Microsoft puts government sales in new Washington unit

Microsoft Corp. has reorganized its government operations so that U.S. federal, state and local and foreign government sales, marketing and consulting are all under one roof in Washington.


The Microsoft Government group is headed by Pete Hayes, industry vice president, and employs some 1,000 people. U.S. government people report directly to Hayes; those outside of the United States have a dotted line to him.


"We're creating a loosely grouped, virtual organization," Hayes said. The change became official July 1, but Hayes said it had been months in planning.


The unit will have an active consulting staff comprising nearly half the people, Hayes said. Yet Microsoft Government will derive only a single-digit portion of its revenue from services.


"The preponderance of our work is with solutions-based partners," Hayes said, meaning Microsoft will try to connect government customers with third party developers ? including systems integrators ? who have built proven government applications that run on Microsoft software platforms.

Such applications could be already deployed anywhere in the world, Hayes said. His group also manages channel-to-government relationships.


Microsoft, which derives about 10 percent of its annual $25 billion revenue from government, has been traditionally strong in public safety, law enforcement and criminal justice. It is a major subcontractor to Electronic Data Systems Corp., Plano, Texas, for the Navy-Marine Corps Intranet project.