Guanxi (The Art of Relationships): Microsoft, China, and the Plan to Win the Road Ahead - Softcover

Buderi, Robert; Huang, Gregory T.

Softcover

ISBN 10: 0743273230 ISBN 13: 9780743273237

Publisher: Simon & Schuster, 2007

Synopsis

The story of how Microsoft and China teamed up to create the future of computing will find an ongoing audience among those planning to do business in China, as well as among students and teachers of business, computing, world trade, and international relations.

About this title

About the Author:

Robert Buderi, a Fellow in MIT's Center for International Studies, is the author of two acclaimed books, Engines of Tomorrow, about corporate innovation, and The Invention That Changed the World, about a secret lab at MIT in World War II. He lives in Cambridge, Massachusetts.

Gregory T. Huang is a features editor at New Scientist and holds a Ph.D. in electrical engineering and computer science from MIT. His writing has appeared in Nature, Wired, Technology Review, and other publications. He lives in Cambridge, Massachusetts.

Excerpt. © Reprinted by permission. All rights reserved.:

1

Beast from the East

November 8-11, 2004

This is a new kind of manufacturing in China. Not just shoes, socks, baby strollers. Now we manufacture MIT students, papers, and software.

-- HARRY SHUM, MANAGING DIRECTOR OF MICROSOFT RESEARCH ASIA

Half a world away from the calm beauty of Puget Sound, there's a lab where Bill Gates's software dreams come true. At Microsoft Research Asia, the drive to succeed is as intense as the traffic that roars by its front door in unbridled fury. If the software megagiant's other facilities around the globe seem idyllic, this one, in Beijing, is pure street. Microsoft's mantra here: work hard to get in the door; work harder to survive; then work even harder because the real work -- that of creating the global future of computing -- is just beginning.

If you find it hard to root for Microsoft, you've probably never met Harry Shum. The Beijing lab's managing director is hearty, engaging, and quick to make jokes. In his late thirties, he's also surprisingly young. "This is a new kind of manufacturing in China," he smiles, waiting outside his office. "Not just shoes, socks, baby strollers. Now we manufacture MIT students, papers, and software." His longtime colleague, HongJiang Zhang, walks by and concurs. Cultivating talent, he says, "is another level of 'Made in China.'" Zhang, who's a little older than Shum and initially comes across as more reserved, heads the Advanced Technology Center. An offshoot of the research lab housed in the same building, this first-of-a-kind division was created to accelerate the movement of the lab's technologies into Microsoft's product pipeline -- for China and the entire world.

Together, Shum and Zhang lead a nearly 500-strong organization that looks like a typical corporate lab but feels like a hungry start-up. Come in at almost any hour and you'll find scores of students -- in addition to their staffs, the two groups support some 300 interns at any time, most from Chinese universities -- tooling away on projects jointly supervised by their professors and Microsoft researchers. It's a place where 10,000 resumes arrive in a month and interns spend some nights on cots next to their cubicles. Add the buzz of Mandarin conversations, the window views of Beijing's sprawl, and the hint of cigarette smoke, and you are constantly reminded: this isn't corporate U.S.A. anymore.

Every week is busy here -- but one particular week in early November 2004 was special. The events packed into that whirlwind week spoke to every level of the company's strategy in the Middle Kingdom -- and to the all-out, breakneck pace of global innovation today. To celebrate the sixth anniversary of the Beijing lab's inception, Shum and Zhang entertained a host of distinguished visitors from around the world. The dignitaries included their superiors from Microsoft Research headquarters in Redmond, Washington: Dan Ling, vice president of research, and his supervisor, senior vice president Rick Rashid, one of a handful of Microsoft executives who report directly to Gates. Also on hand were notables from the lab's technical advisory board, which encompassed some of the biggest names in computer science, among them Chuck Thacker, winner of the 2004 Draper Prize, a $500,000 award considered by many to be engineering's top honor; Jitendra Malik, chair of the department of electrical engineering and computer science at the University of California, Berkeley; and Victor Zue, co-director of the Computer Science and Artificial Intelligence Laboratory at the Massachusetts Institute of Technology. In addition to a series of advisory board meetings, the frenetic week would include a Faculty Summit of 207 professors from throughout Asia, many of whom collaborated with the lab, and the Computing in the 21st Century conference that was co-sponsored by Microsoft and the National Natural Science Foundation of China.

On an overcast Wednesday in the midst of this hectic week, two large meeting rooms down the hall from Shum's office overflowed with animated conversations and dozens of research demos. Jetlagged vice presidents, technical advisors, professors, and other studious-looking visitors milled around perusing the demos while eating personal pan pizzas catered by a nearby Pizza Hut. Microsoft demos are legendary: mastering the art takes technical know-how, showmanship, and a clear understanding of why a project is important to the company. A good demo can erase months of frustration and get you noticed. That's why the Beijing researchers had been living and breathing this stuff for months. Eager to impress, some were nervous and struggled with their English, while others pulled it off without a hitch.

To Microsoft, what was in these rooms portended the future of computing -- and which competitors the software superpower was lining up in its sights. Target number one, which would loom ever larger in the crosshairs over the coming year: Google. An entire wall of demos highlighted smarter Internet search tools designed to take users right to where they need to go for answers instead of giving them a bewildering list of links, and to provide more highly targeted Web advertisements based on the exact nature of a person's search query. These efforts aimed to derail the Mountain View, California-based search company, whose faddish popularity once led Gates to quip, "There's companies that are just so cool that you just can't even deal with it."

Almost as urgent a competitor: Sony. The Beijing lab played a growing role in Microsoft's push for new kinds of graphics and interfaces to help it win the digital entertainment space over the consumer electronics giant. One of the more curious-looking demos employed a camera to track human faces, a key part of the next-generation interactive video games Microsoft envisioned. "PlayStation 2 already has something like this for motion, but not faces. We need something in Xbox," said researcher Dongmei Zhang, referring to Microsoft's video-game platform, which was slated for a major new release called Xbox 360 in late 2005.

The third company in Microsoft's sights: cell-phone maker Nokia. Software for mobile devices was still a relatively small business for Microsoft. At the time of the meeting, the company's Windows Mobile operating system had just surpassed Palm's in conventional PDA market share, but still trailed Nokia's system significantly when it came to cell phones and mobile e-mail devices. To this end, another set of Beijing demos showcased software that enables wireless videoconferencing and "seamless roaming" -- so that any cell phone or handheld organizer can provide voice, video, or data communication anywhere in the world, anytime, on any network.

Increasingly, the Beijing lab was where the action was in all these battles -- and the technical advisory board seemed impressed by the show. "They're doing really first-class research," said MIT's Zue, an advisor to the lab since its inception. After an hour of seeing demos and asking questions -- some superficial, but many complex and detailed -- the board retreated to a large room on the sixth floor for a private, closed-door meeting. Inside, the air was thick with anticipation. Researchers guzzled tea and coffee as they exchanged pleasantries. As technical assistants scrambled to get audiovisual systems up and running, Microsoft's top research brass, Rashid and Ling, took seats front-row center, flanked by other high-ranking staff and the advisory board. The room could seat seventy, but only half the chairs were filled. About 25 researchers sat in, some from Microsoft's main lab in Redmond, most from the Beijing lab. It was like a wedding, where the guests of the bride and groom occupy pews on different sides of the church: for the most part, Redmond and the States sat on the left side of the room, Beijing and China on the right.

The board had gathered, together with the lab's leaders, to discuss competitors and give more detailed feedback and criticism on key lab projects than was possible in the demo rooms. Harry Shum, a people person, kicked off the meeting by introducing all the visitors by name. He then called attention to a couple of new faces brought in from the States as assistant managing directors of the lab: speech expert Hsiao-Wuen Hon, who had done both research and product development for Microsoft in Redmond, and graphics guru Kurt Akeley, a co-founder of Silicon Graphics, who had recently finished his long-delayed Ph.D. at Stanford (he had taken a leave of absence in 1982). Both were heavyweight hires whose presence bolstered the lab's standing in China and also spoke to its status as a haven for top talent, not just from China, but from anywhere.

Shum then served up a few stats to demonstrate the lab's growing prowess on the global stage. In 2004 it was responsible for 7 papers out of 58 accepted for SIGIR, the world's largest and most prestigious conference on information retrieval (a key component of search), and 5 papers out of 80 presented at SIGGRAPH, the top graphics conference, where the next generation of gaming and entertainment wizardry is often unveiled. No other lab or department came close to these numbers, even those many times larger than the Beijing center. And it wasn't esoteric research, Shum reminded his visitors. To date, close to 100 technologies had been transferred to Microsoft products -- tops among the company's research arms outside of Redmond -- and the figure was growing fast.

After Shum's presentation came technical talks by key researchers on user interfaces, wireless networks, multimedia, graphics, and search -- the lab's five main areas of focus. The talks were all informative and spoke to Microsoft's competitive battles, but one stood out in particular -- and it came back to Google, Microsoft's archnemesis. Wei-Ying Ma, the smooth-talking, cherub-faced manager of the Web search and mining group, spoke with a light Mandarin accent, but his intensity and desire to...

About this edition

• Publisher: Simon & Schuster
• Publication date: 2007
• ISBN 10: 0743273230
• ISBN 13: 9780743273237
• Binding: Paperback
• Number of pages: 320