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Brash Sales Boss Leads Microsoft
In Its Assault on the Server Market
By REBECCA BUCKMAN
Staff Reporter of THE WALL STREET JOURNAL
Even in an industry where executives have elevated trash talking to an art form, Microsoft Corp.'s new head of world-wide sales and marketing, Orlando Ayala, stands out.
Consider his comment that Sun Microsystems Inc. Chief Executive Scott McNealy "can't handle the truth" about the quality of Sun's computer servers. Or his remark that Mr. McNealy's libertarian political views show he must be "smoking pot." (Through a spokeswoman, Mr. McNealy declined to respond.)
Clearly, the Justice Department's antitrust case against Microsoft isn't making the company less aggressive as it barrels into new markets. The old-school Mr. Ayala -- whose brashness and blunt talk is reminiscent of the style of his boss, Chief Executive Steve Ballmer -- is launching a no-holds-barred campaign against Sun and Oracle Corp. in the lucrative business of selling high-end servers to big companies. Mr. Ayala promises to "liberate" customers from the "tyranny" of what he calls overpriced machines from his competitors. "We're going to stop taking this goddamn high road," he declared in a recent interview. "We're going to go and compete head on."
The Colombian-born Mr. Ayala, who took his post in August, won't have an easy time making Microsoft a player in the market for servers, which power big Web sites and help automate complicated business processes like managing internal sales forces. But selling server software is critical to Microsoft's efforts to diversify its revenue base. Right now, only about 20% of Microsoft's sales come from nondesktop software and services bought by big businesses, according to Merrill Lynch & Co.'s Chris Shilakes.
In addition to tough competitors, Mr. Ayala, 44 years old, is running up against new cost controls inside Microsoft, which Mr. Ballmer announced after the company said it wouldn't meet profit and revenue expectations for the most recent quarter. Then there's the antitrust question: Some wonder just how aggressively Microsoft can push servers without raising the hackles of regulators, who have already punished the company for its tactics in the market for desktop technology.
Indeed, some of the methods Microsoft is using to break into the server market are similar to those it used to expand the reach of its desktop Windows operating system, including bundling products together and offering lowball pricing. Last month, for instance, Microsoft announced a deal with software provider Pivotal Corp. to offer packages of server software to businesses trying to run e-commerce operations, as well as manage customers and staff online. Such integration helps Microsoft bring products "to a price point that [is] much lower than it would have been otherwise," says Ralph Young, a vice president in Mr. Ayala's group.
A bigger issue, though, may be whether such tactics can work in a market in which Web-site performance is paramount and Microsoft products are still perceived as inferior to Sun's and Oracle's.
"I need a database that can handle more than 100,000 simultaneous users," says John Dillon, CEO of Salesforce.com Inc., which uses Oracle database software. "If [Microsoft] can deliver it to me, I can use it. If they can't, it doesn't really matter if they give it to me for free or not."
Attitudes like that drive Mr. Ayala crazy. He says new Microsoft products based on the more reliable and powerful Windows 2000 system -- unveiled last year -- mean Microsoft can now compete for any job handled by Sun and Oracle. "We just need to make it more visible to customers," says Mr. Ayala, who cut his teeth in Microsoft's international subsidiaries, beginning in Latin America. In his new job, he succeeds the more mild-mannered Jeff Raikes, who now runs Microsoft's mammoth Office business.
These days, Mr. Ayala and his colleagues like to point to happy customers like GMAC Commercial Mortgage Corp., which earlier this year built a new Web business with Microsoft servers in just three months. The site has cut the time it takes for companies to get a commercial mortgage from as many as 120 days to fewer than 10, officials say. What's more, the site has gone down only once since April, and that wasn't Microsoft's fault, says Ken Beyer, the chief technology officer for GMAC's new MortgageRamp service.
The company, a unit of General Motors Corp., has always used Microsoft products, "but we never used to get good support," says Niraj Patel, a vice president with the larger commercial-mortgage company. "That just goes to show you that whatever cultural changes they're trying [to put in place], they're working."
But officials at Oracle and Sun say they are skeptical. "Find me really big Internet sites that are run by Microsoft," challenges Mark Jarvis, Oracle's marketing chief. Rob Hall, a Sun vice president, says Microsoft isn't even one of Sun's top three competitors, and Microsoft's claims that Sun's products are overpriced are misleading.
As evidence, Mr. Hall points to Sun client A.B. Watley Group Inc., a New York brokerage firm that says it recently switched from Microsoft servers to Sun products and is able to serve five times as many customers for the same price. Watley Vice President Eric LeSatz says his company never tried Windows 2000 products, but he says he doubts they would be any better than the Windows NT machines Watley jettisoned.
Since taking over, Mr. Ayala has helped reorganize a big chunk of Microsoft's 4,000-person salesforce into teams focusing on specific industries so that salespeople can better tailor software and services to their clients. And he has signaled how seriously Microsoft takes the market for databases, the critical software that serves as a sort of file cabinet for data and provides the foundation for many corporate operations. He says sales of Microsoft's SQL Server database product will be "a very important part" of many salespeoples' required quotas.
Mr. Ayala has also increased employee bonuses and slashed the amount of time his group spends on internal business reviews so salespeople can spend more time with customers. "I said, 'Kill that s--- ,' " Mr. Ayala says. "You need to move." Slamming his palms together for emphasis, he adds, "What can kill an organization very quickly or very fast is getting big and fat and slow. I'm on a major crusade out there for simplicity."
To that end, Mr. Ayala in October sent his troops a memo titled "Playing to Win!!!" in which he laid out four simple "growth imperatives." They included going after Sun and Oracle and "attracting, developing and retaining the best and most diverse people in the industry."
Mr. Ayala seems to relish his underdog position. Like Mr. Ballmer, who once ran Microsoft's sales force, he likes to go all out at sales meetings. Last summer, he went on stage decked out in military fatigues to pound home the point that Microsoft was ready to launch a full-scale assault. Mr. Ballmer calls his new sales chief "a great leader who knows how to motivate others."
Stories about Mr. Ayala's competitiveness abound. Once, for example, he challenged former Microsoft Chief Financial Officer Greg Maffei to a running race down a half-mile-long corridor at the Singapore airport as both men furiously pushed loaded baggage carts. (Mr. Maffei claims the race ended in a tie; Mr. Ayala insists he won by about four inches.)
And Mr. Ayala doesn't shy away from danger. His chief hobby is flying the Piper Saratoga airplane he shares with a friend. Kevin Johnson, Microsoft vice president for U.S. sales and service, who sometimes flies with his boss, reports that Mr. Ayala is "always figuring out how he can get a little more air speed or altitude." For his part, Mr. Ayala says that flying "constantly reminds me that in business or up there in the air, remaining focused at all times can be the difference between living or dying!"
Write to Rebecca Buckman at rebecca.buckman@wsj.com |
