Microsoft Adds Knowledge Worker Unit

The Knowledge Worker Solutions group, which is setting up shop in Seattle away from corporate headquarters, is spearheaded by Group Vice President Jeff Raikes, a 20-year veteran considered one of Microsoft's top four executives.

The company is hiring 50 new employees to help figure out how to commingle disparate Microsoft products such as Office, Sharepoint Portal Server, Sharepoint Team Services, Visio and Project, said sources familiar with the plans.

"They're trying to take piece-parts and make a whole," one Microsoft source said. The company is also establishing a Knowledge Worker sales force, according to company documents.

Raikes may shed some light on the effort at his scheduled keynote next month at PC Expo.

Other heavy hitters working with the group include Ted Johnson, corporate vice president of the business tools division, and Steven Sinofsky, senior vice president of Microsoft Office. Johnson co-founded Visio, a maker of diagramming and flow-charting tools which Microsoft bought in 1999. The new group's home was formerly Visio's headquarters.

A second Microsoft source said placing the group miles away from Microsoft's headquarters is more than symbolic. "It separates them from Redmond thinking," he said. Theoretically, that separation could insulate them from turf wars among the various product groups, he said.

Microsoft declined to comment on the group.

Knowledge management, a term popularized by Lotus Development in 1998, centers on the notion that companies house a potential gold mine of data, much of which is impossible to find or use.

"The theory is that companies have a lot of intellectual capital that is poorly used. We've all been in situations in large companies where the left hand doesn't know what the right hand is doing . . . and there are conflicting priorities," said Paul DeGroot, senior analyst at research firm Directions On Microsoft.

Indeed, many observers would argue that this is precisely the problem Microsoft is now attacking in its own portfolio,sorting out which products do what and finding better ways to combine existing or future technologies in saleable packages.

Microsoft has attacked the problem before. After Lotus launched its knowledge management foray, Microsoft fought back with its own Exchange Server-based strategy. But that message faded, and Microsoft is once again seeking to spur new demand for tried-and-true products such as Office.

"Getting to 90 percent [market share with Office was profitable, but being at 90 percent of a market that isn't growing isn't much of a business," DeGroot said.

Solution providers are interested in what transpires. "This is a good idea if they can execute on it, but they have tried it before. These things are all cyclical," said Andy Sakalian, president of Version 3, a Columbia, S.C.-based solution provider.

Microsoft has to convince users and solution providers that there is real value in upgrading software, another source close to Microsoft agreed. "You have to give people more. After all, who needs another font?" he asked.

Microsoft sports a bewildering array of products, some of which are redundant, analysts said.

"It behooves Microsoft to present a holistic vision of where they're going with knowledge management and collaboration, coupled with .Net, to communicate a much broader vision than its current product-centric focus," said Matt Cain, vice president of The Meta Group.

For its part, IBM has done a better job presenting its analogous strategy with its WebSphere Portal Server and Lotus products, he said.