Exit Interview with Microsoft's E&D Chief (Continued)

Q: I started with a hard question, but I should have asked you just generally, how are you feeling about things at this point, and personally, as you look back over your evolution at Microsoft and the company's evolution along with you?

Bach: Yeah, I mean, I suppose at some point over the next six months I'll get nostalgic about it, but I'm not quite there yet. Three days in I'm not quite there yet.

You know, mostly I have this gentle blend of excitement, because for me personally I look forward to the next phase of my life. I'm fortunate enough to be able to make that conscious choice and be able to decide when to do it and how to do it, but I'm excited about that.

And then at the same time, that's balanced with the knowledge that Microsoft is an amazing company that's been great to me and to my family. I have tons of people here who I work with every day who I think are amazing, and who I think are going to drive success.

So, it is a little bit of mixed emotions. You know, I don't have second thoughts but I care a lot about how things work for the people who are here. So, it's that blend of being enthusiastic for the opportunity I think I'm going to have in the future, and at the same time really wanting to make sure the right thing happens for the people who I work with and for the partners and customers who I work with.

Q: Do you have any inkling in your mind of whether you might eventually return to corporate America and work with some company?

Bach: Oh, that's a good question. I think, you know, if you asked me today, I think it's probably unlikely, but ... then again when I started at Microsoft it was pretty unlikely I was going to work on the Xbox business, too. So, I've learned never to say never. But it would run a little counter to the things I want to do. So, I suppose there's some way in which that could happen, but I don't really think so.

I mean, the really is what's going to happen is the next six months I'm going to work for Microsoft, and I've got a lot to do. There's a lot I want to accomplish for our teams, for our people, with our partners. We've got some big launches coming up. Even though I won't be running those, there's ways in which I can absolutely help.

And then I will take some time, and I'll probably take, you know, three or four months where mostly I'll be working on my waistline and my backswing.

Q: No basketball?

Bach: No, basketball has slowed because of the state of my knees.

Q: I've seen you hobbling out onto stage.

Bach: There are times when my knees really bug me. I'll be working more on my golf game, but I will take three or four months just to decompress. I mean, 22 years -- it's the only place I've worked since business school. So, I want to take a little bit of time, and then we'll see where I go.

Q: As you're leaving here, one really interesting thing that's happening in the industry is that you've got the mobile phone and the PC really converging. And Microsoft, at least for the past few years, has separated those two businesses. Do you see them becoming more integrated? Which side does Microsoft come at that from?

Bach: I think there are ways in which they are separated and ways in which they are very much together. I'll give you an example. Our Windows Phone 7 is probably the most integrated product we've ever done in the company, and it will use the browser technology from the Windows team. It will use Windows Live.

Now, is it -- does it run Windows 7? No, because Windows 7 wasn't designed to be on a 3.5 inch device with different battery requirements and a radio connected to a cell tower and all the other things that we do. So, it's not literally the same, but there's a lot of integration that happens between those two. And I think there's even more opportunity for us to do more of that in the future.

Having said that, the way the markets actually work is pretty different. They're not exactly the same. I mean, they don't run the same, they don't act the same.

And you also have just the sheer question of scale. I mean, running the Windows business and running the phone business are two both big scale opportunities. So, you sort of say, okay, well, what superhuman four action heroes are going to manage both of those things, and that's really hard to do. You know, Steven Sinofsky is great at what he does, Andy is great at what he does. Steve will be involved in both, and I think that's the right way for it to work out. But the interaction with the teams will continue, and there will be a lot of that. Already is today.

Q: I'm thinking more of the tablet area. Should that be the mobile or should it be something else or should it be a cross of the two?

Bach: Well, tablet is an area that will evolve going forward. Certainly it's a focus for what we're doing in the Windows space, and how they're thinking that space. We're going to have a bunch of netbooks and tablet stuff that's in the works there. We'll just see how that evolves. I don't think there's anything earth-shattering about that. It's just another set of devices, and we'll figure out how we make sure we bring a good offering to consumers.

Q: Natal on the Xbox is clearly something that's going to be on the radar later this year, and actually coming up in a few weeks as it's unveiled. What impact do you envision that having on the Xbox business and on the console industry more broadly?

Bach: Well, I think initially it presents a great opportunity for us on Xbox. You know, if you think we have, what, close to 40 million consoles in the world, and every one of those consoles can work with Natal. So, there's a tremendous opportunity from a business perspective to produce a new experience for people without shipping a new console. I mean, that's sort of the Holy Grail in many ways of the console world is how do you ship completely new game experiences without actually forcing everybody to start over again, and I think Natal certainly presents that opportunity.

You know, now when I think about the broader impact, I think you're going to feel that over 12, 24, 36 months, because I think we'll do some great experiences out of the gate, and people will say, wow, that's really cool, and then the creative teams will really hit their stride, then the technology team will really hit its stride, and how it integrates with Live will get enhanced. Because it's software and services oriented, you've got three, four years of some really cool innovation that can happen.

So, for me it's a jumpstart catalyst. It's a midlife kicker for the 360, and it's an opportunity to really drive that business in a dramatic way.

And by the way, the existing business is pretty darn good, and we have Halo Reach coming out this fall, we've got some cool Xbox Live stuff we're doing. Even in what you would consider the existing Xbox 360 business we've got a very good business dynamics going on.

So, I think it's a good opportunity. I think Don has done a fabulous job getting our team into shape, and getting the right people in the right place with the right bets, and now it's just about execution. You know, we've got to finish Natal, we've got to finish the games, get the marketing done, and get it out there to customers.

Q: There was a Goldman Sachs report from a business perspective that suggested that Natal could be a billion-dollar business for Microsoft. Is that realistic?

Bach: Wow. I suppose it depends over what timeframe and what you attribute to Natal. I mean, that's always hard. You know, we certainly think that Don's Interactive Entertainment business can be a big standalone business for the company, there's no question about that, and Natal will absolutely contribute to that.

When we sell more consoles as a result of Natal, does that count as Natal or does that just say, hey, we've got momentum in our Xbox business? I don't know how to do the accounting on that.

But certainly we think that's a great business, and one that I think Don is really uniquely positioned to lead. He's a great combination of a guy who's a CEO-type guy who knows how to run a business, but yet who understands great creative sensibilities and understands how to work with creative talent. You don't see that kind of capability very often.

Part 1: http://www.techflash.com/seattle/2010/05/qa_microsofts_robbie_bach_on_his_tenure_companys_future.html%E2%80%9C">Why Bach is leaving after two decades
Part 2: How Project Natal could impact the Xbox business
Part 3: Lessons learned, and thoughts on Microsoft Courier
Part 4: Did Microsoft spend too much developing Xbox business?

Earlier Today: Bach, Allard Leaving Microsoft in big shift for consumer business ... Microsoft CEO Ballmer's memo on Bach, Allard departures 

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