(photo credit: Courtesy)
A visitor to Microsoft Israel’s R&D center in Herzliya Pituah gets the
impression that it’s business as usual. The center’s new general manager, Yoram
Yaacovi, who took up his post on July 1, walks around in jeans and a T-shirt.
His predecessor, Moshe Lichtman, can still be seen in the hallways and manager’s
In his first interview in his new job, Yaacovi told Globes, “My
replacement of Lichtman was the less important change in June.” Yaacovi will
manage a staff of 600 to become the strongman on the Israeli scene after serving
for three-and-ahalf years as the R&D center’s CTO. As far as he is
concerned, he is simply moving offices at a company that he knows
well. He previously worked for Microsoft Israel in 1993-2004, before
moving to Amdocs Ltd. He has now closed the circle.
Corporation’s search for new ideas resulted in a change of attitude towards its
strategic R&D centers in China, India, and Israel. “I never saw the company
treat its R&D centers as it treats them now,” says Yaacovi. “If finding
human capital that is not available in the US is why it is operating R&D
centers around the world, then it is necessary to attract these workers with the
most interesting things.”
The list of interesting things in Israel
includes core operations, such as the Windows InTunes operating system, which
aims to provide infrastructure for computing resources of cloud computing
enterprise customers, which Microsoft launched a few months ago. The Israeli
center also works on business intelligence. Both these projects reached
Israel six months ago and occupy 100 employees.
Microsoft Israel’s focus
on these two projects follows a period of uncertainty. In October 2010,
Microsoft cancelled a large telecom project that employed 100 people in Israel.
There was concern that some of them could lose their jobs, but most of them
ultimately joined the new venture for which the company hired 20-30 new
employees. Some of the employees on the Microsoft Gansos project moved to work
on online projects, such as location-based services and
Yaacovi prefers to look at the glass as half full. “We
present this to the company as our competitive advantage. It proves that we pick
up and continue after a setback. We want to handle projects on the newest
things, even if they are liable to fail and be closed down. We’re built
precisely for this; we’re the start-up nation. As far as I’m concerned,
it’s perfectly fine a project is closed down and we move the people on to
Microsoft is currently dealing with a computing
environment that it has barely ever touched, and is working intensively on
internet infrastructures and computing components for smartphones, tablets, and
other devices. It is also dealing with a new interests map that includes changes
in its collaboration on PCs with Intel Corporation. Online operations and
Microsoft’s search make it difficult to compensate for losses of revenue, and
the company is chalking up heavy losses in these fields.
R&D centers are supposed to provide the answers to make the company the
industry leader in the next five years in a world in which the computer
experience will be totally different from what it has been. Microsoft’s
crossroads may serve the interests of Microsoft Israel.
“We invest a lot
of time in thinking about in what to invest to move the industry and company
forward,” says Yaacovi. “How you create opportunities for the local development
center and don’t just let things happen.”
Microsoft’s model is Intel,
which turned its Haifa R&D center into a strategic asset. Intel Israel’s
general managers in the 2000s, David Perlmutter and Muli Eden, gambled on the
energy-saving Centrino processor while Intel was urging stronger and faster
processors. Perlmutter’s success helped him become Intel EVP and general manager
of the Intel Architecture Group, and his name has been mentioned as a possible
successor to CEO Paul Otellini.
“Intel’s corporate politics would not
have allowed the Centrino processor to be developed at the Israeli development
center if their idea was company demand,” says Yaacovi. Microsoft Israel learned
the lesson from Intel. “We’re looking for our Centrino,” he declares, and he
wants to expand R&D operations into an independent source of profit with a
substantial presence in Microsoft’s global operations.
To achieve this
goal, Lichtman and Yaacovi expanded the Israeli R&D operations, which
recently became part of Microsoft Research, which gives the Israeli center
access to early-stage technologies that are not yet core technologies at
Microsoft. These include social media marketing, which could become a future
growth engine for Microsoft Israel and the entire company.
retirement after 20 years surprised many at Microsoft. He was considered
Microsoft Israel’s primary ambassador at headquarters in Redmond. Several top
Microsoft executives have also left the company in the past years, including
Microsoft Entertainment & Devices Division president Robbie Bach, who
represented Microsoft Israel at headquarters. In January, Satya Nadella
replaced Robert Muglia as president of the Server and Tools
Nadella now represents Microsoft Israel at headquarters. As the
man in charge of cloud computing and infrastructures, he is more in tune with
the Israeli R&D center’s interests than Bach was. “I feel safer than before
about the center’s activity because we’re in safe hands,” says Yaacovi.
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