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Now in paperback, the inside story of "the greatest transformation of Microsoft since it became a multinational company"
Marshall Phelps's remarkable eyewitness story offers lessons for any executive struggling with today's innovation and intellectual property challenges. Burning the Ships offers Phelps's dramatic behind-the-scenes account of how he overcame internal resistance and got Microsoft to open up channels of collaboration with other firms.
- Discover the never-before-told details of Microsoft's secret two-year negotiations with Red Hat and Novell that led to the world's first intellectual property peace treaty and technical collaboration with the open source community
- Witness the sometimes-nervous support Bill Gates and CEO Steve Ballmer gave to Phelps in turning their company around 180 degrees from market bully to collaborative industry partner
- Offers an extraordinary behind-the-scenes view of the high-level deliberations of the company's senior-most executives, the internal debates and conflicts among executives and rank-and-file employees alike over the company's new collaborative direction
There are lessons in this book for executives in every industry-most especially on the role that intellectual property can play in liberating previously untapped value in a company and opening up powerful new business opportunities in today's era of "open innovation." Here is a powerful inside account of the dawn of a new era at what is arguably the most powerful technology company on earth.
- Sales Rank: #613504 in Books
- Published on: 2010-12-21
- Original language: English
- Number of items: 1
- Dimensions: 8.70" h x .53" w x 5.67" l, .53 pounds
- Binding: Paperback
- 208 pages
Review
"This is a book as much about teams and organizations managing conflict brought on by significant change as it is about intellectual property (IP). Intertwined throughout a series of engaging and personal stories - showing how Microsoft instituted a strategic personality makeover from a monopolisitc bully to a respected collaborative partner - are lessons that every business person can use in building and implementing diverse teams to meet clear strategic objectives.Anyone who invests the short time to indulge the personal stories of this book will come away with a renewed sense of commitment to implementing fully cross-functional teams, as Phelps clearly shows as a key element to the successful transformation of a software powerhouse "going it alone" to spurring innovation and economic progress benefitting all of society." (Journal of Product Innovation Management, 2010; 27)
"Phelps (corporate vice president for intellectual property policy & strategy, Microsoft) and journalist Kline (Rembrandts in the Attic) have written a brisk and engaging book about Microsoft's radical overhauling of its intellectual property (IP) strategy. Phelps, the principal architect of this new strategy, gives the reader an insider's perspective on his struggle to overcome Microsoft's traditional use of its intellectual property as a "weapon" against competitors and to transform the company into a key player in the new business environment of "open innovation….the book is worth reading for its portrait of a major corporation undergoing massive change and for its lucid explanations of IP business strategy. Recommended for serious business readers."�(Library Journal, July 15, 2009)
"Could Microsoft’s ability to produce intellectual property be the company’s future salvation? A few weeks ago, I complained that Microsoft wasn’t innovating. Yet the book Burning the Ships talks of Microsoft’s burgeoning intellectual property treasure chest. Burning the Ships shows the way to another outlet for Microsoft’s innovation. Instead of trying to hold their intellectual property close to the vest, Microsoft is beginning to open up the IP treasure chest and let others try to do the work of bringing those products to market." (InformationWeek,�June 1, 2009)
Review
"Told with a litigator's attention to detail, Burning the Ships recounts the journey that forced Microsoft to face its own 'succeed or die' moment. It's a powerful high-stakes lesson in strategy and survival that speaks volumes to business leaders of all stripes about the courage required to embrace radical business transformation."
–William J. Amelio, President and CEO, Lenovo
"Intellectual property does not show up on your balance sheet, and your board of directors would not recognize it if it were set out on a table in the lobby. But do not kid yourself: in an era of ever-commoditizing supply and distribution, IP is the essential fabric out of which your competitive advantage will be fashioned. Burning the Ships gives you an insider's look into how this engine of economic returns operates and what you can do to maintain it."
–Geoffrey A. Moore,�author, Crossing the Chasm and Dealing with Darwin
"[There are] many interesting tales in Burning the Ships, a new book that traces Microsoft's moves from intellectual property novice to patent powerhouse. [It reveals how] the company set upon a new course with regard to intellectual property, making peace with longtime enemies, creating a business around its underused technology, and seeking to strike broad cross-licensing deals with nearly everyone in the industry."
–Ina Fried, CNET News.com
"A good case study of how Microsoft reinvented�itself and began leveraging its Intellectual Property for good (collaboration) instead of evil (punishment). I would encourage anyone working [in the technology field] to read it. I can easily see that this book will be required reading very shortly in most MBA programs."
–David Lane, Linux Journal
"Microsoft will always have its detractors -- all powerful and successful companies do -- and there is no doubt that it has thrown its weight around with great force on many occasions in the past. But for those prepared to look at the company with an open mind, this book is extremely revealing about why open source and collaboration have forced senior management to look again at its traditional ways of operating in order to embrace new business realities."
–Joff Wild, IAM Magazine
"Burning the Ships�recounts Phelps’ behind-the-scenes account of how he overcame internal resistance and got Microsoft to embrace collaboration with other firms. There are plenty of lessons in this book for executives in every industry where accessing previously untapped intellectual property can open up new business opportunities."
–Stephen Albainy-Jenei, Patent Baristas
"This book describes a dramatic shift toward business openness and property ownership by a formerly closed, defensive company, resulting in enormous new value for the company."
–William New, Intellectual Property Watch
"The book provides a very interesting behind-the-scenes account of the transformation of Microsoft, as well as dealings with competitors during that time."
–Peter Zura, The 271 Patent Blog
"However technology evolves, IP strategies will have to evolve with it. This book is a chance to learn from one company's version of that evolution."
–Wendy Grossman, ZDNet Reviews
"We've been looking for some new paper to turn here at the Engadget HD offices, and it looks like Marshall Phelps' "Burning the Ships" may be our next purchase."
–Darren Murph, Endgadget
"Burning the Ships is a fascinating window into Microsoft's corporate conversion [away from] a "fortress mentality culture and go-it-alone market strategy." Collaboration and partnership are the new name of the game, and IP is the glue that seals such deals. Phelps and Kline offer plenty of behind-the-scenes accounts of strategy decisions and negotiations, and they're honest about how Microsoft was perceived in the market and about how difficult it was to adopt a new approach to competition. The writing is admirably clear."
–Nate Anderson, Ars Technica
From the Inside Flap
Burning the Ships: Intellectual Property and the Transformation of Microsoft
At the start of this decade, Microsoft was on the defensive-beset on all sides by anti-trust suits and costly litigation, and viewed by many in the technology industry as a monopolist and market bully. How was it going to survive and succeed in the emerging new era of "open innovation," where collaboration and cooperation between firms, rather than market conquest, would be the keystones of success?
This was the challenge facing Microsoft founder and Chairman Bill Gates. But "like Cortez burning his ships at the shores of the New World," Gates decided to embrace the change that was needed. He recruited Marshall Phelps-the legendary "godfather" of intellectual property who had turned IBM's IP portfolio into a $2-billion-a-year gold mine-out of retirement and into the cauldron of controversy that was Microsoft. Only this time Phelps's mission was infinitely more challenging than simply making money from IP. It was to help reform Microsoft's "man the barricades" culture, encourage the company to abandon its fortress mentality around its technology and share it with others for mutual benefit, and use intellectual property not as a weapon of competitive warfare but as a bridge to collaboration with other firms instead.
Here, for the first time (and 500 collaboration deals later), is the inside story of what one analyst has called "the biggest change Microsoft has undergone since it became a multinational company."
In this book, authors Marshall Phelps and David Kline take the reader inside the dramatic struggle within Microsoft to find a new direction. They offer an extraordinary behind-the-scenes view of the high-level deliberations of the company's senior-most executives, the internal debates and conflicts among executives and rank-and-file employees alike over the company's new collaborative direction, and the company's controversial top-secret partnership-building efforts with major open source companies and others around the world. Nothing was held back from this book save for information specifically prohibited from disclosure by confidentiality agreements that Microsoft signed with other companies. Indeed, the degree of access to Microsoft's inner workings granted to the authors-and the honest self-criticism offered by Microsoft leaders and employees alike-was unprecedented in the company's thirty-four-year history.
There are lessons in this book for executives in every industry-most especially on the role that intellectual property can play in liberating previously untapped value in a company and opening up powerful new business opportunities in today's era of "open innovation." Here is a powerful inside account of the dawn of a new era at what is arguably the most powerful technology company on earth.
Most helpful customer reviews
0 of 0 people found the following review helpful.
An Eye Openner
By Kip Howard
For the non business person (me included) this book brought forth the complexities business must deal,with when it comes to,intellectual property. It is also,the story of how out of the box thinking and good old common sense reap long and short term rewards.
12 of 14 people found the following review helpful.
Disappointing lack of substance
By P. Igoe
As a patent attorney, I had hoped for quite a bit more substance in this book. Instead, Phelps provides an uninspiring account of how Microsoft transitioned from its strategy of using its near-monopoly power to force partners into patent non-assertion agreements to a strategy of using their near-monopoly power, patent portfolio, and the implied threat from their investment in Myhrvold's Intellectual Ventures to force partners into patent cross-licensing agreements. Phelps presents this change as a forward-thinking new way of doing business, but one can't help see this merely as spin regarding a change Microsoft needed to make to avoid further antitrust hassles and alienation of partners and customers with increasingly viable alternatives to Microsoft.
Phelps cites his confidentiality agreement with Microsoft at multiple points as an excuse for lack of details, but he and Kline omit even basic details such as which technologies were at issue in the licensing negotiations with Red Hat or Novell.
There is little insight to be gained by the normal practitioner as Phelps exists in a rarified world of practically unlimited financial and legal resources, mostly unquestioning executive support, and the leverage of the aforementioned near-monopoly power in the IT industry. Due to Phelps stature in the IP world, this is a book you will feel you have to read, but don't expect much.
8 of 11 people found the following review helpful.
A "fresh" look at Microsoft's new/old IP strategy
By Matthew Asay
"Open source is not going away. Why should it?"
That's a quote from Microsoft CEO Steve Ballmer in Marshall Phelps' new book, Burning the Ships, and it's a question that Phelps tries to answer.
In the course of doing so, Phelps portrays Microsoft as desperately striving to adapt to a new world of aggressive enforcement of intellectual property (IP), but ends up suggesting a rising IP hegemon eager to shape a new world of such enforcement.
It's not pretty.
Phelps is the man who turned IBM's patent portfolio into a $2 billion business (as he reminds the reader several times), but his goal at Microsoft wasn't to generate cash through licensing, he declares. Nor is Microsoft's new IP strategy a rehash of the old world where IP is treated as a negative right (i.e., the ability to protect one's IP from the wiles and avarice of competitors), but rather IP becomes "a bridge to collaboration with other firms."
But this is where the contradictions begin.
Phelps indicates that Microsoft cannot go it alone in the world...then points to statistics that claim 42 percent of the world's IT people depend upon Microsoft technology. Microsoft apparently has done quite well going it alone.
He further agonizes that Microsoft must expand its partnership footprint...even while identifying 640,000 vendors in Microsoft's partner ecosystem that earned more than $425 billion in revenue in 2007. It's unclear, based on his own evidence, how Microsoft is starving its partners and, indeed, Microsoft has always made much of what an impressive partner it is with 96 percent of its sales going through partners.
Phelps berates patent trolls and others for forcing Microsoft to pay hundreds of millions of dollars in licensing fees...but then goes on to explain how Microsoft's new IP strategy has his team on the road constantly signing up new licensees for patent royalties and other agreements.
The money quote comes from Nathan Myhrvold, a former Microsoft executive and arguably now the world's largest patent troll with his company Intellectual Ventures, who declares himself "shocked" by the actions of patent trolls who could "just go and buy a patent and then use it" against Microsoft.
Oh, the irony, given that this is a concise definition of Myhrvold's current business plan and, apparently, Microsoft's.
Indeed, this is where Phelps' IP strategy for Microsoft departs from its stated intent. Phelps writes:
"...(I)ntellectual property should always serve the business, not be the business....Microsoft didn't need money (from its patent portfolio)--it had billions of dollars of cash in the bank. Instead, Microsoft needed to transform its relations with the rest of the industry and build collaborative relationships with other firms. So that became the focus of our new IP strategy."
This sounds impressive, and it would be if it accurately depicted how Microsoft has approached the industry with its IP. Instead, Microsoft has spent the past several years menacing the open-source community and others with the threat of its increasingly large patent portfolio, and now claims "more than 500 patent and technology collaboration deals with companies large and small around the world."
I say "menace" because Phelps nearly always talks about these agreements in light of Microsoft approaching a prospective IP "partner." If Microsoft's IP were needed to build such cooperative bridges, presumably more of these "partners" would be approaching Microsoft, rather than waiting for Microsoft's heavy knock on the door.
Phelps routinely neglects to mention facts that might cast Microsoft's IP actions in anything less than a warm and glowing light. For instance, he talks up Microsoft's generous decision to share 30,000 pages of technical documentation, conveniently forgetting to mention that the action was spurred by its desire to get out from under the European Commission's antitrust eye. (It didn't quite work.)
But nowhere is Phelps' selective memory more illuminating on Microsoft's intentions for its new IP strategy than when discussing open source. Here Phelps outdoes himself, starting with his characterization of why Microsoft wanted to build a bridge to the Linux world:
"(Our customers) also wanted to stop worrying about the potential legal liabilities involved in using (open-source) software that was the subject of IP disputes." (p. 100)
The cheek Phelps uses here is breathtaking. First of all, he reiterates over and over throughout the book that Microsoft is a regular target for firms claiming Microsoft's technology violates their IP, suggesting that Microsoft may be the one with an IP problem, not open source, which has almost never been the subject of an IP-infringement lawsuit.
Except those funded (or started, as in TomTom) by Microsoft, of course, as SCO's failed suit against Novell appears to have been. In other words, this pitch-black Microsoft pot is calling a nearly lily-white kettle black, even as it attempts to smear the kettle with black paint.
This is galling in the extreme.
Ironically, Phelps suggests that the open-source charm offensive was all about providing interoperability to customers, but then declares two pages later that IP license agreements "wouldn't solve the interoperability problem." Well, of course not. But then, it's not really about interoperability. Patents are not critical to interoperability, as Microsoft's deal with Red Hat demonstrates.
Let's call a spade a spade. Microsoft's patent-licensing scheme has little to do with helping customers achieve interoperability. According to recent IDC data, IT execs rank interoperability way down on their list of priorities when buying a new server operating system.
Microsoft's plans are actually about providing Microsoft with a way to more effectively compete with free.
Customers aren't taking Microsoft's word for it. Phelps explains that while every CIO with whom Microsoft discussed its pending open-source plans purportedly expressed sympathy and encouragement, not one of them was willing to join negotiations or sign up for Microsoft's patent license. Phelps suggests this was out of fear of retribution. But couldn't it also simply mean that these CIOs were expressing lip service to Microsoft's initiative, lip service that wasn't worth backing up with any real action?
Phelps declares that the key point of his book is the "role that intellectual property can play in liberating previously untapped value in a company and opening up powerful new business opportunities." Unfortunately, he never explains why this new "collaboration imperative" is necessary, given that Microsoft's pre-patent offensive strategy netted it billions of dollars each quarter in free cash flow and a hugely impressive partner ecosystem.
In other words, the old Microsoft seemed to be doing quite well before Phelps made it an active patent tax collector. Will his new Microsoft fare as well?
The book is well-written and, but for the constant patting of himself on the back and quotations from insiders that sound like they were purposefully wordsmithed to fit perfectly into the flow of the book, it's worth reading. Just don't expect to find a kinder, gentler Microsoft between its pages.
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