You don't have to have the IQ of Bill Gates to figure out that Ashley Highfield has big plans for Microsoft. In the newly created role of UK managing director and vice-president of consumer and online, Highfield now wields more power than has ever before been entrusted to a UK employee. And he intends to use it.
Despite being the largest technology company in the world, Microsoft has been taking a battering of late. The corporation's stock is plummeting; 5,000 jobs have just been axed; its Vista operating system has been widely derided; and its public face has become the hapless geek portrayed by the Apple ads. Such is the extent of the malaise that influential technology experts are even writing blog posts with titles like 'Microsoft is dead'.
However, this is all about to change, in the UK at least, thanks to a wide-ranging rescue strategy that will see Microsoft reborn. While in the US, the company concentrates on taking pot shots at Apple with its 'I'm a PC' ads, on this side of the pond Highfield, who has only been in his new role for a matter of weeks, is planning a quieter and altogether more radical revolution.
Over the next year, his aim is to transform Microsoft's relationship with consumers by overhauling the MSN web portal and relaunching the entire Windows Live portfolio of products and services. Simultaneously, Highfield also plans to ramp up the company's commercial offering in an effort to divert much-needed advertising pounds away from rivals, including Google and Yahoo!.
"I'm not interested in making Microsoft cooler than Apple," he says. "My job is to understand how each of Microsoft's products sit together and how they end up in front of the consumer."
A new vision for MSN
The first phase of Microsoft's growth strategy centres on plans to reinvent MSN as the web's leading content portal. Given Highfield's role as architect of BBC iPlayer and his recent stint at Project Kangaroo, this means only one thing: video. In fact, Highfield has grand plans to boost the amount of audio-visual content across MSN, including the launch of an internet TV service that could see hours of programme content available on demand.
The Competition Commission's decision to block Project Kangaroo, the internet TV joint venture between BBC Worldwide, ITV and Channel 4, has left the nascent online video market wide open. Highfield believes this spells a significant opportunity for Microsoft, and is already talking to Kangaroo's stakeholders about picking up the pieces.
"I am in conversation with broadcasters and content providers to see what Microsoft could do by partnering in this area," he confirms. "We need to work with broadcasters as equal partners, to love their content, their programme brands, their channel brands and make sure they get full accreditation without trying to slap the MSN brand on top and take too much credit."
Highfield's previous role as chief executive of Project Kangaroo means Microsoft is now perfectly placed to resurrect the initiative under a different guise. By striking content partnerships with broadcasters rather than inviting them in as stakeholders, an MSN-branded internet TV service could avoid regulatory scrutiny. And one thing is certain: Highfield wants to move quickly.
"It would be really bad news for the market if the decision to block Kangaroo were to cause a long-term hiatus and take away the impetus that the iPlayer generated in moving long-form video consumption to the web," he says.
Highfield, who has spent most of his career within the broadcast industry, is convinced there is a market for TV content online. Despite his sudden decision to jump ship from Kangaroo after just six months in the job, he still claims to be surprised and disappointed that it has been stopped in its tracks.
"In my memoirs, I'll write that I saw the Competition Commission's decision coming and that I made the right move at the right time but I was fully expecting it to go ahead," he claims. "I joined Microsoft because of the pull of this job, not because I was pushed or had doubts about Kangaroo's future."
As it turns out, Microsoft had been in secret negotiations with Project Kangaroo about selling advertising around the internet TV service. Consequently, the internet giant already has the infrastructure in place to make its own on-demand initiative a commercial success. Given the 16.8 million unique users that already visit MSN each month, Microsoft arguably has a better chance to make a success of internet TV than Kangaroo ever did.
Windows of the future
The fact that revamping MSN is just one part of Highfield's vision for the future of Microsoft indicates the sheer scale of his plans to transform the company. As you would expect from the man behind the BBC's world-beating digital services, the second part of his strategy is equally ambitious. It involves refining Microsoft's Windows Live suite of products, which includes Live Search, Live Messenger, Live Mail and the Live Spaces social-networking platform.
While these services are very popular, consumers tend to use them in isolation with little idea how they fit together. There is also still confusion over the Windows Live brand, which was introduced to little effect in 2006 to unify standalone services such as Hotmail and MSN Messenger. Highfield plans to revamp these services and unite them to make them central to the online experience.
"Microsoft has always been an innovator but has sometimes lacked valuable consumer insight," he explains. "Consequently it has been guilty of innovating for an audience that wasn't always there."
In order to re-establish Windows Live as a set of services with a unique consumer proposition, Highfield plans to go back to the drawing board, making each product easier to use. "Microsoft has always wanted to improve its services by adding features but, in the consumer world of extreme cacophony, less is more," he says. "However, there is a role for products that reveal additional functionality as users get more au fait with them."
Despite the decline of portals such as AOL and Lycos, MSN will continue to sit at the heart of Microsoft's online offering, providing consumers with a jumping-off point for their internet experiences. "People still want a one-stop shop - somewhere they can go to access their emails, check for IM conversations, get the news and move on," says Highfield. "The portal is even more valuable than it was a couple of years ago because of the amount of services available. You can go mad running around trying to keep up with your work email, Facebook, Twitter, Flickr, etc."
The constant stream of products emerging from Microsoft's Redmond headquarters makes the branding challenge a significant one. However, consumer demand for access to Microsoft services from smartphones and other wireless devices makes it crucial for Windows Live products to have a clear USP. "Convergence has created the need for a distinct Microsoft brand across all platforms," says Highfield. "By the end of this year and going into next, all of Microsoft's products will look radically different and will have moved on to the next level."
If Microsoft's $300 million (£208m) 'Life without walls' campaign signalled a new era for the software giant, then it's only the tip of the iceberg. As well as overhauling MSN and Windows Live Highfield, whose role also spans sales, marketing, business development and partnership, plans to step up promotional strategy. Advertising will play a key role over the next year as the company looks to boost brand awareness in the face of recession.
Advertising that counts
The final and arguably most crucial phase of Highfield's rescue strategy centres on strengthening the commercial side of the business. With budgets cut across the board, Microsoft needs to ensure it is competing more effectively for ad spend. It already has a strong display business, but trails far behind Google in search. Brands are rapidly shifting spend into more accountable forms of digital marketing and Microsoft must act quickly to avoid missing out.
"Microsoft takes the monetisation of its services incredibly seriously, and in a recession I want to make sure we're offering a simple, good-value proposition to our advertisers," says Highfield.
Microsoft is already working on an overhaul of its Live Search offering and a partnership with Yahoo! to tackle the might of Google may also be on the cards. However, this is just one piece of the puzzle. Highfield is convinced the way for Microsoft to stand out against the crowd is to become a one-stop shop for online advertising. "Brands increasingly want to buy both display and search as a combined proposition from a single provider," he says. "We are looking to do this in more sophisticated ways so brands can run a single campaign across Microsoft's range of display, search and communications services."
This is nothing new, of course. AOL's Platform-A already acts as a single buying point while Google is rapidly shoring up the display side of its business to a similar end. Despite this, Highfield is convinced Microsoft has the edge. It already has one of the UK's largest media sales teams offering brands a mix of display, search, mobile, in-game advertising and web analytics, a combination that Highfield claims ticks all boxes. "We can offer a level of engagement that's unmatched anywhere else," he says. "By making the sum of the parts greater than the individual elements, we can take share from our rivals in a recession."
Despite spending the best part of a decade at the BBC, Highfield has a sharp commercial brain. During his time there he was a constant thorn in the side of the ad-funded internet giants, who continually complained that the BBC's online operations were too popular. Clearly, Microsoft would love to have the same criticism levelled at it. And with Highfield on board, it just might.
Ever since Bill Gates, Microsoft's co-founder and guiding light, left the company last year, the consensus has been that Microsoft is floundering. However, Highfield's appointment is a signal that, in the UK at least, a corner has been turned. Microsoft now has the most influential man in digital media in what is arguably its most important role.
I'm a PC too. I'm Chris Ward, UK commercial director
Ward heads up all of Microsoft's UK commercial operations. He claims the company has seen more changes in the past 18 months than in the past 10 years. This has been largely due to the acquisitions Microsoft has made. Thanks to a recent overhaul of the Advertiser and Publisher Solutions (APS) group, these businesses have now been integrated into Microsoft's commercial offering. "We are now able to offer engaging end-to-end marketing solutions to brands and their agencies," says Ward.
So am I. I'm Jana Eisenstein, director of publisher sales
Publishers are increasingly looking to maximise the value of their inventory, and brands are looking to deepen their relationship with consumers. Eisenstein's role is to act as the glue to bind them together. "The APS publisher sales division provides advertisers with access to a network of publishers and the tools to enable them to launch more efficient, better-targeted campaigns," she says. "In short, my job is to help Microsoft's publishers and advertisers engage consumers."
And me. I'm Chris Maples, sales director
Maples oversees Microsoft's advertiser and agency-facing businesses, including search and premium display, as well as its frontline sales force and account management teams. "There has been a shift from branding towards more performance-based media," he says. "We're trying to demonstrate to brands that it's not just about clicks and conversions, but that the best way to deliver ROI is to achieve incredible standout and consumer engagement."
I am too. I'm Nickie Smith, marketing director (APS)
Advertisers are finding themselves in an increasingly challenging climate due to budgetary pressures and changing consumer behaviour. "We see this as an opportunity for brands, and are working hard to instil them with the confidence to invest online," she says. "Consumers are trying to escape the economic gloom and are looking for engaging online experiences from advertisers. Through research and case studies, my job is to provide brands with the insight to maximise the power of their communications."