CRN Interview: Kevin Browne, Microsoft's Macintosh Business Unit

At Macworld Boston in August 1997, Macintosh loyalists were stunned to see Microsoft co-founder Bill Gates come on stage during the keynote of Apple Computer co-founder Steve Jobs. With Apple's market presence at a nadir, the high-tech luminaries unveiled a five-year pact in which Microsoft agreed to make Mac versions of its key software and invest $150 million in nonvoting shares of Apple stock. That agreement expires this August, and many end users, Apple VARs and industry observers are wondering about the future of the Mac at Microsoft. Kevin Browne, general manager of Microsoft's five-year-old Mac Business Unit (MacBU), last week reiterated the software giant's support of the Mac platform in a presentation at Microsoft's Mountain View, Calif., campus. Browne also discussed the software pact, the Microsoft-Apple relationship and Microsoft's Mac plans in an interview with CRN Managing Editor/Features Russell Redman.

CRN: What was the key message of your recent presentation on the Microsoft-Apple relationship, and why did you hold such a presentation?

BROWNE: The issue is that people have been associating the technology agreement that Microsoft signed with Apple with the fact that we do products for the Mac. And what I wanted to do was to get on the record saying that we actually do these products because they're good business--not because we have a technology agreement with Apple. This August, the technology agreement expires, but I wanted to affirm that we'll continue to support the [Mac platform as long as the business is good.

CRN: So your message was that Microsoft is making Mac products because it's a profitable business, not because the company is bound by an agreement.

BROWNE: Absolutely. I went through in pretty good detail how Microsoft has been on the Mac platform for a long time and has shipped a lot of product. Also, the work that we've done over the past five years has gone far above and beyond the requirements of the technology agreement. That's what [Mac customers should be thinking about, rather than whether there's a technology agreement binding us to the platform.

CRN: In your presentation, you indicated that Microsoft doesn't feel there's a need for a formal software agreement with Apple but that Microsoft would be receptive to discussing one if Apple was interested. Is that correct?

BROWNE: We would be open to talking with Apple about things that apply today. We wouldn't be interested in signing just a renewal of the 1997 agreement because the conditions that prompted the original agreement are no longer present, and our strategic interests are different these days.

CRN: Up until the 1997 agreement, it seemed like Microsoft and Apple had more of an adversarial relationship.

BROWNE: It was absolutely an adversarial relationship. It was just difficult to run a Mac business when the platform vendor wouldn't share information or every time you needed to talk about a [software bug you had to get a bunch of managers and lawyers involved. That made it very difficult [for Microsoft to pursue the [Mac business. Now we have a very tight relationship with Apple, they give us good disclosure on their plans and we talk very in-depth at all levels of the organization about how to make our products better Mac products. So I think both companies are at a point right now where we're saying, 'Maybe we'll sign an agreement and maybe we won't. But we're not anxious about it because things are going pretty well right now.'

CRN: What about customer perception? Would the lack of an agreement between Microsoft and Apple make some customers reluctant to invest in the Mac platform?

BROWNE: I guess that's what I was hoping to address and get on the record. The technology agreement required us to do a few things, but we've done so much more than that. And that's what customers should hang their hats on, not whether there's an agreement. We did what we've done because they were the right things to do for customers. We were never required to do a Mac OS X version of Office--[in fact we were never required to do an OS X version of anything. We were never required to build e-mail and messenger applications or a Mac version of Windows Media Player, and we were never required to build features into the Mac versions of our products that aren't in the Windows versions. All of these things we did because we're trying to make a good business out of it. And that's what we think customers should focus on going forward. If this looks like a good business for us, we'll absolutely continue doing it.

CRN: Are there any talks under way between Microsoft and Apple to have a formal software agreement when the existing one expires?

BROWNE: We have not had any material discussions at all. I just don't think either company is really anxious about it.

CRN: Does Microsoft still hold an equity investment in Apple as part of the terms of the 1997 agreement?

BROWNE: I don't believe we still have that investment. Five years is a long time. They were nonvoting shares, and it isn't like that had a lot to do with how we approached the business. [A spokesman for Microsoft later confirmed that Microsoft no longer holds the Apple investment it made under the companies' 1997 agreement.

CRN: How does the Mac fit into Microsoft's product plans and its .Net initiative?

BROWNE: The .Net strategy is the overall framework for what everyone at Microsoft is thinking about for the future. Basically, the problem we're trying to solve is how to integrate people with other people, apps with other apps and devices with other devices and empower people with great software anytime, anyplace and on any device. There's a set of people who are using Mac clients and are trying to interoperate with other devices, including Windows-based PCs, Palm handhelds and so forth. We're going to try to make sure that Macs running our Internet Explorer browser and Office productivity suite will have a great experience connecting to .Net services. In fact, many of those .Net services that Microsoft and its partners create will become new features in future [Mac versions of Office. The next level is that you'll be able to integrate with a service that allows you, for example, to do team editing of a document at the same time, where everyone sees all the changes up to date. So that's kind of the way our [Mac product fits in with the rest of Microsoft.

CRN: So, as you indicated in your presentation, Microsoft wouldn't look to create .Net development tools for the Mac?

BROWNE: Correct. We're open to working with Apple to make the Mac a place where you could build .Net-enabled applications, but I don't think we want to do it on our own. I think it would just be too confusing to developers.

CRN: Does that have anything to do with Mac OS X's Unix core?

BROWNE: No, it's more because Apple has its own development proposition. They kind of talk about OS X as a place where you can build great, new applications, they talk about their Cocoa [development frameworks, and they have a list of things they suggest as the way you can approach building an application. For us to come in [with .Net and say, 'forget all of that Cocoa stuff,' I think we'd just create more confusion than benefit.

CRN: What are some of Microsoft's product plans for the Mac in the near term?

BROWNE: Office v. X, the first native Mac OS X version of our Office suite, hit the streets in November. So far, sales in the U.S. seem to be pretty good, though there seems to be a little bit of softness in Europe and Japan that may be due to economic factors. We haven't announced any specific [sales numbers yet. What we're doing right now is some research to assess how many people are actually using OS X all day, every day so we can figure out how well we're doing and have a standard to measure ourselves against. To help continue the momentum we started with the [Office v. X launch, we will release a service release of Office--you can call it 'SR 1'--that will be available free for download from the Microsoft Web site. It will feature over 1,000 behavioral tweaks, bug fixes, performance improvements and some new features that address customer concerns about the product. And we think this [release will be the product that people will really want to buy.

CRN: Why is the Mac platform important to Microsoft?

BROWNE: It's important to us because it's important to our customers. There are about 10 million Mac users who use Microsoft software today, and many of them at the highest end of the scale--the enterprise customers, or large organizations--come to us and say Microsoft has to take care of our Macs as well as our PCs for us to be a happy customer. And we take that very seriously. So we'll continue to do the [Mac business--all the business that makes sense--today and going forward.

Click here to read a news story on Browne's presentation and reaction from Apple VARs.