Joseph Tartakoff at the Seattle PI has seen an internal presentation describing how Microsoft will be retrenching in Redmond area real estate in view of the economic downturn:
An internal planning and scenario PowerPoint presentation reviewed by the Seattle P-I shows that Microsoft is set to delay the construction of all new buildings in Redmond, except one, for at least three years. The company also will not renew most of its leases when they come up for renewal this year and next.
According to a Microsoft spokesman, some of these leases would not have been renewed in the normal course of events as employees moved to newly leased or constructed space. Also, active construction will not stop and Microsoft will still occupy new office space in Bellevue that they had leased last year.
The changes are driven by the deteriorating global economic situation, which has led to a steep hiring slowdown by Microsoft. It is unclear whether the company will lay off any employees, as has been rumored, this week.
But the presentation shows that in December, Microsoft’s Real Estate and Facilities Team developed a scenario to estimate the company’s real estate needs under the assumption that the company’s work force would not grow for the next 2 1/2 years. Beyond then, the planners expected annual growth of 3 percent.
There are more details in the article including estimated cost savings and recent Seattle area hiring numbers, but it reads to me like an accommodation of a hiring freeze, not provision for any wide scale layoffs – exactly as the above scenario describes.
Nicholas Carr is providing this weekend’s Microsoft buzz with a rumor that Microsoft is getting ready to roll out a Web apps strategy if not necessarily any actual apps:
Put your ears to the ground, my friends, for the Beast of Redmond may be stirring. I’ve heard that Microsoft has begun briefing its large enterprise clients on an expansive and detailed strategy for moving its software business into the cloud. If the report proves correct – and I make no guarantees – the company will unveil the strategy to the public either next week or the week after.
The new strategy will, I’m told, lay out a roadmap of moves across three major areas: the transformation of the company’s portfolio of enterprise applications to a web-services architecture, the launch of web versions of its major PC applications, and the continued expansion of its data center network.
And in the latter regard, Carr has a double header – Rumor: Microsoft set for vast data-center push:
I’ve received a few more hints about the big cloud-computing initiative Microsoft may be about to announce, perhaps during the company’s Mix08 conference in Las Vegas this coming week. One of the cornerstones of the strategy, I’ve heard, will be an aggressive acceleration of the company’s investment in its data center network. The construction program will be “totally over the top,” said a person briefed on the plan. The first phase of the buildout, said the source, will include the construction of about two dozen data centers around the world, each covering about 500,000 square feet or more. The timing of the construction is unclear.
You can’t have a good cloud strategy without plenty of capex, of course, but what with the Yahoo acquisition this seems like a fairly stressful time to be raiding the piggy bank. It’s a good thing Microsoft has all those old-fashioned operating systems and offline applications to foot all these bills.
Less snarkily, if these rumors pan out, it will be interesting indeed to see how Microsoft manages to finesse “software plus services” to avoid killing the cash cows while simultaneously avoiding owning some large buildings stuffed with unused computers. And no, I won’t complain about all the times Microsoft disparaged Web apps.
Related: Michael Arrington reports a rumor that Microsoft may also be announcing at Mix08 an offline version of Silverlight to compete with Adobe Air for the Rich (and occasionally offline) Internet Application business.
Russian news reports indicate that Microsoft’s has announced plans for a new mega data center in Siberia:
Microsoft has announced plans to build a data center in Irkutsk, one of the largest cities in Siberia. The facility will be able to hold 10,000 servers, according to Birger Steen, the head of Microsoft’s Russian and CIS business unit. The company’s plans were outlined in a press briefing Friday and reported by Russian news outlets Kommersant and Cnews.
The project appears to be smaller in scope than recently announced Microsoft data center projects in Dublin, Ireland and the Chicago area, and no budget was announced (although some Russian media sources cited the $500 million number for the other projects). No specific site has been selected yet, but Microsoft is said to be considering locations in between Irkutsk and Angarsk, two cities north of Lake Baikal in southern Siberia.
There’s apparently good power availability in the region and presumably also Internet bandwidth, but I guess they won’t have to worry too much about cooling.
The Microsoft buildout of Internet infrastructure continues apace as this week they revealed two new $500 million data centers in Illinois and Ireland: