Microsoft's Big Bet

It was 10:30 p.m. on June 21, and Microsoft Corp.'s top executives were verging on giddy as they gathered in the company's spiffy new conference center. In less than 12 hours, they would unveil .Net, the most important new strategy since the launch of Microsoft's Windows software 15 years ago. For half a decade, Microsoft had been wrestling with how to reinvent itself as an Internet titan with the same indomitable clout it held in the computer industry. Finally, the top brass had the answer: a technology that could link thousands of Web sites together in an Internet-style bucket brigade. With this new software, one mouse click would have the wallop of dozens of steps on the Web today.

Despite the high spirits, Vic Gundotra felt something was missing: drama. The 31-year-old mid-level manager had nurtured .Net since it was a gleam in the eyes of nerdy code writers. He wanted a gesture that would show everybody in the company how important this moment was. Microsoft typically hoists a new flag when a major product is launched, so Gundotra got on the phone and ordered up a vinyl .Net banner to be produced overnight. At 7:30 the next morning he rushed to the flagpoles. Without thinking, he started to lower the flag with Microsoft's Windows logo on it. Steve Cellini, another Microsoft manager, stopped him. It didn't seem right to replace the Windows flag. "We weren't that crazy," Gundotra says. Instead, he chose another flagpole and lowered the banner of Microsoft's BackOffice software.