Wonder Women in the Rude Boys' Paradise

A typical engineer's office interior looked like an Animal House dorm room: soft-drink cans piled around a computer terminal; a bit map of a nude woman retrieved from a company server displayed on the computer screen; pornographic posters tacked onto the walls; and crude, dirty jokes posted on the outside of the office door. Women who were at Microsoft in those days remember vividly the "German Excel" poster: commissioned by Microsoft's German division, the advertisement featured smoke, leather, chains, and a nearly nude Teutonic dominatrix. It wasn't just the poster that Microsoft women found offensive; it was its apparent endorsement by their employer.

Today in a remarkable transformation, Microsoft has made itself into what is arguably the best place in the business for women to work. Very simply, Microsoft has adopted as a strategy the goal of cornering the market on female engineering talent.

The company guards its hiring data as jealously as it protects its code. One informed estimate puts the total number of women working at Microsoft at more than 4,200 out of a worldwide workforce of more than 19,600. Mike Murray, director of human resources, notes that roughly 32% of Microsoft's U.S. employees are female. Murray refuses to say what percentage of the company's software engineers are female: "We don't give that out." He does say that in 1995 women accounted for 21% of Microsoft's "technical hires," while only 14% of computer science graduates that year were women.

Even more remarkable than the numbers, however, is the undeniable power the women of Microsoft wield in determining the company's future. Through almost an accident of history, the Interactive Media Division, created in a February 1996 reorganization to supersede the Consumer Division, is run by women. Patty Stonesifer, a senior vice president, heads the division; of her five direct reports -- handling responsibilities from the Microsoft Network to kids and entertainment to marketing -- four are women, including Melinda French, a.k.a. Mrs. Gates, who tanked the launch of Microsoft Bob but won the heart of Microsoft Bill. In fact, so prominent are women around the Redmond, Washington headquarters, that the Interactive Media Division is called "the girls' division." But today, it is the girls' division that will decide the boys' fate.

With the corporate PC market slowing to an annual 10% growth rate, Gates is depending on the fast-growing consumer market to propel Microsoft into the 21st century; by the year 2000, industry forecasts say, 50% of U.S. households will own PCs. Recently it is this Interactive Media Division that has been the fastest growing part of the Microsoft empire, ramping up from only 5 or 6 products in 1992 to nearly 70 products in 1995, surging to nearly 1,000 employees, outgrowing its space on the old campus, and moving to its own five-building campus. If the women of Microsoft come through, the division will reach the $1 billion revenue mark in 1998 and chalk up a growth rate better than 20% per year.

In the rawest of terms, it is that competitive challenge, rather than any surge in political correctness, that has spawned Microsoft's transformation. Becoming gender-neutral is not about winning the hearts of women; it's about winning market share. "It's really just smart business for us," says Murray. "It's a way of creating competitive advantage and superior products."

Microsoft understands the nature of competition in the software industry like no other company. Outsiders see the business as a competition for markets and dollars. Microsoft sees it as a competition for talent. The company's approach to engineering and corporate strategy has always been to "pour IQ," as Gates puts it, into a knotty problem or competitive crisis. The company with the most brains wins. In remaking his company into something even a woman could love, Gates has simply added one more weapon to his arsenal in the fight for software engineering and design talent.

It may seem hardly worth the trouble to redefine your company just to make it attractive to a mere 14% of the country's computer science graduates. But it is impossible to overstate the importance of the contest to attract the best talent in the high-tech industry. Ann Winblad, managing partner of Hummer Winblad Venture Partners in Emeryville, California, says, "The secret of Microsoft's success lies in its recruiting." According to Jeff Bezos, founder of the Seattle-based Internet bookstore Amazon.com Books, "A great programmer and just a good one can differ from one another by a factor of 100." With multiples like that at stake, the company with the best men -- and women -- wins. And ultimately, Microsoft is about winning.