You can see the Microsoft name and the logo wherever you go
in the telecommunications industry. It's known as the biggest
company in the personal computer software business, but over
the past few years it has shown a steady and increasing
interest in all sectors of telecoms.
Microsoft software is there in mobile phones and PDAs. It
has an increasing presence at OSS events such as TeleManagement
World. And just over two years ago it had one of the biggest
stands at the ITU's 2003 exhibition in Geneva, where the
company announced IPTV partnerships with operators around the
The person in charge of these moves is Maria Martinez
— and, as she explains, "a lot of software in the
world is tied to communications". And yet it's sobering to
think that only a decade ago, following the launch of Windows
95, email and internet access were optional extras for PCs.
Today "PCs are more and more tied into communications", she
points out: it is hardly a computer if it isn't plugged in
— literally or via a wireless connection — to
But until recently, Martinez admits, Microsoft did not have
a really strategic relationship with the telecommunications
industry. "We had relationships with CIO-level executives
through selling our existing core products into the telecoms
space," she says. An operator might have "40,000 desktops"
using Microsoft software, "but nothing strategic".
When Microsoft hired Martinez in mid 2003 she had been
running her own start-up, Embrace Networks, which specialised
in software for web-based services. That was after 12 years at
Bell Labs in management and development of Unix systems and a
spell at Motorola running the company's digital cellular
Running her own company "was fun", she says, and at the time
"I said I was never going to go back to a large company. But
Microsoft approached me and I liked the idea. It was like a
dream come true. It was like a start-up in a large
Telecoms, media and entertainment
Martinez was hired as vice-president for the communications
sector, a couple of levels below CEO Steve Ballmer himself. Her
responsibilities including the telecoms, media and
entertainment worlds, both service providers and network
equipment makers, throughout the world.
And, uniquely for Microsoft, her team covers everything that
the company sells to this sector. "My team is the only team
that sells everything."
That ranges from a dozen copies of Microsoft Office up to
full-scale server systems, and including everything on the way,
from security software to Xbox. And the scope gives her the
challenge to change the message that the telcos and others felt
they were getting from Microsoft. "We were working in strategic
stuff but they didn't want to know," she says. "But the value
now is in services and our message is that we want to partner
with telcos. We are transitioning away from selling software to
the IT department to partnering at the top line."
According to the official biography, one of her key
responsibilities "is the transformation of Microsoft
technologies into a cohesive set of powerful solutions for
creating and integrating services and simplifying operations so
that companies can manage their business growth effectively".
She is also responsible for worldwide sales, marketing,
consulting and support services for all customer segments
within the sector.
The Bill and Steve moment
And it's clear that Martinez is leading a strategy for
Microsoft that has the full backing from the top of the
company. When Global Telecoms Business interviewed her in early
January, the Bill and Steve moment came quickly.
This is the point, reached in almost any meeting with any
Microsoft executive anywhere in the world, when he or she fixes
you in the eye and says a reassuring word about the way Bill
was saying only last week how you guys were really showing the
When the Microsoft executive in question is busy discussing
an e-commerce system with a fluffy toy manufacturer in Omaha,
or an e-government system with a local council in rural
Yorkshire, this can be flattering but, well, just a little
But the hierarchy shows that Martinez — a telecoms
engineer with a distinguished track record at Bell Labs and
Motorola before becoming a CEO — is close enough to
chairman Bill Gates and Steve Ballmer, the CEO, for her
declaration to be taken seriously: "Bill and Steve are very
committed to this space," she says about Microsoft's
involvement in the telecommunications industry. And it's plain
that she is right.
It's meant a significant change for the way Microsoft does
business in this market. "It's the difference between selling
software and selling full-value propositions to go to market
It's come at a good time, of course. With all-pervasive
broadband, wireline telcos are thinking hard about what they
can deliver to customers in addition to plain old voice
services. People are wanting to use mobile handsets to check
and send emails, and mobile operators are looking at the
opportunities from TV and other types of content.
Logging on via Windows
And, as she points out, those wireline customers are more
than likely to be connecting PCs using Microsoft Windows to
their broadband services. The mobile world is more fragmented,
but mobile versions of Windows are now in many cellphones and
PDAs, and it's usually Windows laptops that log onto wifi
The first task for Martinez and her team has been to take
Microsoft's existing portfolio and customise it for the
telecoms industry, "to package the technology and make a better
solution", she says. "One of our biggest challenges is to get
the word out about our range. Many don't realise what we
And she and her colleagues have taken the debate up a couple
of grades in the industry's hierarchy, she says. "Right now I
am engaged on a weekly basis with very top executives in
companies about business propositions. How do we go to market?"
For Microsoft, telcos represent a "huge market opportunity",
Martinez admits: "They are investing huge amounts of money in
their networks and then they need to figure out how to put
services on them." Microsoft's task, she says, is to identify
services that it can help telcos to deliver, not just to
consumers but to small and medium businesses over broadband or
mobile connections — "services such as messaging and
storage — Microsoft brings a whole range of
There's a particular effort round the company's
Exchange-based hosted messaging platform, which telcos have
traditionally not offered but is starting to grow rapidly. "By
June 2006 we expect over 25 million mailboxes round the world
on Exchange. We never did that before."
What Martinez and her colleagues are selling, of course, is
based on services that Microsoft traditionally sells to the
corporate world for use on IT networks.
And what happens when it crashes?
But, let's put this carefully, there's a difference in
reliability requirements between a corporate network and a
public telecommunications system. If your office network packs
in on a Friday afternoon, you stop work and go home early. If
the phone system goes down around the city, people are likely
And the traditional telephone industry has made the most of
this. Is it fair? "That has been a challenge," admits Martinez,
"but it's primarily perception." She challenges the assertion
that there is a threat to reliability, but she recognises the
assertion. "We fight it relatively easily," she says. "We find
it all the time, but we have case studies that prove
Some telcos are reluctant to be named, she shrugs, but she
can think of one company running an eight-terabyte database of
call data records on Windows — "They have the whole
Microsoft backend," she adds — and another operator
that has build a complete voice system on Windows.
Meanwhile the company has been promoting its vision of the
service delivery platform, going to the heart of the OSS/BSS in
new generation networks. "Web services are at the core of the
ability to do things," she says. "We call it the connected
services framework." And Microsoft has become a prominent
member of the TeleManagement Forum, where OSS/BSS standards are
Getting the message out "takes a lot of energy from our
team", she adds. "I don't believe you can win every religious
discussion," but she believes Microsoft is winning many of the
battles to be accepted in the heart of the telco.
Meanwhile she has an economic case to bring forward: "a 30%
better total cost of ownership". If there's an initial
reluctance from a traditionally-minded chief technology
officer, this is a business proposition she and her colleagues
can take to others in the C-suite, the chief marketing officer,
chief financial officer, the chief executive officer.
"It means you can put hosted messaging, IPTV and other
services on the system and then you can sell them as a value
proposition." That 30% comes from the scale benefit of using
systems that are produced in vast quantities for corporate
users. Martinez continues the theme. "Data centres operate more
efficiently with our technology."
Into the digital home
At the consumer end of the network, Martinez says that "the
telcos are super-exciting about the whole digital home idea".
Microsoft already has products such as Xbox and its Windows
Media Center. "There are more announcements over the next
year," she says. "all these products are coming together into
an integrated strategy."
Fine, where the penetration of PCs and advanced games is
already high, but what about the rest of the world? According
to Martinez, Microsoft is evolving a special strategy for
developing and emerging markets. Telcos themselves can be
channels to deliver PCs into the consumer market, combined with
broadband services "in the same way that you would bundle a
Microsoft is working with one operator which has already
delivered "several thousand PCs combined with broadband
connections" into the market, "and we're working very closely
with many operators around the world". It is "a great
partnership", she says: "We benefit and they benefit. We use
their retail presence to drive penetration in the market."
One of Microsoft's most visible forays into the telecoms
market has been in the area of IPTV, where it has worked
through what is almost a sub-brand, Microsoft TV. It's clearly
taken longer to get this sector going than Microsoft expected
when it announced a number of user companies back in 2003.
In the US AT&T — the former SBC — is
the most advanced customer, says Martinez, and Verizon has just
launched services, as has T-Online in France, the local
subsidiary of Deutsche Telekom.
"It's a programme that will take a few years to deliver,"
says Martinez. And meanwhile the very idea of IPTV is changing.
"The user experience of on-demand TV is not very good," she
admits. There is an opportunity for more services to be
delivered: "It's more about on-demand that broadcast
applications," as well as about "presence on your TV"
— the ability to watch the same thing as a distant
friend, yet exchange voice and text messages via the system.
"We see this will provide an opportunity for operators," she
And operators are beginning to recognise the opportunities
from targeted advertising, she notes, as well as interactive
The message is getting through to telcos, she feels
confident. "At the executive level there is a realisation that
they have to get really smart about how they compete," says
Martinez. Operators are building plans for triple play and
quadruple play offerings, and they will drive a significant
restructuring of the industry.
And media and entertainment companies are also recognising
what is happening, despite a degree of conservatism in the
business. Many studio executives "don't have PCs on their
desks", she smiles, and they still send video tapes around in
But January's Consumer Electronics Show in the US signalled
a big shift, she believes. One major media company "brought its
entire executive staff" to the show "to learn about the
importance of the whole digital revolution". They wanted "to
pick our brains about the technology", because of Microsoft's
position in the business.
"The time is past when we have to prove ourselves," says
Martinez. But Microsoft will always have to reassure companies
that it is not trying to compete with them, she adds. "No, we
say, we're trying to partner with you."
- Corporate VP of the communications sector at
Microsoft, heading the company's efforts focused on
wireless, wireline, cable, hosting and media and
- Bachelor's degree in electrical engineering from
the University of Puerto Rico
- Master's degree in computer engineering from Ohio
- Spent 12 years at Bell Laboratories, including
development of disc storage systems and leading the
development of Unix systems for symmetric
multiprocessing and high availability
- Joined Motorola as a VP and general manager to
run the internet connectivity solutions division and
the digital cellular infrastructure division. Under
her leadership, Motorola launched the first CDMA
commercial system in the world and established
software as a significant source of revenue for the
company's infrastructure business
- Martinez served as CEO of Embrace Networks, a
software vendor. She led the development of the
company's technical strategy, launched the company's
first software platform and developed its customer