By all accounts, Microsoft is at a crossroads. From its birth in 1975, it has swelled from a one-product tech company to a multiplatform software and services entity that earned more than $60 billion in revenues last year, more than Apple and Google combined. And while it enjoys vast reach and market share, it now battles rivals at nearly every turn, particularly in search, mobile, and entertainment. In its most recent earnings report, Microsoft posted its first ever year-over-year quarterly revenue decline, and CFO Chris Liddell forecasted a “slow” recovery due to economic conditions.
Of late, the company has also faced criticism for disparate branding and advertising that missed the mark. But this year it is gearing up for the launch of its new operating system, Windows 7. Coupled with a round of ads that take Apple to task for its prices during a protracted recession, as well as positive growth in areas like Xbox, Microsoft is promising a year of rebirth.
It's into this junction that Simon Sproule stepped when he accepted the post as VP of corporate communications in March after a 17-year career in automotive communications. Within his first two weeks there, the 40-year-old traded in his “iPod and PlayStation” to get completely “kitted out” with a new PC, an Xbox, and a Zune.
“I've got a steep learning curve,” he admits. “There's some disadvantages to that, but I've got advantages over some who have only been in technology. I've seen another industry, and I've seen one that is very consumer-focused. I think Microsoft was interested in that consumer connection.”
The journey commences
Sproule began his career selling Fords from a London dealership in the early 1990s, but found his way into the press office only two years later, at a time when the job “was done mostly on the phone.”
He grew up in England with a passion for cars, in part because his grandfather worked in auto sales; today his brother runs a UK dealership as well. Sproule spent more than a decade at Ford working on launches, such as the 30th anniversary of the iconic Ford Transit van in Europe and the “baby Jag” X-Type in 2001. He joined Nissan in 2003, directing North American communications from Southern California, before becoming head of global communications and IR. For the past five years, he's shuttled around the globe, and worked the bizarre hours necessary to communicate with the rest of the world when stationed in Tokyo.
“I've really shifted from only being interested in cars to having an interest in communications,” he says. “It wasn't a huge leap, although I don't underestimate the level of learning I'm doing right now.”
Sproule replaced Larry Cohen, who had held the post since 2002, but left last year to become chief of staff for company cofounder Bill Gates. Microsoft's GM of corporate communications, Tom Pilla, filled the post in the seven-month interim.
“This is a very important year for us,” says Mich Mathews, who oversees Microsoft's central marketing group, which includes the company's PR, advertising, events, packaging, and research. “We are launching a new brand of Windows, which is tied incredibly close to the brand of Microsoft.” If a Windows product does poorly, it “drags down the Microsoft brand,” she adds.
“Frankly, we've had a rocky time [with Vista],” she admits, but the launch of Microsoft 7 offers “an opportunity to do a reset with consumers.
“There's almost a relaunch of the company into people's homes,” Mathews adds. And Sproule will help “shepherd” that process and “shape that conversation.”
Sproule recognizes the situation in which Microsoft finds itself, but talks strictly in positives. When asked if the company needs to do a better job tying its varied products together under one brand message, he notes all the “cool” discoveries he's made about its offerings in the past two months.
“When you're inside the company and start playing with all the products, you realize there is a connection,” he says. “It is a vision that's being realized. That story needs to be told perhaps in a different way… and it's how to connect that technology with consumers in a more emotional way… so they think, ‘That's just what I want in my life.'”
“Simon's challenge is to preserve what we have around the commercial space… and being relevant in people's homes,” says Mathews, who doesn't underestimate his task. “You can't wave a flag saying, ‘We're relevant.' He has a very tough job.”
A fellow Brit, Mathews joined Microsoft from GM in 1989, and later moved stateside to help build out what would become the corporate communications function in the early 1990s. Pilla, who joined Microsoft in 1996 and was a part of Mathews' early team, recalls it comprised less than 10 people.
“When I joined the company, it largely didn't market itself… We didn't have a narrative,” notes Mathews. This was, of course, before the revolution of the personal computer and long before the smartphone, she points out.
PR's rising prominence
Today, the company heavily invests in PR. “We don't use PR as a press function,” says Mathews. “We regard it as strategic messaging, positioning, and a truth-telling function. We bring PR in super early, before we've created a product.”
Sproule now oversees a global communications staff of around 500, about 70 of which sit at the company's headquarters in Redmond, WA. The group must navigate a huge product roster and a range of disparate audiences “from your parents to the pointiest head developer,” says Mathews. Still, she believes Sproule is the right communications professional for the undertaking.
“He's a guy who's very quick on his feet,” she says.
By and large, those interviewed stress Sproule's smarts, charisma, and honesty as his crucial attributes.
“He's a super smart guy who has been really soaking it up like a sponge,” says Pilla. “The thing that sets him apart is that he's very poised… and very modest. He… has a real confidence that the team finds reassuring.”
Dutch Mandel, editor and associate publisher of AutoWeek, worked with Sproule for more than a decade in the auto industry and credits him with handling a scoop-driven auto press, as well as his bosses, in an evenhanded and “no bullshitter” manner.
Mandel cites the 2007 launch of Nissan's GT-R as an example of Sproule's acumen.
“It is a halo product that every car magazine wants to get its hands on first,” Mandel explains. “He's got to balance that, and he did it with a deftness and touch that few others could pull off.
“Here's a guy going from the car industry, which is the most complicated, convoluted consumer product, to the computer industry, which is the most complicated, convoluted consumer product – it's brilliant,” he adds. “If there's anyone that can lasso that anaconda, [Sproule] can, because of his want and willingness to build bridges.”
Sproule already has some ideas for Microsoft.
“You have to start by talking about the products as an ecosystem,” he says. “The danger is that you launch things in isolation.
One of the opportunities is to launch things together as part of a bigger story… so you have the underlying story that this is part of a bigger thing. That's something I'm already in meetings and discussions on.”
His biggest launch this year will be Windows 7, which is already out in testing form. “That's fundamental for the company,” says Sproule. “The operating system is what drives everything.”
While Sproule won't talk specifics on Windows 7 launch strategies, he says Microsoft is highly focused on reaching customers in all the various channels where information is now gathered, rather than solely through the tried-and-true tech press.
“I think what I sense in the company is a strong desire to speak effectively beyond the echo chamber,” Sproule says. “A lot of consumers aren't reading technology publications or following technology blogs. They're consuming more general media.”
And the audience for Windows is vast: consumers, but also businesses and the developer community.
“A product like Windows… yes, we have some audiences we are more focused on, but... it's a product that's got to appeal and be useful for… millions and millions,” explains Sproule. “It's really about identifying the features, and what's unique, new, and interesting, and then leverage that to the right audience.”
Tech blogger and former Microsoft employee Robert Scoble, who recently joined hosting site Rackspace, suggests Sproule will need to try something new if the company hopes to recapture the interest of early adopters, in particular.
“Microsoft is still the dominant operating system and office-tools vendor in the world… it's a great position of privilege,” he says. “[But] for early adopters… I think Microsoft is just a little bit boring.”
Scoble, who worked for Microsoft from 2003-2006 as a “technology evangelist,” interviewed about 500 employees as part of the founding of its Channel 9 project. He suggests the company leverage the power of its 90,000 employees, as well as its relatively open culture.
“Microsoft has far more bloggers and far more openness,” Scoble adds. “Microsoft should use that to its advantage PR-wise and build [a] new, interesting product movement that Apple is just going to have trouble doing.”
Strong story to tell
Sproule believes the strongest PR tool he has is “storytelling.”
“People want an emotional connection with a brand or a product,” he says. “I think that has always driven loyalty and purchase.”
While he works to tell those brand stories, Microsoft rivals continue to present threats. “We've got competitors in every area of our business, and they're often very different companies,” admits Sproule.
“It's about telling your story effectively across the business,” he adds. “It's not whether we're ‘cool' or ‘not cool.' It's about connections and making a bond with consumers. A lot of this… is about challenging perception.”
Frank Shaw, president of the Microsoft account at Waggener Edstrom Worldwide, the company's corporate AOR, believes Sproule's expert storytelling abilities will be an asset.
“Microsoft has an enormous amount of stories to tell because of the breadth of its business, and making sure you… tell the right stories at the right time is a challenge,” says Shaw, who has worked on the account for 14 years and helped launch Windows XP in 2001. “I think [Sproule] is really thinking about creating emotional resonance with a variety of brands… and making sure the right audiences are communicated to in a way that reinforces not just a specific product attribute… but also creates an emotional connection.”
Looking forward, Sproule says he hopes the story that is told about Microsoft is one of “a company driven by passion; a company that has incredible depth and talent; a story about a company innovating in more ways… a story that has a stronger emotional connection with the end users.”
Sproule's career history:
Microsoft, VP of corporate comms
May 2003-February 2009
Nissan, Various posts, including VP of corporate comms, North America, and his most recent position in Tokyo as VP of global comms and IR
Ford, Held various posts beginning with Ford of Europe in the UK doing internal communications. He went on to roles with Ford Truck, as well as stints as VP of comms for Aston Martin, Jaguar, and Land Rover, North America (when these brands were all owned by Ford).
Microsoft's ‘Big Three'
The software giant works with a number of PR firms, but this particular trio of agencies has dominated its communications work
Mich Mathews, head of the central marketing department, including advertising and PR, notes that the company has “disproportionately invested in PR. I think that we are, outside of the White House, one of the biggest users of PR. That's because our business is word of mouth.”
Sproule notes that Microsoft relies on its agencies to “constantly bring that fresh perspective.”
Length of relationship: 25 years
Lead on account: Frank Shaw, president of Microsoft account, worldwide
Agency staff working on account: 300-plus
Key business: corporate AOR, Windows, search (MSN), mobile business, server and tools, business division (Office); Hong Kong subsidiary; Europe trustworthy computing
“[Sproule] is approaching it from a holistic standpoint,” says Shaw. “[He thinks], ‘We have these communications assets. Some happen to sit in my building. Some... in the agencies. We need to call in the best of those at the most appropriate time.'”
Length of relationship: 13 years
Lead on account: Tim Fry, EVP
Agency staff working on account: 200-plus
Key business: Connected TV umbrella, including Windows Media Center and Microsoft Mediaroom; automotive business unit; communications sector; small and midsize business group; identity and security; corporate AOR in EMEA, Russia, Poland, Ukraine, and Malaysia.
“Microsoft does not treat agencies as purely arms and legs,” Fry notes. “It relies on its agencies to have a seat at the table when it comes to creating its strategy. That's the sign of a great relationship, when a client has the respect for its agency to bring them in to some of the most difficult decisions they have to make.”
Length of relationship: 15 years
Lead on account: Pete Pedersen, global tech chair
Agency staff working on account: 200-plus
Key business: Xbox and Zune; worked on Vista launch; APAC, regional corporate PR; various corporate, tech, and citizenship work in the UK, Italy, and Germany
“None of the agencies have taken a rest-on-your-laurels approach,” says Pedersen. “When we compete, we compete hard on the playing field… When the pitch is over… there's a tremendous amount of collaboration… It's the only way.”