with Mr. Gates, Mr. Ballmer, and others. "I was really a lightning rod in creating a company around customers. I got up and basically said I disagreed. Our previous vision was a computer on every desk. Software is critical, but if you make the mission of a company center around people's potential [you achieve much more]. I was one of those that worked to ensure we live that day in and day out."

That approach is a key to Microsoft Business Solutions' strategy in the small and mid-size market where Mr. Ayala says affordability, quality, simplicity, and support services will be vital.

To learn about the market, Mr. Ayala has tapped his brother, owner of a small hobby shop in Seattle, incorporating his advice on the needs of business owners into plans for sales and product development. The company also has launched "customer wallows," where everyone from Mr. Gates and Mr. Ballmer visit dozens of small and mid-size business owners to learn what they need. "Microsoft Across America" involved senior officials touring 3,000 miles and visiting 4,000 companies to understand how they use technology. And there are support-service tests under way in various regions, including a Small Business Center under and a pilot project for mid-market companies called Customer Connection Center (C3) that includes a Web-based support site.

While Mr. Ayala acknowledges his aggressive sales goals may not materialize in six years, he's "very bullish." And based on his track record, the 15-year Microsoft veteran may be right. As senior director of the Latin American region in 1991, he expanded it from two to nine subsidiaries over four years and increased regional revenues 90 percent. As senior vice-president of the Intercontinental region, within three years he had doubled revenue from $500 million to more than $1 billion.

In announcing Mr. Ayala's appointment as COO of the Business Solutions group last June, Doug Burgum, senior vice-president of the group, noted "Orlando's strong track record of executing on, growing, and developing Microsoft sales organizations."

Mr. Ayala says key to his success has been his commitment and ability to balance short- and long-term goals. "You have to be associated with a company with a very strong vision, like this one. Innovation that this company has done doesn't need to be explained. But on a personal level, you have to live this thing day in and day out. You have to be committed.

That doesn't mean Mr. Ayala who is married with four daughters ranging in age from 14 to 22 years old takes on all challenges. While he has spent months in Japan, India, Brazil, and other locations for the company, when Mr. Ballmer asked him to go to Japan for three years he declined. "He was surprised, 'The guy who takes on all challenges is saying no,'" Mr. Ayala recalls. But, he says, "You have to be sure that you're happy in the rest of your life. The power and ability of growing is not getting in the middle of making yourself unhappy in the other side of life."

To balance family and his rigorous workload, Mr. Ayala sets a disciplinedschedule as much as 18 months in advance, and surrounds himself with employees who handle their work efficiently and effectively, allowing Mr. Ayala to focus on strategy.

"To [balance everything] you have to be at all times thinking, 'How do I hire people that are better than I am?' You shouldn't be intimidated by that. You should want people who challenge you. The day you stop learning you have to ask yourself, 'Am I in the right place.'"


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