Microsoft

Two years ago, Microsoft Chief Software Architect Ray Ozzie was working on a file synchronization technology that would make stashing and grabbing pictures, documents, and music from any device a cinch.

Ozzie, hand-picked by Microsoft co-founder and Chairman Bill Gates to succeed him as the corporate visionary, gathered a team of 50 or so employees to piece together the concept. Something of an industry legend, Ozzie was a co-creator of Lotus Notes, and he joined Microsoft in 2005 after the company bought his startup, Groove Networks. To hear Microsoft insiders tell it, Ozzie was stepping straight into one of the epic turf battles that have come to define the company over the years.

Ozzie's vision -- part of an offering known as Windows Live Mesh -- became a threat to a different concept championed by Windows President Steven Sinofsky. His team was working on a similar feature for its SkyDrive Web storage service. The dispute, recounted by four current and former Microsoft executives, centered on Sinofsky's objection to the development of a service that ultimately might become part of Windows that he didn't control. Sinofsky took the fight to Microsoft Chief Executive Steve Ballmer, arguing that relying on development of the service outside the Windows division could delay the next version of the operating system and undermine the company's flagship product.

"Steve [Ballmer] made the decision to fold Windows Live Mesh into Steven [Sinofsky]'s organization, and Ray fought that pretty hard," a former executive said. Ozzie announced plans to leave Microsoft in October 2010, shortly after the decision.

Microsoft

Brass knuckle tactics are nothing new at Microsoft. And every major product at Microsoft requires hard choices, balancing tradeoffs and occasionally ruffling feathers. But Sinofsky's critics say he's elevated those battles to a new level, thriving by marginalizing rivals while running the company's most profitable businesses, Windows and Office. Along the way, he's created a rigid product development process that puts more control in his hands and, those critics say, diminish the ability to innovate at Microsoft.

When Sinofsky took over the Windows and Windows Live Group in March 2006, there was little doubt it needed tighter control. Windows Vista was nearing the end of a disastrous development process, an overly ambitious effort that led to lengthy delays and a profoundly disappointing final product. Sinofsky had previously run Microsoft's Office division, churning out quality releases on time. When he took over Windows, he brought order to chaos, releasing Windows 7 to generally positive reviews in 2009. Ballmer didn't put Sinofsky in the job to win fans but rather deliver on goals set by management.

On Thursday, Sinofsky will debut Windows 8. The newest version of the operating system is a huge bet for Microsoft, a bid to regain some of its lost leadership in an industry where Apple and Google are increasingly setting the tone.

Success is hardly a sure thing for Windows 8. There's no doubt Microsoft will sell hundreds of millions of copies of the operating system, as PC makers roll it out to consumers with their latest hardware and corporations eventually adopt it under existing licensing arrangements. The real metrics to watch will be how quickly consumers and businesses buy Windows 8, and how much of a dent Microsoft makes in Apple's huge lead in the tablet business.

If Windows 8 succeeds, it will be the biggest triumph of Sinofsky's 23-year Microsoft career. Sinofsky is a slightly built man, who both colleagues and critics describe as brilliant. He joined Microsoft fresh from the University of Massachusetts, Amherst, where he earned a master's degree in computer science. He went on to run the Office division for seven years. After he took over the troubled Windows group, he salvaged Microsoft's reputation with the polished Windows 7.

Avoiding the spotlight

Sinofsky remains one of the most private executives at Microsoft, and he declined to comment for this article. He makes himself available to the media to talk about products, but he rarely sits for interviews to talk about himself. One of the few times Sinofsky did consent to a profile was when he spoke with me for a story I wrote for the Seattle Times in April 1999. (The article is not available on the Times' Web site.) In that piece, he talked about his unease when his name appeared in the government's antitrust litigation against the company.

"At first, you wish you could go and tell everybody what really happened. Then you get frustrated," Sinofsky said. "It's uncomfortable. It's not cool to have your name in print when it's not the truth."

For all the misgivings some current and former colleagues have about him, Sinofsky can often flash a quick wit and a disarming sense of humor. Around the office, he's partial to wearing a v-neck sweater on top of a T-shirt. While he clearly has tech cred, Sinofsky also remains tapped into popular culture, sprinkling references to reality television programs, such as The Voice, into conversations. When he talks about products and technology, he's precise in his exchanges, very much in command of details.

As he's climbed the corporate ladder, Sinofsky has become one of the most polarizing figures at Microsoft. CNET interviewed 15 current and former Microsoft executives and executives at companies that partner with Microsoft, all of whom have worked directly with Sinofsky. Most requested anonymity because they feared potential repercussions. They paint a picture of an executive who is incredibly smart and passionately driven to ship quality software on time. But some also say Sinofsky can create a toxic work environment that has chased talented employees away from a maturing company that's in desperate need of innovative thinking. Yet Sinofsky has appeared to have consistently had the support of Gates and Ballmer.

Steven Jay Sinofsky Born:

1965 in New York City Parents:

Marsha and David Sinofsky Childhood:

Ten years in Cedarhurst, N.Y., then Altamonte Springs, Fla., a suburb of Orlando. Education:

Graduated with honors from Cornell University's College of Arts and Sciences in 1987, majoring in chemistry and computer science. In 1989, he earned a master's degree in computer science from the University of Massachusetts, Amherst. Microsoft hiring:

While in graduate school, Sinofsky sent his resume to the address on the side of a Microsoft Word box. Microsoft career:

Sinofsky joined Microsoft in July 1989 as a software design engineer. Three years later, he became Gates' technical assistant. In 1999, he became senior vice president of Office. In 2006, Sinofsky became senior vice president of the Windows and Windows Live group. Three years later, Sinofsky was promoted to president of the Windows division.

A little more than a year ago, Manu Cornet, a Google software engineer who dabbles in cartooning, produced a gem that rapidly made the rounds in techdom. In the cartoon, Cornet mocked organization charts of the industry giants. The diagram for Apple, for instance, featured one bright spot in the center, presumably Steve Jobs, and nearly every organizational line reporting to him. Oracle's chart featured a massive legal organization, and a much smaller engineering group.

Perhaps the most biting was the Microsoft org chart. Cornet drew a series of traditional hierarchical groups, except that each one was contained by a bubble and had guns pointing at the other groups.

"In my opinion, Steven Sinofsky epitomizes that," said Charlie Kindel, a 21-year Microsoft veteran, who said he dealt with Sinofsky many times in his tenure at the company.

Near the end of his run at Microsoft, Kindel worked to bring independent software developers to the Windows Phone platform, a significant challenge in a business where Apple's iOS and Google's Android operating system are the entrenched leaders. Kindel was invited to discuss the Windows Phone 7 application platform with the team building the application platform for Windows 8 in the fall of 2009. But two days before he was to give the presentation, Kindel got word from his bosses that the presentation was off. Kindel said he believes Sinofsky personally shot it down.

"It represents a siloed perspective," Kindel said. "It represents an us versus them perspective."

Kindel left the company last year to launch a startup, BizLogr, that's developing a business mileage tracking and logging service.

The Sinofsky way

While Sinofsky keeps a low profile for such a high-ranking executive at a prominent company, he is a prolific writer, churning out lengthy e-mails and blog posts. A collection of internal blog posts Sinofsky wrote after he joined the Windows team are the foundation of a book, co-authored with Harvard Business School professor Marco Iansiti, called "One Strategy: Organization, Planning, and Decision Making," published in 2009. The book details Sinofsky's management strategy for ensuring Windows 7 was a high-quality operating system that shipped on schedule. It makes the case for a laser-focused planning process for complex product development.

At the heart of the book is Sinofsky's case for a "functional organization." That's management-speak for reporting lines that are structured around job functions -- such as product management, development, software testing -- as opposed to a "product organization," where multi-disciplinary teams work on specific feature sets together. Sinofsky and Iansiti argue that functional organizations create clearer road maps for workers to march toward a final goal.

It's dense stuff, but the functional organization structure championed by Sinofsky is a flashpoint for his critics. Managers beneath Sinofsky say they had greater control over product development, working across groups with engineers, product managers, and software testers. Now, they say they feel more like cogs in the machinery, marching toward a final pre-determined goal, without the authority to shift course if they believe there's a more innovative approach to product design.

"You are told what to do now," said a current Microsoft executive. "It puts more directional control in the hands of the leadership."

One former senior executive referred to the approach as "Soviet central-planning." In a blog post quoted in "One Strategy," Sinofsky acknowledged that the organizational model is "controversial" but said it was a necessary structure to ensure workers could focus on their areas of expertise to meet product planning goals.

"We are adjusting to operating in a way that optimizes for executing within a planned framework," Sinofsky wrote.

Josh Lowensohn/CNET

There's no doubt that a functional organization can produce innovative products. The Office group released some novel business applications, such as its SharePoint business collaboration software, while Sinofsky was at the helm. And while Microsoft's Surface tablet is late market entrant, it sleek design has won some early plaudits.

But critics say breakthroughs that alter industry dynamics are rare on Sinofsky's watch. They argue it's because the tight control from the top squeezes out innovative thinking from below.

"What you end up with is a soulless product," said one former Windows executive.

Nonetheless, Microsoft is betting that it will be big enough of a leap from Windows 7 to regain the ground it's lost to rivals in recent years.

Sinofsky has also made plain his distaste for skunkwork operations, where small teams are created outside of organizational structures to gin up entirely new concepts. Microsoft created just such an team in the late 1990s to work on video gaming technology that ultimately became its successful Xbox entertainment franchise, which generated $1.3 billion in operating income on $8.9 billion in revenue in the fiscal year that ended June 30. Microsoft also set up Pioneer Studios, a group that worked on an ill-fated tablet device that might have debuted about the same time as Apple's original iPad had it not run into staunch opposition from Sinofsky.

"One Strategy" includes a guest post that Sinofsky wrote on the internal blog of Lisa Brummel, the head of human relations at Microsoft. Sinofsky goes into great detail, dissecting the relative merits of innovating outside the constructs of a large organization versus baking new ideas into existing products. He doesn't completely eviscerate the skunkworks model. But his co-author Iansiti wrote in the comments following the blog post that Sinofsky clearly prefers innovating in existing businesses.

"To this day, I don't know if he was just trying to rattle my cage or if he really cared." <br />--current Microsoft executive

"The blog ends without making a universal recommendation as to one model being 'better' than the other, although Steven's preference can be detected by reading between the lines," Iansiti writes.

Sinofsky's model stems from his desire to keep tight reins on complex development processes. But some critics say it can sometimes border on micromanagement. One current Microsoft executive recalled getting a call from Sinofsky a few years ago, questioning a modest budget request buried deep in a planning spreadsheet. That might not seem particularly extraordinary, except that the executive didn't report to Sinofsky, but rather to one of Sinofsky's direct reports.

"To this day, I don't know if he was just trying to rattle my cage or if he really cared," the executive said.

That level of detail is a bit reminiscent of the leadership of Microsoft co-founder and Chairman Bill Gates, for whom Sinofsky served as technical assistant in the 1990s. Sinofsky's job was to keep tabs on technical journals, academic research, and competitive rumblings to keep Gates apprised of potential threats and opportunities. He is credited with being one of the first at Microsoft to warn Gates of the importance of the Internet, a revelation he had on a recruiting trip to his alma mater, Cornell University, where he watched students using e-mail and checking course lists on the Web.

Like Gates, Sinofsky has a deep grasp of technology. Colleagues say he'll often reply to an e-mail from them with one that runs several screens long, going deep into the technical weeds to make a point.

"He is a 500-pound gorilla in e-mail," said a former executive who worked for Sinofsky.

So how did such a controversial executive rise to the executive suites at Microsoft? He established a track record with Office of shipping products on time. His organizational focus led Microsoft's leadership to have Sinofsky clean the Windows Vista mess that some internally had dubbed "the Vistaster." When Windows 7 debuted in 2009, it didn't just arrive on time and to solid reviews; it helped restore Microsoft's credibility, particularly with corporate customers, many of whom held off upgrading for years to avoid Vista.

Ed Rhee/CNET

In Microsoft's executive offices, Sinofsky gets credit for keeping the wheels of two of Microsoft's biggest engines running. Questions about products with soul or technological innovation become less pressing when his Windows division generates $12.2 billion in annual operating profit on sales of $19 billion, as it did in the last fiscal year. When it comes to upgrading existing products, quality control can often trump creativity.

That success has increased Sinofsky's power within Microsoft. He increasingly is seen as one of the few executives not just at Microsoft, but anywhere, who can successfully marshal a massive team to release a product as complex as Windows. It's Microsoft's moonshot, a multi-year endeavor on which more than 4,000 workers toil.

"They need him," said one former senior executive.

Now, sources say, Sinofsky is even battling with Ballmer, increasingly disregarding the chief executive's efforts to get the Windows group to work in concert with other divisions. Disputes over features are hardly new at Microsoft, particularly as products hurtle toward the finish line. But the brashness of the latest disagreements is stark.

"The general perception is that the Windows group is harder to work with over the past year than it has been," a current Microsoft executive said.

James Martin/CNET

As Windows 8 rolls out, speculation both inside Microsoft and out runs high that Sinofsky may be in line to take Ballmer's job as chief executive when he eventually moves on. After all, Sinofsky has run the two marquee products at Microsoft, Windows and Office. He has a track record of shipping on time, a highly valued skill at the company.

What's more, many of the would-be rivals for the job, senior executives who have also run the biggest Microsoft groups, have left the company in recent years. Jeff Raikes, who ran the Office group and Microsoft's sales operation, is now chief executive of the Bill & Melinda Gates Foundation. Robbie Bach, who led Microsoft's entertainment division, retired. Kevin Johnson, who led the Windows division and Microsoft's sales force, is now chief executive of Juniper Networks. And J Allard, a younger leader who launched the Xbox business and led the skunkworks tablet concept Sinofsky opposed, left the company in 2010.

That would seem to clear the decks for Sinofsky's ascension. But a Microsoft executive familiar with the thinking of senior management said Sinofsky's rise to the corner office is hardly a sure thing. Senior managers recognize how divisive Sinofsky can be. He may well be the right guy to get Windows out the door, but his temperament may not be suited to run a giant and iconic corporation.

Increasingly, the company is connecting products across divisions, letting consumers, for example, pick songs over Xbox-connected home entertainment systems using Windows 8 tablets. It's a world that requires the kind of cross-division teamwork that Sinofsky's critics say he lacks.

"Steven is a rare talent," the executive said. But "as you think about future leadership, collaboration will be critical in a way it has never has before."