July 12 (Bloomberg) -- Microsoft Corp.’s Julie Larson-Green body-slammed a 6-foot-6 colleague who was blocking her exit one day in 2001 when the largest earthquake to hit Washington state in a half century rattled her office.
“When I have a direction I want to go, it doesn’t matter who’s in my way,” said Larson-Green, 51, who started at Microsoft 20 years ago and is the company’s highest-ranking female engineering executive.
Larson-Green’s obstacles are about to get bigger, now that she’s been put in charge of all hardware at the world’s largest software company. As head of the devices and studio engineering group, she is responsible for Microsoft’s push into gadgets such as tablets, which so far is faltering as consumers and businesses shun the company’s nine-month-old Surface computer in favor of the iPad from Apple Inc. and mobile machines from Samsung Electronics Co.
Larson-Green is at the center of a sweeping overhaul by Microsoft Chief Executive Officer Steve Ballmer, unveiled yesterday, which is intended to streamline management and rev up growth in areas like mobile devices. The task is urgent as Microsoft, with its Office and Windows software products dominant on personal computers, deals with a PC slump caused by consumers’ increasing preference for mobile devices.
Jensen Harris, the Microsoft software designer who Larson-Green shoved out of the way during the 2001 earthquake -- even though she’s about a foot shorter than he is -- said she makes quick work of any obstacle. The temblor “was my first experience with Julie,” said Harris, who has worked for her for the past 10 years overhauling Office and Windows. “Julie has this immediate ability to cut through things.”
Microsoft is increasing its bet on hardware as its revenue growth has slowed and its stock price has underperformed the Standard & Poor’s 500 Index in five of the past six quarters. Tablets, a market where 3.7 percent of machines run Microsoft’s Windows, are poised to outsell PCs by 2015, market research firm IDC said.
Yet Microsoft’s move into hardware has been shaky. The Redmond, Washington-based company’s Surface tablet, which is its first-ever computer and the only piece of hardware Larson-Green has worked on, sold just 900,000 units in each of Surface’s two quarters on the market, according to IDC.
Larson-Green will also have to help Microsoft’s Xbox video-game business, its more established hardware effort, recover from missteps in the unveiling of its latest console, the Xbox One. The company recently angered gamers by announcing a requirement to connect the Xbox One to the Internet daily and by placing some restrictions on transferring used games and then reversing course. The device, which goes on sale in the fall, costs $499, or $100 more than its rival from Sony Corp.
The newly anointed senior leaders will meet weekly to make sure efforts are coordinated, Ballmer said in an interview.
“You have to agree on what the cadence is on which devices and services,” he said.
Microsoft declined to make Larson-Green available yesterday to discuss her specific plans for hardware. In an interview last month, Larson-Green said she’s fascinated by all manner of devices -- she had a Samsung Galaxy phone on her desk and an HTC Corp. One in her bag. She also listed wearable technology and living room devices as interesting and new challenges for Microsoft.
“Technology is going to be everywhere and we want to be relevant to your life, and so we are going to be everywhere,” she said.
Other technology executives said Larson-Green faces a tall order overseeing hardware at a company that still gets most of its revenue from software. Rene Haas, vice president and general manager of computing products at Nvidia Corp., which makes the chip for one of the Surface tablet’s two models, said while Larson-Green is capable, “It’s not a small task for anybody.”
Maria Klawe, a Microsoft board member and president of Harvey Mudd College, said Larson-Green will do fine. “Software-hardware integration is one of the really exciting things going on in the world right now and you really need people who can cross that boundary,” said Klawe.
Larson-Green has taken on huge product challenges before. She helped spearhead a radical redesign of Microsoft’s flagship operating system, Windows 8, which was released in October and aroused the ire of some longtime users. Critics said Windows 8, which is designed to work with touch-screen devices, came too early for a PC market that’s still dominated by machines without touch-screens.
Larson-Green took the view that the greater risk was staying on a path of incremental updates, said Harris.
“There are two roads you can go on. Do you have the cojones to go toward the future?” Harris said. “Julie had the confidence.”
Wes Miller, an analyst at market-research firm Directions on Microsoft, credits Larson-Green with responding to user feedback with Windows 8’s latest version, dubbed Windows 8.1, which adds features like improved search and a Start Button.
“She’s doing a reasonably good job,”he said.
Larson-Green, a native of logging town Maple Falls, Washington, joined Microsoft in 1993 and rose through the ranks. She became a vice president in the Office division in 2006.
By 2009, Larson-Green was in charge of the look and feel of Windows -- and closely watching the threat that new types of devices could pose to Microsoft and the PC industry. At the 2009 Consumer Electronics Show in Las Vegas, she saw touch devices and e-readers that were adding computing functions. It was clear consumers would prefer portable touch devices to desktop computers for many tasks, she said.
The rest of the Windows team also saw their software falling behind because of trends like mobile and touch, Harris said. While Microsoft had more than 90 percent of the PC operating system market, “we are already the underdog,” he said.
So Larson-Green and her team opted to redesign Windows to suit touch-screen devices. Still, it took three more years until Windows 8’s release. Meanwhile, Apple released the iPad in 2010, making it appear that Windows 8’s strategy was a response to Apple.
Larson-Green and her team kept plugging away and last November, Ballmer promoted her to head Windows engineering following the departure of executive Steve Sinofsky. Ballmer praised Larson-Green’s ability to play well with others, a skill he said was critical to Microsoft’s future success.
Larson-Green put that skill into practice last fall when she convened design and program management executives from various products and plied them with pricey wine. Then she pitched teams like those overseeing the Bing search engine on putting their other priorities on hold to build for Windows.
With a 15-minute conversation, she won over Derrick Connell, a Bing vice president who had never met her before. He gave Larson-Green 20 percent of his staff for six months to build the new search app in Windows 8.1. It was a big project on a short time frame.
“I trust that you will do it,” Connell said she told him. “We’ve worked harder to make sure we delivered on that trust.”
Microsoft will now have to move even faster and get things right the first time, Larson-Green said. She said she “hates that stereotype” that has trailed Microsoft for decades -- that the company only gets it right on version 3.0.
“You really only get to sell something one time,” she said. “We shouldn’t do it unless we think it’s great.”
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