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The soul of a new Microsoft


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Everything with Allard is about velocity. He drives a Ferrari 360 and a Porsche 911. He bombs down ski runs during the summer on a mountain bike at speeds topping 30 miles an hour. He qualified for the U.S. Nationals race this summer but had to drop out after he was hit by a car while biking around Seattle. "I love that gravity is unforgiving," he says. He even blazes through e-mail, jotting down notes all in lower case: "shift key slows you down," he writes.

His fascination with technology and commerce started early. When Allard was about 12, he wrote an elaborate computer game called Lemonade Stand. The proprietor started with a $5 allowance to buy sugar and lemons. You had to look at weather reports; if you guessed wrong and made too much lemonade, it would go bad and take your investment with it. "If I had half a brain, I would have waited 10 years, called it Sim Lemonade and made a bazillion," Allard jokes.

A B+ student who thrived on math, Allard dove deep into computer engineering at Boston University. He and his future wife, Rebecca Norlander, impressed a Microsoft recruiter enough at an MIT job fair to get two tickets to Seattle for a full round of interviews. (Norlander also works at Microsoft, most recently as general manager of the security business unit.) During one session, Brian Valentine, then a networking manager, asked Allard what he'd want his epitaph to read if he died tomorrow. There was little hesitation: "Go big or go home."

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In college, Allard had become addicted to the Internet. Raw as it was back then, he connected to others with similar interests and had an inkling of the power it held to bring together the masses. But Microsoft had no clue. It had registered microsoft.com as an Internet domain name only a few months before Allard landed, more than five years after Sun Microsystems Inc. registered its name. Microsoft was far more interested in desktop computing than figuring out how to make all those computers work together.

Three years into his Microsoft tenure, Allard was working on Windows NT server software, with no direct reports. Frustrated, he wrote his now-famous memo. Allard wanted Microsoft to figure out what Internet users wanted to do, build tools to help them do it, and become a technical leader before rivals did. "Embrace, extend, then innovate," he wrote. "Change the rules: Windows becomes the next-generation Internet tool of the future!"

That message, along with an e-mail to Gates from Sinofsky, served to awaken the slumbering company. Allard became a star, and Microsoft focused on connecting customers through its server and PC software, crushing Web browser pioneer Netscape Communications Corp. along the way.

But the Net and Microsoft were still an awkward fit. In the late 1990s, Allard was put in charge of a wildly elaborate Web-services initiative dubbed Project 42. The group took its name from the cult classic book The Hitchhiker's Guide to the Galaxy, in which the absurd answer to the question "what is the meaning of the universe?" is: 42.

Allard now says he used the name in part because the group's goals seemed equally absurd. Its roster expanded to an unmanageable 1,500 workers, and the project became a clearinghouse for every Web idea that bubbled up. "We started with the organization first, not the dream," Allard recalls. "It was quickly the answer to everything." Team members sparred over different visions for the Web: Would it be tightly coupled to Windows or open to other technologies? In May, 1999, Project 42 disbanded, collapsing under its own weight.

Microsoft's longtime Windows chief, James E. Allchin, later described the effort as "incredibly ambitious and naive." Allard pondered that barb recently and wondered if it's really a knock. "The only way to change the world is to imagine it different than the way it is today," he says. "Apply too much of the wisdom and knowledge that got us here, and you end up right where you started. Take a fresh look from a new perspective, and get a new result."

Allard took two months off and pondered his next gig. Based on the Project 42 debacle, he knew he had to start small: "The critical lesson was: Crawl, walk, run." A handful of buddies working on an idea to build a video game device needed someone with political clout. Allard still had sway with Gates and Ballmer, so he dove in.

Just like the pre-Internet days, Microsoft was stuck thinking conventionally. Allard's bosses wanted to develop a video game version of Windows and get computer makers, such as Dell Inc., to build the device. But the industry didn't work that way. Hardware makers lose money on console sales and make it back from royalties on games. When it became clear that Microsoft had to enter the console business, building from scratch wasn't his superior's first choice. "I wanted to acquire Nintendo," recalls Rick Thompson, a vice-president who then ran the hardware business. Allard pushed to do the whole project in-house, and Microsoft ultimately vaulted ahead of Nintendo.

Allard's reward for the success of Xbox was being put in charge of finding new multibillion-dollar device businesses, which became the quest to topple Apple's iPod. The enemy in this case is very familiar: Behind Allard's desk is a crystal given to him by his boss, Microsoft entertainment division President Robert J. Bach, upon his 15th anniversary at the company. In the middle sits a photo of Steve Jobs. Always the iconoclast, Allard works on an Apple G5 computer, next to an obviously less frequently used PC. Allard says it's important to learn about the competition.

Allard has surrounded himself with a small posse of loyal colleagues who move with him from project to project. Douglas C. Hebenthal started with Allard 15 years ago on a networking product called LAN Manager. Hebenthal ticks off the big assignments they've shared since -- Internet Information Server, Project 42, Xbox, and now Zune. "In every case in which I work with J, there is a mountain to climb, there is a clear leader, and most folks would see that mountain as insurmountable," he says. "The thing about the guys who work with J is that we never think things are insurmountable. In fact, that's the draw."

Copyright © 2009 The McGraw-Hill Companies Inc. All rights reserved.


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