Interview: New Microsoft NZ head talks to Computerworld

Geoff Lawrie ascended from the position of director of sales and marketing to become head of the company on the resignation of Microsoft New Zealand managing director Greg Cross last month.

Lawrie has been in the computer industry since 1979, with a background largely in sales and marketing and a small career diversion in 1990 as the technology projects director for the Auckland Commonwealth Games. Now in the hot seat at Microsoft, he spoke to Computerworld reporter Ria Keenan about his own and the cmpany's directions.

Q: One issue that was raised when Greg Cross left was the suggestion that sales of Windows 95 were poor when compared with the number of copies ordered. It has been called Windows for Warehouses. Why did Windows 95 not live up to expectations?

A: Windows 95 by any metric that you would care to name has been a terrifically successful product. On an international basis we have sold well over 20 million copies in about its first six months. That figure took us more than two years to achieve with Windows 3.11, and you would have to say that's been the most successful operating system ever. Against sales of any other operating system they're fantastic figures, and in my view it deserves that success.

The issue we have is one of perception; expectations, I guess, rather than reality. And yes, we were enthusiastic, very optimistic about how Windows 95 was going to do. Probably, I guess, we were carried along a little bit by the enthusiasm that prevailed around the August time-frame. From that point of view the worst thing to do would have been to run out of stock and we've seen the damage that can do to organisations like Apple, which, repeatedly makes that mistake with hardware. So it was a no-risk stock strategy.

Q: What has happened to the unsold copies?

A: Windows 95 is selling through the channels and will continue to sell throughout the year. We're not anticipating releasing a replacement product in this calendar year, so it's all current stock and it's selling.

Q: I've heard that New Zealand ordered more copies of Windows 95 than Australia did. Is that correct?

A: No, I don't know where that came from. It's arrant nonsense. Australia as a market is about four to five times larger than New Zealand.

Has it been the fastest selling operating system ever released? Yes it has. At the height of the enthusiasm for the product, did it meet all of the highest expectations that we set? No it didn't.

Q: Are there figures for how many copies have sold in New Zealand?

A: By the time we end our financial year in June there will be well over 100,000 copies of Windows 95 on the local market and that comes from a mixture of what's sold directly to people who've upgraded and copies that are shipped out with PCs. That's pretty satisfactory from our point of view, considering Windows 95 is only one of the operating systems we sell. NT Workstation is the other strong player in that field.

Q: And how is that doing?

A: Extremely well. We're seeing that business grow enormously. Sections of corporates have clearly opted for some of the features Windows NT Workstation provides. That's particularly true of banks and government, where they have looked at the C2 security classification of the NT Workstation and the full 32-bit operating system with superb networking and said, yeah, for the kind of environment we're in, this is what we want to do.

We're about to release version 4.0, which will have the same graphical user interface as Windows 95 . It will make it easy to have both systems operating transparently inside an organisation, and they'll be able to be supported efficiently and effectively.

Q: What is the split between research and development and marketing at Microsoft? The impression I get is that companies such as Apple and IBM have technically better products, but because Microsoft spends so much on marketing, its products sell more. Does Microsoft spend more on marketing than most anything else?

A: No it doesn't. It's easy to say Microsoft is a big marketing machine but that statement really doesn't give any credit to the fact that we're building some great products. The reality is we will spend $US1.5 billion on R&D and we will spend much less than $US1 billion on marketing.

And that statement gives absolutely no credit to the consumer to know the difference. The consumer is voting and that's the thing that counts. And I believe they're smart as well, which that statement doesn't recognise.

Q: How do you see the New Zealand market at the moment? There seems to be a lot of feeling that it's quite flat.

A: It is. But different parts of the world seem to be doing okay. Microsoft US is growing enormously and we're also growing strongly in New Zealand. We're growing at about 35% currently in a year-on-year comparison and that's high growth by anyone's standard. But certainly the market in the last three months has been quite stodgy.

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