Guanxi (the Art of Relationships) : Microsoft, China, and Bill Gates's Plan to Win the Road Ahead

1 Beast from the East November 8-11, 2004 This is a new kind of manufacturing in China. Not just shoes, socks, baby strollers. Now we manufacture MIT students, papers, and software. -- HARRY SHUM, MANAGING DIRECTOR OF MICROSOFT RESEARCH ASIA Half a world away from the calm beauty of Puget Sound, there's a lab where Bill Gates's software dreams come true. At Microsoft Research Asia, the drive to succeed is as intense as the traffic that roars by its front door in unbridled fury. If the software megagiant's other facilities around the globe seem idyllic, this one, in Beijing, is pure street. Microsoft's mantra here: work hard to get in the door; work harder to survive; then work even harder because the real work -- that of creating the global future of computing -- is just beginning. If you find it hard to root for Microsoft, you've probably never met Harry Shum. The Beijing lab's managing director is hearty, engaging, and quick to make jokes. In his late thirties, he's also surprisingly young. "This is a new kind of manufacturing in China," he smiles, waiting outside his office. "Not just shoes, socks, baby strollers. Now we manufacture MIT students, papers, and software." His longtime colleague, HongJiang Zhang, walks by and concurs. Cultivating talent, he says, "is another level of 'Made in China.'" Zhang, who's a little older than Shum and initially comes across as more reserved, heads the Advanced Technology Center. An offshoot of the research lab housed in the same building, this first-of-a-kind division was created to accelerate the movement of the lab's technologies into Microsoft's product pipeline -- for China and the entire world. Together, Shum and Zhang lead a nearly 500-strong organization that looks like a typical corporate lab butfeelslike a hungry start-up. Come in at almost any hour and you'll find scores of students -- in addition to their staffs, the two groups support some 300 interns at any time, most from Chinese universities -- tooling away on projects jointly supervised by their professors and Microsoft researchers. It's a place where 10,000 resumes arrive in a month and interns spend some nights on cots next to their cubicles. Add the buzz of Mandarin conversations, the window views of Beijing's sprawl, and the hint of cigarette smoke, and you are constantly reminded: this isn't corporate U.S.A. anymore. Every week is busy here -- but one particular week in early November 2004 was special. The events packed into that whirlwind week spoke to every level of the company's strategy in the Middle Kingdom -- and to the all-out, breakneck pace of global innovation today. To celebrate the sixth anniversary of the Beijing lab's inception, Shum and Zhang entertained a host of distinguished visitors from around the world. The dignitaries included their superiors from Microsoft Research headquarters in Redmond, Washington: Dan Ling, vice president of research, and his supervisor, senior vice president Rick Rashid, one of a handful of Microsoft executives who report directly to Gates. Also on hand were notables from the lab's technical advisory board, which encompassed some of the biggest names in computer science, among them Chuck Thacker, winner of the 2004 Draper Prize, a $500,000 award considered by many to be engineering's top honor; Jitendra Malik, chair of the department of electrical engineering and computer science at the University of California, Berkeley; and Victor Zue, co-director of the Computer Science and Artificial Intelligence Laboratory at the Massachusetts Institute of Technology. In addition to a series of advisory board meetings, the frenetic week would include a Faculty Summit of 207 professors from throughout Asia, many of whom collaborated with the lab, and the Computing in the 21st Century c