WDAY.com |

North Dakota's #1 news website 10,650,498 page views — March 2014

Published June 03, 2011, 12:00 AM

Part 2 of 7: Two worlds collide: The merger of Great Plains and Microsoft

Andy Westby remembers the first time he set foot in Microsoft headquarters in Redmond, Wash. – a corporate city within a city that housed tens of thousands of employees in numbered buildings sprawled across hundreds of acres.

Andy Westby remembers the first time he set foot in Microsoft headquarters in Redmond, Wash. – a corporate city within a city that housed tens of thousands of employees in numbered buildings sprawled across hundreds of acres.

“I think for a lot of employees at Great Plains, that was the eye-opener for just how big Microsoft was,” Westby said. “You hear the numbers – 90,000 employees – but you can’t get a feel for what that means until you go to Redmond and you see Building 21 to Building 108. That’s a town, and that town is your company.”

It didn’t start out as his company. Westby started as an intern at Great Plains Software in 2000. Then, later that year, his resume got an instant upgrade: Microsoft was buying Great Plains, and he was going to be a Fortune 500 employee.

It was the largest acquisition of personnel Microsoft had ever made, a $1.1 billion offer Great Plains couldn’t refuse.

Hints of an emerging bond between the two companies were sprinkled across the preceding decade.

In 1993, Microsoft and Great Plains launched a joint venture to create Microsoft Profit, a small-business accounting program. On multiple occasions, Microsoft head Steve Ballmer appeared at Great Plains’ annual Software Stampede conference, with Microsoft sponsoring the event.

In 1998, while Microsoft was under fire from the US Department of Justice for charges of anticompetitive behavior, Great Plains’ leader Doug Burgum defended the company’s business practices in testimony before Congress.

Burgum says he didn’t know a merger was coming, but he wasn’t blindsided, either.

“The minute you’re public, you’re sort of putting yourself in play,” he said. “That’s when you have to start listening when people call.”

In some respects, the deal was a clean fit. Microsoft got a ready-made inroad into accounting software to jump-start a new division, Microsoft Business Solutions, which was formed following the acquisition. Great Plains got access to Microsoft’s resources and marketing muscle – and didn’t have to fend off a challenge should the larger company acquire a business software competitor.

“If Microsoft was going to be in this space, we want to be the people they were going to be in this space with,” said Jodi Uecker-Rust, who was a Great Plains manager at the time of the acquisition.

Employees remember optimism and excitement – a Forum story from April 2001, the month the acquisition became official, described the mood as “downright giddy.”

But the deal also set in motion the sometimes-bumpy process of blending together a successful but distinctly homegrown North Dakota company and a hypercompetitive global technology leviathan.

Microsoft was no stranger to spending big on acquisitions. It just wasn’t accustomed to picking up 2,200 employees in the process. A year earlier, it had bought Visio for $1.3 billion and acquired a grand total of 15 people.

“They had very limited experience in terms of large acquisitions,” said Schoenfish, a human resources manager who helped facilitate the integration into Microsoft. In prior deals, she said, the model had been, “We go in, we buy it, we give everybody relocation packages to move to Redmond and we move everybody there.”

But Great Plains wasn’t going anywhere. Doug Burgum had assured his employees that no chopping block layoffs or mass reassignments were in the offing. And following the official acquisition, finalized in April 2001, Great Plains remained largely independent as a wholly owned subsidiary.

That arrangement proved to be more of a headache than it was worth.

“We didn’t really go through the integration process. We were Microsoft Great Plains, which just caused confusion.” said Don Morton, who was Burgum’s chief of staff at Great Plains and is now the site leader for the Fargo campus. “Everybody, Microsoft leadership, our leadership, said, ‘This is not what we signed up for.’ We didn't want to be a one-off, We wanted to leverage the Microsoft brand.”

To smooth out the wrinkles, the company launched a full-out push for integration. Schoenfish and her colleagues set to work trying figure out how to blend two “very different” cultures.

Great Plains employees were accustomed to teamwork and cooperation; Microsoft employees had a reputation for internal competition (one former employee who went through the acquisition said the latter sometimes had “a Darwinian environment at the higher levels”).

Great Plains was used to watching every dollar; Microsoft had a policy of giving away free soda on campus. At one point, an exasperated Great Plains manager declared, “We can have free soda – you just need to take 10 people out of your budget.”

Great Plains employees espoused a typical Midwestern modesty; Microsoft’s could be brash. “There was a different breed of cat working there,” said Mark Olson, a longtime brand and communications manager for both companies. “There were a lot of really, really smart people who weren’t afraid to tell you they were really smart.”

Steve Anonsen, an early Great Plains programmer, recalls the curiosity of watching “these polite Midwestern people get in these meeting with these aggressive Microsoft people.”

Anonsen, now one of a few dozen of Microsoft’s prestigious Distinguished Engineers, credits Burgum and Great Plains for pushing back against that aggressiveness to infuse a little bit of North Dakota Nice into the parent company’s world view.

“‘Respectful’ was not in Microsoft’s values before Great Plains joined,” he said, referring to the company’s six published core values. “Doug Burgum specifically went to Steve Ballmer and said, ‘Hey, we function better when we’re respectful.’ Microsoft changed its values.”

Burgum isn’t willing to take credit for anything nearly so dramatic or direct. He recalls asking Ballmer if Great Plains could keep its own mission statement, and being part of discussions to shape Microsoft’s set of values.

“I don’t want to take 100 percent credit for it,” Burgum said.

But he does credit his company for making a positive impact on Microsoft’s mission and culture. “I think that’s one of the areas where Great Plains brought a lot to the party,” he said.

After the acquisition, Burgum stayed on as a Microsoft vice president until 2007. It was a departure from the usual chief executive playbook – “most people, when companies are acquired, aren’t there six, seven years afterward,” he said – but employees say the move helped keep the Great Plains atmosphere intact.

“The culture of Microsoft and the culture of Great Plains really changed when Doug left,” said one employee who was with the company until earlier this year. “Doug did a great job maintaining a sense of community.”

At some points, the cultural clash spilled over into the business side of the operation. Tracy Faleide, a former project manager who was with the company, said one of the hardest parts of the merger was maintaining Great Plains’ sterling relationship with its partner vendors – something she says wasn’t a high priority for Microsoft.

“We were full-time evangelists, explaining, ‘Here’s why we need to retain certain aspects of our business model,’” she said.

In hashing out those differences, some Microsoft employees “sort of made an assumption that we were pushovers,” she said. “That was a lesson some folks learned in surprising ways, I think.”

When the Great Plains campus came under the Microsoft banner, one implicit assumption was that the company would strip the names off its buildings and conference rooms and adopt a methodical numbering system like the one used in Redmond.

The Great Plains team dug in its heels, and the names stayed.


Readers can reach Forum reporter Marino Eccher at (701) 241-5502

Tags: