MICRO-MANAGING

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Amid continuing antitrust woes, Microsoft Corp. is forging ahead with its vision for Web-distributed software and services -- or Next Generation Windows Services, dubbed NGWS.

Microsoft executives on June 22 will outline details of the strategy during Forum 2000, a briefing for media, analysts and software developers.

Originally scheduled for June 1, the briefing was postponed when it became clear that a final decision in the company's long-running antitrust case was imminent (AA, May 29). That decision came on June 7, ordering Microsoft to be split into two companies: an operating system company and an applications entity.

Microsoft's NGWS initiative, first touted last fall, is widely considered to be a migration of Windows capabilities and customized applications delivery via the Internet. The strategy is expected to cast a wide net across most of the company's businesses, connecting Microsoft applications and services to the Internet to fulfill an earlier promise of software that enables consumers and businesses access "anywhere, anytime, anyplace."

But if the Justice Department has its way, Microsoft's elaborate NGWS strategy could unravel. The initiative, expected to constitute a majority of the software giant's marketing focus for its new fiscal year beginning July 1, is largely dependent on the interplay between the Windows operating system and applications such as Office or the MSN online service. NGWS ultimately rests on the assumption that the company will remain whole.

Analysts contend that if a split is enforced and Microsoft loses its appeal, the NGWS strategy would work only if the company is successful in wresting key functions from Windows that will help support Internet-distributed applications.

STAY IS LIKELY

Microsoft filed a notice of appeal on June 13 and asked the U.S. Court of Appeals for a stay on the behavioral remedies enforced by U.S. District Judge Thomas Penfield Jackson's June 7 ruling. Most analysts and observers believe a stay will be granted; but if it's not, NGWS could hit a major snag. Microsoft would then have to abide by the behavioral remedies put forth in the judge's decision, therein affecting the deployment and marketing of NGWS.

"Given how excessive and burdensome the government's plans would be and the immediate and irreparable harm they would cause to Microsoft, we believe the courts will issue a stay," said Mark Murray, public affairs director. He said, for the most part, the government's plan doesn't deal with issues of advertising and communications. But, he added, "NGWS certainly does shape the image of the company."

And, Mr. Murray maintained, "There's no question that the government's plan would have a very immediate impact on our customers, and if it's not stayed, that will have an impact on our ability to do business."

At press time, while the question of a stay remained open, Microsoft was working fast and furiously to replace the clumsy NGWS acronym, though executives said the name of the new brand is not likely to be trumpeted on June 22. Insiders say no less than six monikers were under consideration (AA, June 12).

Microsoft's agency of record McCann-Erickson/A&L, San Francisco and New York, and FutureBrand, the agency's branding unit, are leading the effort, in conjunction with consultants Landor & Associates, Seattle; Interbrand, New York; and possibly others.

Internally, Microsoft advertising, marketing and brand executives are weighing in on the process that is being led from the top by Mich Mathews, recently promoted to VP-marketing.

One name that was scrapped -- Wings, short for "Windows Next Generation Services." Microsoft advertising executives declined to specify when the name and positioning would be finalized and how, or even whether, the brand will segue with the company's "Business Internet" campaign, launched late last year.

NOT FOCUSED ON COURT CASE

"We're focused on simplifying and conveying what NGWS is all about and conveying the benefit of the technologies . . . boiling that down," explained Mike Delman, general manager-advertising and events, adding, "The court case is not what we're focused on."

Mr. Delman, one of several executives who sits on a streamlined brand council, maintained that the group and other colleagues are putting the bulk of their energies into positioning forthcoming products and services and a consumer-friendly face on advertising. A corporate image effort has been running on TV for a couple of months using more humor and light-hearted scenarios.

Asked about Microsoft's ad strategy during what's likely to be a lengthy appeals process, Mr. Murray said the open letter-style ads and 30-second TV spots featuring Chairman-Chief Software Architect Bill Gates and CEO-President Steve Ballmer would be deployed at strategic points in the case. Customer testimonials, similar to those in "The Business Internet" campaign, and even the use of employees, "are not being contemplated at this point," Mr. Murray said.

TESTIMONIALS NOT LIKELY

One advertising executive close to the company said that while customer testimonials are often effective, "they're extremely hard to pull off . . . it's hard to get full approvals on them." Such a strategy would use prominent customers explaining how a breakup would affect the technology industry, the economy in general and their own businesses.

Customer testimonials aside, Microsoft may be looking to use another hook -- passion. "Passion" was used in the open letter-style ad that had a one-week run in leading newspapers, breaking on June 9, and a TV :30 with Mr. Gates, both created by McCann.

Besides trumpeting leadership in creating innovative software, the last line of the print ad read: "The future is filled with amazing opportunities, and our passion for improving people's lives through great software is as strong as ever."

Microsoft, say analysts, is likely to harness the concept to help put a more human face on the company's image. They say using employees who are revved up about their work, such as those working on the next-generation videogame console code-named the X-Box, are ideal candidates.

"They have to show they're having fun and believe in what they're doing, despite the antitrust suit," said one consultant.

Meanwhile, some brand consultants say the court battle gives Microsoft a good opportunity to examine its entire brand architecture. Insiders say that Ms. Mathews has quietly approached several agencies, including McCann, to work on high-level branding issues, believed to be beyond the scope of NGWS.

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