Microsoft Urges Patience, Growth to Return
By Marguerita Choy
WASHINGTON (Reuters) - Don't be so quick to sell off your technology stocks -- growth may have paused but the industry is on the verge of a revolution, and will soon see the return of 30 percent sales growth, according to an up-and-coming Microsoft Corp. (NasdaqNM:MSFT - news) executive.
``Last April was pretty tough time for every one, but if you play for the long term, you will be more than OK,'' Orlando Ayala, Microsoft's group vice president for sales, marketing and services, told Reuters in an interview last Thursday.
Microsoft's shares, which for a decade proved wildly popular among technology investors hungry for its consistent 30 percent-plus growth, have slid in recent months as the growth rate has stalled at around 15 percent year-over-year.
``The industry, (and) Microsoft will be able to get back to the 30 percent growth because we are just renewing ourselves ... Microsoft is doing it, but in general this big wave is going to lift all boats and that's what is exciting,'' he said.
Ayala was until recently a little-known, second-tier manager but is now said to be potentially next in line to become chief executive of the computer software giant, which is based in Redmond, Wash.
After previously serving as a senior vice president in charge of the South Pacific and the Americas, Ayala was promoted to his current job in August, when Microsoft announced its .NET (pronounced ``dot-net'') initiative. The new Microsoft strategy will allow the company to deliver software and other services over the Internet instead of distributing its products in shrink-wrapped packages through retail.
``Not all those companies will survive but we are in the very early stages of financial opportunities for society and knowledge opportunities for society,'' he said.
``I do believe that human beings and society are at the verge of a very important revolution in terms of consumer patterns. The Internet is in the very early stages of what the Internet is going to be capable of,'' he said.
Setting up the .NET management team marked Microsoft's third executive restructuring in 18 months.
It came amid concerns about slowing growth and ongoing legal woes as the company fights to reverse a U.S. federal court's ruling to break it into two parts on antitrust grounds. In response, the company's stock was cut in half from a year high of nearly $120 in December to a low of $60-3/8 in July. It was trading at $69 on Monday.
THE MAN WHO MAY BE KING?
There are some murmurs that the 44-year-old Ayala could be the next in line to Steve Ballmer, who was just made chief executive in January, with Bill Gates, who held the CEO position since the company's founding in 1975, remaining chairman and adding the title of chief software architect.
Industry analysts said, however, there were other people in the company's hierarchy better poised to take the job.
``It would surprise me ... but Microsoft does things that take people by surprise,'' said Dwight Davis, a market analyst at Summit Strategies Inc. in Kirkland, Wash.
And Ayala, who left NCR Corp. (NYSE:NCR - news) after 10 years to rapidly rise through the ranks since joining Microsoft in 1991, himself remains coy about the rumblings.
``I don't even want to touch that one. People always ask me what I think is my next step. I say I don't think about my next step. There is one thing that I am always sure about ... I want to be sure that what I do I do with a lot of passion, and I do love what I do,'' he told Reuters.
``That provided, things will come. So I don't want to speculate about that. Who knows?''
Ayala, who was born in Bogota, Colombia, was interviewed in Washington at the Hispanic Heritage Awards, an annual event that recognizes the achievements of prominent members of this fast-growing U.S. ethnic community.
``I am a Hispanic who is very proud of what I do, very proud of being part of the company, which is the best company in the world,'' he said here ahead of the event.
``I am totally convinced of that, but I also understand that when you achieve something in life, you have to give back not only to the family but also to the community, specifically to the Hispanic community because I am very proud of my roots.''
All Eyes On Latin America And Asia
Microsoft took part in the event as a sponsor of the youth award in science and technology. Ayala, who presented this year's prize, sees Latin America as a future technology player -- if it can learn lessons from emerging leaders like India.
``It (India) created a whole industry on the software side, basically by really promoting and really creating the basis for a huge talent export and India is very well known on that front.
``That requires a lot of vision, a lot of patience. This is not about a two-year thing and that's why our company thinks like this ... there has to be a 10- to 20-year type of commitment,'' Ayala said.
In the shorter term, however, the company that fueled the personal computer boom also sees Latin America and Asia as the regions to compensate for flagging sales growth elsewhere.
``Sales are slowing down, although we have a couple of regions around the world growing pretty fast -- Latin America in excess of 30 percent and Asia is actually doing very well,'' Ayala said. ``At this point of time, Asia is the fastest growing region around the world.''
Microsoft in Asia grew 46 percent in the fiscal year ended in June, as the region bounded back from the economic crisis that had sapped its results in prior years.
Ayala noted, however, that Western Europe and the United States still account for roughly 70 percent of Microsoft's revenue.
``But my invitation to you is to look at it in a different way. The reality is we are at the very early stages of a major revolution, very similar in my view of what happened with the car, train and the airplane -- (they) revolutionized the way people were doing business,'' Ayala said. |
