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Hello, Future!
By Fengting Xu, Business Times Magazine
March 20, 2009 1:00 PM PT

What does future technology look like? Microsoft TechFest and the Retail Experience Center delivered a message from the future: We do everything for your good! We do everything to benefit more and more users.

Want to enter characters? Just draw in the air, and the computer will understand your script! Want to transfer files? Just point your finger to the file icon on the screen, and whip your arm to “throw” it into a computer on the opposite side of your office. The sales clerk in the supermarket was too busy to answer your question about a product that interests you? Your shopping cart will let you know when you wave it against the cart.

Perhaps computer technologies in the future will be able to help us with much more than just these.

Highly privileged, the author was able to pay a visit in Feb. 2009 to Microsoft headquarters to take a personal look at TechFest, an annual event where Microsoft's fundamental research division shows off its findings, the Home of Future that resembles a home ten years from now, and the Retail Experience Center, which just opened this January. The highly packed agenda of this trip (during which the author tried her best to keep her eyes from blinking and her jaw from dropping) saw the unveiling of computing technologies for tomorrow as well as decisive attempts by Microsoft to make its transition from a "software giant" to an "experience giant".

TechFest: Bridging Research and Products
-- Innovation Attributed to Accumulation and Cross-over

Feb 24. Redmond. It drizzled, and then the weather turned fine.

“Ren-Li-Fang…what on earth is this project for?” A reporter from Israel voiced his doubt trying to pronounce its Pinyin transliteration correctly. A confident Zaiqing Nie, lead researcher at Microsoft Research Asia and owner of this project, asked him to enter his name in a search box. The reporter was immediately presented with a chart of relationships concerning him.

To his greatest surprise, the “relationship ring” of this reporter even included Barack Obama. He had interviewed this newly inaugurated President of the United States not long ago.

"We wanted to make the TechFest a test field to probe English-speaking people’s impressions of Renlifang,” Nie told the author, adding that feedback from English-speaking users is “consistent with those of users in China.”

Officially released in China in last August, Renlifang Relationship Search is a new socialized search engine, which can automatically extract proper names and Chinese phrases from more than 1 billion Chinese Web pages, search the relations between key words and all proper names, and then automatically decide on direct distances among them, their data volume, and specific locations. On the automatically generated chart, people can see lines among all icons with tags marking interpersonal relations.

Nie admitted frankly that the biggest challenge facing him is more accurate data mining and scope expansion. The practicality of this project, however, has not been a personal concern to him. At Microsoft, people engaged in fundamental research do not have to worry too much about whether their research results would be integrated into any product. Microsoft Senior Vice President Rick Rashid said his researchers almost always get the “green signal” from product groups as long as they are interested in personally involving themselves in product development. “At Microsoft, technology transfer follows no set rule,” he said.

Initiated in 2001, Microsoft TechFest has been dubbed “a bridge between research and product.” Several hundred researchers from the six Microsoft Research labs flocked to Microsoft's headquarters and spent two days with their colleagues in product groups to share more than 150 of their latest research findings. They include both internal innovations and joint projects with external academics around the world. This year’s TechFest saw some 40 latest findings from Microsoft Research Asia, packing breakthroughs in fields of online services, entertainment, and user experience, which will provide important support to Microsoft’s business diversification in the future.

Another presentation from China also turned out to be an eye catcher at this TechFest: Write in the Air. The user can literally input anything that can be drawn with his or her hand in the air. When this is perfected and turned into a usable product, keyboards and mice will likely rest in peace in museums.

It is more amazing to discover that this project took less than six months from project initiation to the development of a prototype. Project owner and researcher at Microsoft Research Asia Qiang Huo attributed such highly efficient progress in innovation to “accumulation” and “cross-over.”

It is learned that Write in the Air relies on two key technologies, handwriting recognition and trajectory capture. Neither is new, but no one had ever thought of combining the two. Researcher Lei Ma instantly gained the consent of his teammates in September 2008 when he put forward this proposal.

“This has been a very pleasant innovation,” said Huo, adding that the project was driven by users’ needs, because “wives and children would be able to easily enter their selections when playing Xbox.”

Innovation need not be earth-shaking – one that makes use of existing technologies and gears may also deliver astonishing results.

Retail Experience Center: The Next Consumer Goods Supplier?
-- Impact of Technological Innovation on Daily Lives

Feb. 25. Redmond. It was overcast, and a bit rainy.

It was drizzling, and our driver took quite a while getting us to the Microsoft Retail Experience Center, which was opened a little more than a month ago in Redmond. The center is housed in a small building similar to the other ones on the campus, only with a sign that says “Retail Experience Center” at its gate. Only after entering the building could you tell how it is different from the others; the center feels more like a home appliance store but only with a few “customers” that included the author and several other visitors. The “shop assistant” on duty today happened to be Stephen J. Sparrow, marketing manager at Microsoft Retail Division, and we happened to be the first batch of Chinese “customers” he had received.

“Each visitor here is able to try more than 25 innovative Microsoft technologies and practical sales solutions from Microsoft partners,” said Sparrow, stressing that the Retail Experience Center reflects not only Microsoft’s moves toward becoming a technology provider for the retail industry, but more of Microsoft’s efforts in changing its role into a consumer goods supplier. “How would technological innovations affect consumers’ daily life and shopping experience?”

Microsoft claims to have been investing substantially in this regard, and the formal opening of this Retail Experience Center on Jan. 12 was deemed a major step. The Center, for its part, had been opened as early as last year to selected visitors, such as hardware manufacturing partners and retail channels. Microsoft will be quarterly re-adjusting in-store layout based on visitors’ comments and new technology trends.

“It has been our leading mandate to cut costs, to create efficiency, to optimize operations, and to market efficiently,” said Sparrow. These are reflected in every detail of this shop, from shopping aisles to employee lounges, from the reception and delivery office to cashiers, and even from the Internet to the users’ residences.

Among these new technologies, I was most impressed with the Microsoft Digital Advertising Solution – LCDs mounted on shopping carts and on the walls play automatically generated commercial messages meant for different customers. "When groups of kids flush in after school in the afternoon, more advertisements on video games will be played, which would be sharply different from noon-time messages designed for housewives," said Sparrow with a hard-to-notice self-confidence.

Besides massive “in-shop” trial of new technologies, people at Microsoft designate much of their brain cells to the development of retail strategy. “Counter height, table color, and intensity of lighting, all these are factors we have to consider.”

Innovations at the Retail Experience Center may not have been so fruitful were it not for brilliant minds. For instance, before joining Microsoft, Sparrow had once worked in Sun Microsystems, supervising retail marketing. David Porter, Sparrow’s boss and Microsoft Global Vice President of Retail Stores, who took office this January, is also incredibly experienced, as he has weathered 25 years at Wal-Mart and was once responsible for global product distribution at DreamWorks Animation. Porter and his team are gearing up to open more retail outlets.

Investing in Fundamental Research Is Investing in Future Survival

Microsoft believes that a company will survive in the future only if it invests wisely in fundamental research. This is not limited to Microsoft, but for every country and the world at large.

Amid the economic downturn, how can Microsoft as a leader in the IT industry deal with the halo and shackles of being a “software giant?” What support will Microsoft have for its fundamental research against waves of lay-offs across the world? And how will technologies find an efficient way of transferring themselves into products at Microsoft?

With these questions in mind, the author had an interview with two Microsoft executives during the grand opening of TechFest on Feb. 24. The two executives were Craig Mundie, Microsoft chief research and strategy officer, also known as one of Bill Gates’ successors, and Rick Rashid, Microsoft senior vice president in charge of the six Microsoft Research labs around the world.

Q: Which projects we see at this TechFest do you think will become highlights during the current economic downturn, and even will get us out of the slump?

Mundie: In different ways, I think. There are a number of things I think could help. One of the things I am particularly interested in is new ideas for user interface technologies. The key part of it is going to be moving beyond the pointing-clicking-typing model of interaction, as we see in all computing devices – not just in computers and cell phones but increasingly TV, mobiles, and other devices. The importance of changing this model of human interaction becomes more and more critical. And I think that is one of the things that tend to help get things booming. Particularly in emerging economies and environments, where a lot of people and governments are quite interested to invest in things like healthcare and education via their stimulus programs. But the key part of providing those services mainly, are in fact by letting people benefit from them through non-traditional means.

Rashid: I want to add, one of the values of basic research in some sense is you just do not know what is coming out of it. You invest in basic research and long-term research; it is precisely because you do not know what the future is going to hold. In some sense, you value basic research because you are building a treasure chest of ideas and technologies, and smart people that can be called upon in difficult times, and in situations where it is important to leverage them. Many of the technologies we have invested in had no real value to the company at the time when we were working on it, but two or three years later they became critical to our success.

Q: Microsoft announced not long ago to lay off 5,000 of its current employees. How will this decision affect Microsoft Research?

Rashid: So far, Microsoft Research has been least affected by this layoff. One of the secrets behind Microsoft’s success over the past 30 years has been that we take basic research seriously, which enables us to keep exploring new fields and continuously deliver new technologies and products. The research department serves as a sowing machine. You don’t eat the seeds when you are hungry. When it comes to return on investment, both Bill [Gates] and Steve [Ballmer] had said that Microsoft Research was among the Microsoft divisions that generates the highest ROI.

Q: I observed that Microsoft was first focusing on personal computers, but this time, are you seeing any boundaries as to what you are doing, or in particular areas you are focusing on that are important to the company in the future?

Rashid: Our focuses have certainly grown, but it is really growing within the field of computing sciences. Today, computer science is relevant to a very great range of disciplines. You will see that we are working through a number of areas including biology, astronomy, chemistry, or physics. We are doing things like working on AIDS vaccine, looking at malaria and hepatitis. There is a broad collection of fields that computer science is relevant to. And also, during the years when Microsoft was growing tremendously as you pointed out, like in 1991, when Microsoft Research was started, we were a very small company with just a few thousand employees, and a very small set of products. Today Microsoft as a company really spends on a very broad range of businesses, all related to technology, related to software. But just as the field of technology is expanding. so is Microsoft.

Mundie: I heard many people saying that Microsoft is a PC company, but in reality, we are a software company. We will follow software to wherever it has interesting applications. So we never thought of it in device-specific ways, as much as it is software-specific. We are doing hardware around the sides, too. But clearly our expertise will remain in software, and we will apply it to whatever level, and whatever devices are appropriate.

Q: Microsoft is an exception in the market, where companies are investing less on basic research due to constrained budgets. What is your logic?

Mundie: I think of research as one of the things we have to do, and we select to do in order to ensure we survive over the long term. The reality is that a great many companies have a relatively short lifespan. And even fairly big and great companies at times have a fairly natural lifespan that seem to be 30 or 40 years, when you look back over time. Many companies, I think, facing short-term pressure select to eliminate, or perhaps never start any fundamental research activities. They say “I can get it by acquisitions, or just by pursuing development.” But I think it is one of the things that contributes to their long-term demise. They actually help improve their short-term return, but it does not guarantee their survival over the long term.

So Microsoft at the very beginning emphasized that we have a very long-term perspective, and we approach not only technologies that way, but many other business issues around other investments.

Rashid: And if you go back to the beginning of Microsoft Research, it was willing to invest in long-term fundamental research even when the company was relatively small. And if you look at Microsoft’s competitors in that particular point in time, they did not really do that. Basically, most of our competitors are not with us anymore. I think investment in basic research is about investment in our survival. I think that’s the value of long-term basic research, not just for Microsoft Research, but frankly that is why as a country or as a globalized society we need to make those investments.

Q: How do you turn findings from basic research into actual products within Microsoft?

Rashid: There is always a dialogue that goes on in many different ways when research or technology is transferred to the product organization. You know, in extreme cases, on one side they just read our papers just like anybody else does – they just decide to use these ideas in their products. On the other side, we have other research teams who have actually given birth to a product in their particular area and nurtured it all the way through to its final phase. I look at technology transfer in a manner where it has four contacts, and I don’t think it necessary to have rules. Sometimes the researchers are extremely involved in their product development activities because it thoroughly interests them, and the product group decides to carry it forward. In other cases, they just move onto another problem. I think there is no specific way. There is no magic formula. Pick up anything you can imagine, and that happens once.

Mundie: One of the really good things, I think in our case, which has been supportive throughout many years is that if a research team wants to transfer the technology to the product group, and actually participates in the productization effort for one or two product cycles, we welcome it as a way of doing the technology transfer. Clearly in those cases, there is a continued involvement, and they always give us a free return-trip ticket that says when you want to return to basic research function, you can come home to research. And I think the freedom of people to make that cycle is one of the ways we are able to have the continuing impact.

Rashid: Many of the large product teams or groups in the company were historically derived from research. Early examples, going back to 1992 and 1993 when I was still working with Craig, I created a research group that was specifically working on streaming media and interactive TV. We built a product team from that and spun that out in 1996 that became the Digital Media Division, and it eventually became what is now our Entertainment and Devices Organization at Microsoft. The first e-commerce group in the company was the group that I managed one time; the earliest DirectX was a product that came out of research. So it is a long history of products, technologies, and people coming out of research and moving into the product group organization. But at the same time, there are lots of other examples as well, which are different.