Doug's world: A Q&A with Doug Burgum (2006)

By Teri Finneman, The Forum

April 01, 2006 at 11:00 PM

Doug Burgum remembers the pressure he felt in 1984 as he put his family's money on the line to take control of a fledgling Fargo software company.

Only 27 years old at the time, the new president of Great Plains Software was driven as much by fear as by vision in his determination not to fail.

"We want to be the very best company that North Dakota has ever seen," Burgum said in a 1985 Forum interview. "We want to be the best accounting software company in the country."

The resolve of the young entrepreneur paid off big time in April 2001 when Microsoft, the world's largest software company, bought Burgum's growing enterprise in a $1.1 billion stock deal.

This week, the former Great Plains Software marks its fifth anniversary under Microsoft.

The Fargo company also celebrates its 25th anniversary since its founding in August 1980 as a computer retail store by Roger Turner and the late Joe Larson.

The following year, Great Plains began developing software, sparking the interest of young Burgum who mortgaged family farm land to join in 1983 as partner and vice president of marketing.

In 1984, Burgum became president when he and a group of investors - including family members - bought controlling interest of the company.

Burgum, now 49 and senior vice president of the Microsoft Business Solutions group, recently sat down with The Forum to discuss how far his company has come and where he sees it going in the future.

You joined Great Plains in 1983 as vice president of marketing. Why? What interested you about this company and the software industry?

In 1983, the personal computer was just taking off as perhaps one of the most revolutionary devices of its time - or at any time - in terms of being a catalyst for driving change.

So it was very exciting to me to think that there was an opportunity for an explosive new industry in software.

One of the things that was really exciting about that was that - unlike a lot of other industries where the economics of those industries require large amounts of raw materials and, therefore, require industries to be close to their consumers - the economics of software were that you could be located anywhere and serve customers globally and that the only raw material that you needed to be close to was talented people.

Besides mortgaging farm land in 1983, you and your family invested more in the company in 1984. Why did you take that chance? Did you have any idea the company could become what it has?

As has been said, literally I bet the farm on Great Plains in 1983, and that was not an easy thing. Obviously, when you've got land that has been in the family for generations, it's not the first thing people think about doing, but I had a very strong feeling about the long-term potential of the software industry. I suppose I was young enough that I didn't fully understand all the risks. That was one thing I had going for myself.

I don't want to sound arrogant - there was a part of me that thought we would actually be this successful faster.

Shortly after I invested in '83, I thought we had kind of a unique proposition around doing the accounting software on PCs, and I went to COMDEX (Computer Dealer's Exhibition) in Atlanta in the spring of '83 and was surprised to find there were 63 other companies there that were also doing accounting software on PCs. So a lot of other people had the same idea. So then it became more apparent that it was going to be a longer schlog.

How risky did your family think the investment was?

Well, I joke now that then the family was, you know, in some ways very undiversified because all the money was sort of in the (Arthur, N.D.) grain elevator business.

The Arthur elevator had been a shareholder in Interstate Seed, and Interstate Seed was sold about 1983 to a Dutch company, VanderHave. For the first time since the elevator was founded in 1906, there was actually some free cash lying around.

I was quick to propose to the family business that maybe we ought to diversify out of agriculture and into software. It was a big risky bet by the family and by the extended family.

I think one thing when I reflect back on it, too ... as a young kid at the time, you know, if you're single and you're living very simply and you don't have a lot of expenses and you don't have sort of family responsibility, it's sort of easy to put it on the line.

But once the family put a large investment in the company ... I felt a great amount of support, but there's also an additional level of pressure. It's one thing to lose your own money. You don't want to lose other people's money.

What do you see as some of the key accomplishments of Great Plains Software?

Well, I'd say there were several. Let me start at the highest level with the organization itself. The core of Great Plains, which was headquartered here at the time ... when we were acquired we had 2,000 people, of which about 900 or so were Fargo-based and then the rest - about 600 or 700 were in North America and about 400 were outside the U.S.

That organization had been named - I think, right before we got acquired - four or five times in a row to the (Fortune) 100 Best Places to Work list. That, to me, was an achievement of all of the team members that worked here. It was a culture of respect where people really had an opportunity to grow, very mission-driven around helping our partners and customers achieve their business success.

The second thing was we had award-winning products so, just from a product-development standpoint, we were always on the leading edge and had done a fantastic job on innovating and developing great software products.

In late 2000, Microsoft announced its decision to acquire your company. The $1.1 billion stock deal became final April 5, 2001. Why did you agree to the purchase?

We went public in '97 and, at that point, the decision you make ... is if you're going to take on public shareholders, then your responsibility as a leader changes, not just for superficial reasons - really from a legal standpoint, from a fiduciary standpoint. If you're a leader of a public company, then you're required to act in the best interest of all the shareholders.

That's kind of the clinical answer. I think the less clinical answer is one that - in the discussions that we had for probably six months leading up to the announcement - there was a collaborative effort with Microsoft to try to understand Microsoft's long-term strategy in business applications: How committed were they to the market and what role would the Great Plains team play in helping shape that once we were part of Microsoft.

I would say all of those commitments by Microsoft have been upheld and fulfilled.

Compare and contrast the focus of Great Plains Software and how it's changed under Microsoft.

As we've evolved into the group that drives business applications for Microsoft, we've broadened our scope as we've got products that include software for supply chain, management, manufacturing, human resources, payroll and customer relationship management.

The other piece is global - we are in so many more geographies today. It's a large, large number of countries. I think that that's part of what's changed. We were on a path, but we've really accelerated that path being part of Microsoft.

Microsoft ranked 41st as one of America's largest corporations on the Fortune 500 list in 2005. How has having headquarters in Redmond, Wash., and being part of such a large company changed how the Fargo campus operates? What are the pros and cons?

Let me start with some of the pros. The pros are, again, that when you have the resources of a really large global organization like Microsoft, you're able to tap into systems and capabilities that exist there.

I would say another element is Microsoft has got some of the leading benefit programs in the world, so that the Fargo campus members becoming Microsoft employees have the opportunity to participate in benefit programs which are just shockingly good.

Microsoft has a benefit where they match any team member's giving (charitable donations) up to $12,000 annually.

So it's not just the Fargo campus. It's all these local organizations that benefit.

I think another pro would be that we have the power of the Microsoft brand, which is a super well-known global brand and we have the power of the ability to co-market, if you will, with other parts of Microsoft.

The con is at that level of this size of an organization -when you get 63,000 people and lots and lots and lots of, you know, product lines - then the level of orchestration required across all that adds complexity. So that's one of the challenges.

I think the other thing is, within Microsoft Business Solutions, we do software development in Redmond, in Fargo, in Copenhagen and in India.

Again, the pro to that is we have an opportunity to tap into very diverse talent from all over the world, brilliant people that are across all these locations.

If you're going to serve customers around the globe, you've got to be ready to step up and understand how to master some of those complexities that come with size and with scale.

Since summer 2000, the Fargo campus has cut and added jobs. How many employees are here now?

I think that we have 1,100 (890 Microsoft full-time equivalency employees and 220 vendors, such as food service workers, etc.).

The total amount of headcount has been actually up if you count versus when we got acquired. The mix has changed a little bit, too.

Five years ago, we were a campus that was solely focused on Great Plains, which would be considered business applications. Now we've got a campus that has a much broader base than just business solutions.

One great example is Microsoft made a decision where they're going to go down to three operating centers in the world. Singapore and Ireland had already been picked and then they were trying to pick one for the Americas and they picked Fargo.

Now we've got about 50-plus jobs here that manage all the payroll and all of the accounts payable for North and South America. Billions of dollars pass through here in terms of the checks that get paid. They're in a separate, secured area.

What kind of employment trends do you see for the Fargo campus in the future?

I'm very bullish on the opportunities here. I think it cuts across all areas, whether it's R&D (research and development), operations, support and sales.

Now that Great Plains is Microsoft, what do you say to rumors that the Fargo campus will close and be consolidated with Redmond or another branch of the company?

I don't know what's the strongest way to respond to that. I sort of want to say phooey or something like that. Number one is Microsoft didn't acquire Great Plains or Navision to shut them down and move them.

When you shut down a campus, then you lose all the human resources because a lot of people are not able to move, and that would not be a smart business decision.

It's never ever come up in a conversation, so I don't even know where the rumors come from.

The other thing is that Microsoft is actually moving jobs here so, when we move all the operations stuff here, that ought to be a signal, which is if we're putting core, mission-critical stuff on the Fargo campus and starting up brand new businesses here and hiring and recruiting, then that probably is a signal that we're not trying to "close the thing down."

The other element is that the Redmond campus has got no room. There's a huge space crunch in Redmond, so this whole idea of moving to Redmond isn't possible.

The other thing about Redmond is that, right along with the Silicon Valley, it is the highest-cost place in the world to try to move and live and hire people and, you know, when we're trying to be a company that's corporately responsible to the bottom line, then moving people from reasonable-cost areas to high-cost areas also doesn't make sense.

Here's the million-dollar question: What do you do?

It effectively is the same job that I've had for 23 years, which is CEO of Business Solutions and, when I say CEO, I don't mean that in the public company, fiduciary sense.

I have got all the functions globally reporting to me for sales, marketing, R&D, finance, human resources, legal - I mean, all the same functions that I had before to run - what is now kind of a 4,000- to 5,000-person group that will do about a billion dollars in revenue this year.

That's the job where I'm trying to find my replacement to become that sort of top executive.

After 23 years of doing the same thing, albeit in increasing scale and complexity, but it's the same job that I've had since '84 when I became president of Great Plains.

Then there's another element, of course. Part of the responsibility of having that top executive job is you've got external responsibilities relative to our partners and our customers.

I've also participated quite substantially at a corporate level (along with the other business group leaders) ... working with Steve Ballmer, CEO of Microsoft, to help create and set the direction for the overall corporation.

Travel seems to be a large part of your job. How often are you here at the Fargo campus and how often are you off somewhere?

I'm here at least 50 percent of the time, sort of by design, and then the rest of the time is spread between Redmond and the rest of the world. When I say at least 50, it's probably somewhere between half and two-thirds of the time I'm here and then somewhere (else) between a half and one-third of the time, depending on month to month what the travel schedule is.

People have been confused. They thought that I'd moved to Redmond, or I have a place in Redmond. I'd like to be clear that the only residence I have is a little farm south of Fargo. This is where I live.

What are your thoughts on developing a relationship with NDSU's tech park?

I think that the relationship between Great Plains, now Microsoft, and higher education has been an important link for 25 years. I've said many times that I've felt like our success as a company - and even your very first question was why North Dakota or why Fargo - part of it was the access to higher education.

We're a believer in higher education and part of the way we believe in that is we've worked hard to try to create strong internship programs and strong hiring programs.

The original concept going back to the very beginning days of Great Plains was not only to hire people from the university, but try to recruit people back.

If we do further expansion, if we do a building three, I'm certain it will be here. We do have a third building up on west 45th (Street) that we would love to consolidate back down here on the campus. We'd love to get those team members back here. So our longer-term vision would be additional facilities here.

I'm sure people are curious as to how much contact you have with Bill Gates. How often do you see him and what do you like about the top boss?

One of the things that's been very positive and stimulating about the last five years for me personally is the depth of interaction that I've been able to have with a number of really talented and brilliant people across Microsoft, across the globe.

Part of the reason why a lot of them are there is because, obviously, Bill and Steve (Ballmer, Microsoft CEO) were the two guys that built the organization and attracted and helped retain the talent.

I've been fortunate to have quite a bit of interaction with both of them.

Bill, in particular, if you go beyond his celebrity, is really an amazing human being. Just having done Microsoft would be remarkable, but what he's doing with the Bill and Melinda Gates Foundation ... I don't think people really understand the scale of the impact he's having and the hundreds and thousands of lives of children that have already been saved by the work of the foundation.

All the interaction that I've had a chance to have with Bill is quite inspirational.

Where do you see yourself in the future? Any plans to retire anytime soon?

No plans to retire. Having done this, the same thing for 23 years, a person always has dreams about what might be the next chapter in life and, of course, I turn 50 this year, so a person dreams about those things. I have dreams, but no plans.

Is there anything you would like to add?

If I was going to add one thing maybe that helps tie the beginning to the end ... I got into the industry because I saw there was tremendous upside in the software industry.

If you take a look at the mission of Microsoft - helping people and businesses around the world realize their full potential - there's sort of a magic of software.

I feel like I'm helping advance that. If we advance software, enhance human potential, then I feel good about how I'm spending my time. I have some of the same exact feelings I have today as I did in 1983: Wow, this is an amazing industry and there's so much upside.

It's exciting to be part of Microsoft. It's fun to work with the leader in software if you believe software has the ability to change the world.

Readers can reach Forum reporter Teri Finneman at (701) 241-5560

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