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Episode 8: Acompli, Sunrise, and Wunderlist (w/ Kurt DelBene)

Episode 8: Acompli, Sunrise, and Wunderlist (w/ Kurt DelBene)

Mon, 29 Feb 2016 17:00

Ben and David have special guest Kurt DelBene on to discuss Microsoft's acquisition of Acompli, Sunrise, and Wunderlist. Kurt is the EVP of Corporate Strategy and Planning at Microsoft, and joins to discuss Microsoft’s cloud-first, mobile-first strategy, and the importance of being cross-platform in the modern era. They cover:

  • How the app of Outlook Mobile on iPhone and Android came to be.
  • How to decide whether to build vs. buy, and how it plays into the strategy for Office.
  • How to preserve a culture and a team, and how Javier Soltero came to run all of Outlook at Microsoft.
  • The origin of Outlook on the PC, originally led by Brian MacDonald as “Ren”.
  • How to balance a business with competing priorities, and a decision-making framework for acquisitions in a large company.
  • How to measure the success of an acquisition, and how sometimes, it’s not by measuring revenue at all.

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Our presenting sponsor for this episode is not a sponsor but another podcast that we love and want to recommend called the founders podcast. We have seen dozens of tweets that say something like my favorite podcast is acquired and founders so we knew there's a natural fit we know the host of founders well David sender. Hi David. Hey, man, hey David. Thank you for joining us. Thank you for having me. I like how they group us together and then they say it's like the best curriculum for founders and executives. It really is we use your show for research a lot. I listened to your episode of the story of a key on marita before we did our Sony episodes this incredible primer. You know, he's actually a good example of why people listen to founders and to acquired because all of his greatest entrepreneurs and investors they had deep historical knowledge about the work that came before them. So like the founder of Sony, who did he influence Steve Jobs talked about him over and over again if you do the research to him. But I think this is one of the reasons why people love both of our shows and there's such good compliments is on acquired we focus on company histories. You tell the histories of the individual people you're the people version of acquired and where the company version of founders listeners. The other fun thing to note is David will hit a topic from a bunch of different angles so I just listened to. An episode on Edwin land from a biography that David did David it was the third fourth time you've done Polaroid. I've read five biographies of Edwin land and I think I've made eight episodes of them because in my opinion the greatest such a printer to ever do it my favorite entrepreneur personally is Steve Jobs and if you go back and listen to like a 20 year old Steve Jobs. He's talking about Edwin lands my hero. So the reason I did that is because I want to find out like I have my heroes who were their heroes and the beauty of this is the people may die but the ideas never do. And so Edwin land had passed away way before the apex of apple but Steve was still able to use those ideas and now he's gone and we can use this ideas and so I think what acquires doing what founder trying to do as well is find the best ideas in history and push them down the generations make sure they're not lost history. I love that well listeners go check out the founders podcast after this episode you can search for it in any podcast player lots of companies that David covers that we have yet to dive into here on acquired. So for more indulgence on companies and founders go check it out. For score and seven years ago our forefathers brought forth in this continent how far can you go with that I actually forgot that's as far as you got. You didn't even get that far why did you learn in civics and elementary school who got the truth is a you is a you is a you is a you city down say straight another story on the way. Welcome to episode number eight of acquired i'm Ben Gilbert i'm David Rosenfall and we're your hosts. Today we have a very special episode we have a guest at Microsoft Kurt del Benny yeah we are very lucky to have Kurt del Benny with us today. It's been a great friend and mentor to both of us in different ways and actually both of us at Madrid on it too so Kurt. Uh started his career actually at the very famous and renowned Bell Labs and spent five years there and then went to booth and got his MBA at Chicago. Went to the short stand at McKinsey after that and then went to Microsoft and had an over 20 year career at Microsoft that. Um culminated when Ben was there in in Kurt being the president of office which he was until December 2013 and and then afterwards he went to to and did a stint there helping launch Obamacare and after that ended up with us for a little while we're really lucky to have him at Georgia as a venture partner and and then last spring Kurt returned to Microsoft and is the EVP of corporate strategy and planning so thank you Kurt for gracing us. Hey it's good to be here and good to talk to you guys again just one little correction on I came in after the launch to help them repair it. You did and and for for listeners I had the privilege of waking up early early one morning and coming into here. Kurt talk about that at Madrid on it is absolutely fascinating to hear how to mop up a gigantic software project like that and getting all the right people on the bus all the right consultants and contracting firms that that are putting that whole thing together is a crit that that looked like an absolute ballet. Well it's it was super rewarding and super challenging so maybe we can do a future podcast just on that it's a good it's an interesting topic. You needed to you needed to get some good R&R so you went to a venture firm for yeah that's 10 months afterwards. So today with Kurt we're going to talk about hopefully a very topical acquisition and we're actually going to lump a few in here but the main focus is going to be a complete which is now the mobile outlook on iOS and Android. So I'm going to run through quickly we're going to do a complete and then we'll sprinkle in little bits of both Sunrise and Wonderlist which are also office productivity apps that Microsoft all acquired in the past 18 months or so. And so I'm going to run through quickly the acquisition history in fact a complete founded April 2013 by J.J. Swang and Kevin Hendrixson. It's interesting how you was CMU engineer and then an early employee at Netscape and how you spent three and a half years at B.M. where before kind of coming back to his productivity routes and founding a complete which I was a user from from day one when it launched in launched in beta and thought it was on my iPhone and thought it was just a great. If really the first mobile app that combined male and calendar all in one app. The magic that outlook have been doing for so many years and no one really innovation what's old is new again. There is a $7.3 million series A from red point led by red point where have you ever been in EIR after B.M. where and Harrison metal and Felicis and then about 18 months later Microsoft acquired the company in December 2014 for reported $200 million. It was interesting there's actually a everybody knew this acquisition was going to happen because Microsoft wrote a blog post about it and it leaked about two weeks before the acquisition actually actually went live. Yeah not a shining moment not a shining moment but but it was successfully acquisition happened there about 25 employees all based in San Francisco they all joined Microsoft. And David that was only I think like seven eight months after launch nine months maybe I think it launched in April of that same year it was it was 18 months less than 18 months after the founding of the company. And so it was very quick and this was right after drop box had acquired mailbox so is the era of email mobile email acquisition begun the iOS mail app wars have yes. Shortly thereafter Microsoft then acquired the calendar app sunrise in February 2015 and then in June of 2015 Microsoft acquired wonder list the to do list app which I know has probably has a soft spot in Kurt's heart knowing how much he loves lists. It is a great app I joke when that happened I think with Kurt that Microsoft was trying to buy my entire iPhone home screen. Exactly so what you'll have to tell us at the end what you usually these days I am still using all of these products that's an endorsement right there yeah yeah so with that you know what's happened since then angel at that same time right after. The wonder list acquisition have you is actually promoted within Microsoft to be the corporate VP running all of outlook so not not just the outlook mobile app but outlook on desktop as well. Shortly thereafter after that sunrise calendar was rolled into outlook wonder list has has remained independent today but has been announced that further integrations may be coming on that front so maybe Kurt can enlighten us on that but with that. Kurt would love to hear kind of how you thought about about all of these products sure so the first thing I should say is the acquisition happened during my time away from Microsoft but I know the whole history of it the corporate strategy team was which I lead now was intimately involved in the in the acquisition so and I obviously know the space super well I spent a ton of time in office so when I saw it happen I said okay this one makes complete sense. I mean there are different reasons that Microsoft makes acquisition says I'm sure there are for all companies there are places where we look at our position in particular area and say we need a technology we need a particular product there are other cases where we opportunistically look at. A product or company that's doing well in a space and say wow we can see a and a Jason C to the business that we have and so we want to. We want to acquire the company to kind of build up build out that a Jason C there's some more rare cases where we'll do it to get a particular set of talent you know we see a team that's super super good. But I think that tends to be the exception this one was the was kind of I would say a strategic acquisition if you think about the journey that office has been on the core competency has been on the desktop you know the office suite and I by desktop I mean both the windows PC and. You know kind of leading productivity on the Mac as well and so coming from that core as other OS's became popular particular in the mobile space. The team actually was a corporate strategy effort with the team with the ASG team as well said okay this is clearly a place where we've got to to make an acquisition or build ourselves but we need to have. A great app for the core office 365 scenarios and those are email contacts countering and to do and so we said do we want to make or do we want to buy and is there somebody out there that we would love to have. And really just said okay what would if we do want to acquire what would that look like what would look like to make it internally and are there candidates there that would be great for us to quiet so that's what kind of got started on the path. And it kind of went from there cool thanks Kurt I think it's one of the things that you read a lot about these days is Microsoft shifting from the windows and office company to a mobile first cloud first company and you know I think that from a high level first of all as a consumer and just you know from the public perception of Microsoft these days everyone is loving that I mean the whole focus on. You know you can build a really great cross plasma experience have your the same data with you everywhere access to the same services you know the same core office services that you know in love huge value proper consumers. As you guys transition to you know these free mobile apps that are on platforms that you don't own how do you look at that as sort of the revenue future of Microsoft and how does that replace the the giants of you are with selling windows and office box software. The giants of your I love that. I think there's a couple ways to look at it the first thing you see after recognize that office 365 the cloud versions of exchange share point and Skype for business are strong and rapidly growing revenue streams for Microsoft in you know by themselves so in some sense it's always been the case that when you buy exchange you get a client experience. That goes with that you know go all the way back to the exchange clients in the mid 90s there's always a client that came with it and that model has stayed and so again looking at a conflict particular they were really developing a very fast leadership position in terms of downloads in terms of monthly active users. That was very appealing to us and so I think just that's a natural to when it comes to mobile you've got to have a certain free experience and then you can think about having a paid experience incremental to what the expectation in the market of what is free so in the case of email you know the expectation is you're going to have a single client that will work against your free mail but also work against your enterprise mail you can think about features that you put behind a file. You know a pay firewall we do that by having certain tiers within office 365 and then there's certain tiers within the client to which is also available is a subscription so we think about there's a certain free thing that free piece that you want to give to everybody there's a certain set of features that can be made available as add-ons there are particular areas where that works well so features where to communicate to somebody else you got to have the paid one that doesn't work. Because you want to have a common capability across the across all the people using the service but things like enterprise features like retention policies and anything around usage analysis et cetera those are all features where people will pay for pay extra for them but you don't have to build it into the core product. So we definitely see the ability to kind of tear things that way. The other thing you have to think about is people have multiple devices you know they have a PC they have an Android phone they have a Windows phone they have a Mac and an iPhone and so you have to think about the client experience as being a single set of client experiences that go across all those different devices and if you can package those together into a subscription then you can sell the value proposition of the entire subscription. Regardless of what device you happen to have but then again you still have to think about we need to have a leader leadership position in all of the devices that people find popular and so we want to have office be the best experience regardless of whether you're on an iOS device whether you're on an Android device you know we'd love to have you think of windows as your home but we need to have a great experience regardless of the devices that you use. Well I think this is something that Microsoft and you have really done a great job with I mean going back to the origin of office 365 and when you were working at Microsoft you were working on office prep at right. It was that was so much fun. Well we finally we did get around to shipping that. I experienced with my male client or with Excel or with word on it on a particular device now it's about how that works in concert across all of the areas where I'm doing my computing. So I think a related area that I'm curious if you guys thought about with the Accompli acquisition and the strategy is something that been touched on the unified inbox and I remember in my first job in finance out of college. I had obviously Outlook was working in a bank and all of my work email was on Outlook on my computer and my workstation and the iPhone had just launched and I loved it because it meant I could get my Gmail at work. And now you know the concept of having different inboxes for me at least is something I think for probably most of our listeners is something that we wouldn't even think about anymore it was that was that part of the strategy here too. Yeah I think that Accompli does a great job of giving you a single unified inbox, the Windows phone also on its client also can get you can link together a couple inboxes together. But if you go all the way back to when Outlook was first created it was a total different look at what has historically been separate products for email versus countering that we had schedule plus those of you hold her in your your blogosphere listeners will remember schedule plus it became a verb it was so popular. And in fact still still echoes around the hallways of Microsoft about sending us pluses around exactly every time I correct them and I call it a meat it's a meeting request schedule pluses long since dead. But this notion that things come together and become unified it really just follows how people expect to use the product so when you start building a bunch of meeting request capability into schedule plus all of a sudden it starts to look a lot like email. And so Outlook and under Brian McDonald who is the kind of the father of Outlook way back when it was called Ren as in Ren and Stimpy he had this idea that you want to bring these different mail and calendaring and tasks all together and do a single user experience which clearly has been born out early on the versions of Outlook were not up to the task really I will say in retrospect there was a period of time when Outlook was called look out. Because you wanted to stay away from it because it was pretty slow when it first happened but it's become really the leader in this integrated set of products and and I think that's happening on mobile devices as well because those scenarios are so deeply integrated together. I think you find calendar deeply integrated that's why sunrise got integrated into complete task management actually is a little bit different and so we think that there's you know if anything the mobile the paradigm and mobile is different applications for different use cases and so it's not necessarily the case that what you do for the PC is what makes sense to do on a mobile device as well. And I can tell you there are any particular plans to take Wonder List and in a deeply integrated with a compley with a scenarios crossover probably makes a lot of sense but then you know the personality needs to be preserved with those different applications and we think they're big applications in and of themselves. Yeah and it's a great lead into you know we're talking about integration of software right now let's talk about integration of people how what were the different options you guys looked at for how you could integrate the teams in terms of location in terms of hierarchy in terms of you know focusing on retention and what decisions did you guys make with primarily the complete team. It's a really it's a great question that it is super super important for us to retain the both the particular talent the fact that there are team as well but also the personality of the of the organization itself so it is not this. This get integrated into the collective and you are just part of Microsoft we were really really hard to keep the teams separate while we take the opportunity of being part of Microsoft to be an accelerant to the objectives of the of the team and so a lot of folks. These teams come on and they're just super excited about being able to leverage the key the breadth of Microsoft to do more great things. Unless unless I'm mistaken all of these teams are still in their original locations well that's the other thing none of them are in red man right it doesn't make much sense to have everybody come to red man it's it's not necessary we are already a broad company that has locations everywhere and so there's not a need from that perspective and you know there's no purpose in the moving they have cool locations they have homes were their family are. And so in most cases we actually don't relocate them and that's definitely been the case here as well the wonderless guys are in Germany and they love being there and we're just as happy to have them there as well I mean the nature software is it is a global business now and so we can definitely accommodate that the other thing that we've tried to really do is figure out how do we take advantage of that the skills that the team has and the vision that they have that's why you see how the air become the leader of outlook overall and that's just a recognition that hey these guys did something really incredible and we want to make sure that we take advantage of that as much as humanly possible and so that's a we definitely look for cases like that as well I mean the third thing I would say is the trickiest aspect of it from our perspective is we have places where we want to drive synergy between the two of us. And so we have synergy between their product and other products at Microsoft and that's a very very tricky piece because these guys all come in with a set of plans that they have in place that they want to accomplish and if you divert them too far from that mission you can ruin this what's special that you you did the acquisition for in the first place. So we try to be really really careful I'm not sure we always get the balance right there sometimes when we over index on the integration and we find that we lose a little of the secret sauce because the product starts coming out more slowly in the innovation doesn't come through as well and we're learning all the time too and so I'm not sure we always get it right I actually think on these acquisitions that we're talking about we we set the balance pretty well. Yeah and I can speak to that I just put out a tweet a couple days ago sort of asking about who's using outlook for iPhone and I got a response from someone I knew on the team over there and you know that his response was something along the lines of let me know how you like it we move fast and I want feedback and it seems like that team and I I'm not certain but I think he was at Microsoft pre acquisition so it seems like some of that DNA sort of leads into the existing team and kind of lights a fire. Yeah even simple things like if you if you use outlook for for iPhone there's a way actually for either platform you can give user feedback on the product directly from within the product from the context that you're in and it'll bundle up everything that it knows about what you're trying to do and basically send it directly to us. And so that's a place where you know we'd love to take those learnings of how they got that that 360 feedback loop and really really intensely follow it and collect the data so as your friends said they move they can move super super fast. Yeah and from a leadership perspective when you have people that have made their whole career and their their life's work outlook and then you do an acquisition like this and the leadership of the broader outlook become someone from this new and outside team you know how do you how do you make sure that lands organizationally well it actually it's not as hard as you might think that probably the biggest challenges if you've got particular people who were in line for that job. Or a job in specific it's you know I think it's a misconception that people at Microsoft are are not you know are not open or embracing of new things to come in I'm not actually even sure if it's a misconception is definitely not the case and so when a new team like come this comes in and and in comply in particular or any of these products and rise wonder less it's like it the overall view is oh my god. This is a fantastic thing what's in what's bring them in let's embrace them as a team let's learn from them and we'll all do great things together so it's not as hard as you might think. Yeah absolutely particular particular positions where somebody from the entering team might get a get a position that somebody else might have thought they were in line for. When I remember when I was promoted to corporate VP and hearing hearing about it in the press but then also hearing friends of Microsoft talk about it you know so often you know you see you know we see looking at lots of acquisitions the CEO or the management team of the target company all end up you know with some meaningless VP title at the query and they'll stay for 18 months until they've asked and then they're gone and on to their next thing and this is a major major role at Microsoft and really was you know I don't know if promotion is the right word giving that he was CEO of a company but a real recognition of a scope that that that really was was much broader than than just the accompli mobile app absolutely and it was it truly was a recognition that he has skills that we want to leverage more broadly than just within the complete team per se and it's working out really really well actually was going to bring this up later but you know have you wrote in the blog post announcing the acquisition. Yeah he wrote the he wrote these these sentences here that I'll read 18 months ago we started building a team and a product around the idea that we can make mobile email better today that journey continues as part of a larger organization with the technology talent and market reach that will help us take the vision of a complete to hundreds of millions of mobile users across the world and I just thought when I read that as we were researching this episode you see some version of that in every acquisition that gets announced you know yeah we you know we're going to get the scale and the resources that are really going to enable us to impact many more users and usually it's pretty hollow but but here you know I could as to you and the Microsoft for really giving a giving them that in truth but but but it's really rare to see the team embrace this as much as as how you're in the complete team have yeah no I appreciate that and it really was the intention you know that there is a bit of a scale difference to though because there are a billion users of office across the planet and so if you were somebody who wanted to see your vision get delivered just think about it just in the context of business users that say hey I'm running office and I'm going to do that. I'm also getting paid back into future business to work with this chapter we're going to get the work at the aqui chart so as you'll notice inside the office all right I can just say re I kon what the briefly talk about is free business and all the privacy and now Microsoft says we have a great outlet client for iPhone and for and refriger Sports able to take advantage of that in terms of getting a stronger footprint and mobile right there. But, you know, Javier was right in terms of the leverage that came from just announcing it and starting to distribute it with office, etc. We gave him a big boost and we took advantage of the boost that they gave us as well. I'm curious as you were, when you made the acquisition, did Javier's background from Netscape and then from VMware especially. Did that play into it? Did you Microsoft see him as a potential leader when you bought the company and was that a factor? Well, we definitely look at the specific talent as part of our due diligence process. I would not say that we, there are times when we actually do look for talent as the, as I discussed earlier, as a primary reason for doing an acquisition. The primary reason for this acquisition was they had a great product in a space that we thought was super complimentary to us. And so, you know, that's the reason to do it there. But we definitely look at the talent and figure out how do we retain those key people along the way. The other thing that I would say is there's this whole question that often comes up, at least at Microsoft, and I'm sure elsewhere, is there are times when you think you can buy the second best or the third best person or product or company and there are times when you know you just need to buy the best. And this is a case, all three of those are the case where we wanted to buy the leader in the space. And in that sense, if that's your first and foremost goal and you believe you got a great team, then the acquisition kind of writes itself. It just makes it ton of sense and it works out super well. And that's what kind of what happened this case. I want to push on that a little bit. Why is it so important to have the absolute best clients, wonder list and outlook for iPhone and sunrise? I guess that'll eventually just be an outlook. When those are our free products that can access both Microsoft services and other services and the money is made on Office 365 subscriptions, which can also be accessed by a variety of clients. That's a good question. I think above all, we now live in a world where individual pull of applications is, in particular, categories like email is incredibly important and in some ways more important than the push that can happen from Microsoft saying this is our solution for email. And so that's a big piece of it. So when you see this, it's not. That's a big mindset. Yeah, it is. It is. It's not, you know, there are places where we think we can quote unquote make the market by driving innovation, you know, defining innovation, delivering on it and making a category. I think SharePoint was probably an example of that. And there are other places where other people are establishing what that category looks like, particularly on form factors like mobile. And you just recognize it and say, you know, this is a place where we just want to get the best. The other thing is you always want to give yourself every advantage to do well. And in that case, if you're also having to overcome the fact that there's a leader in front of you that's got incredible end user pull, you know, it's just not worth settling for that second best app. It's true. And if you're kind of following in the footsteps there, I mean, the client app is really the front door to the consumer experience. So I guess there's always that risk that that client app could start prioritizing a different service. I mean, you don't own that customer relationship at that point unless you're the leader with the client interface. Yeah, I think that's a different kind of acquisition, which isn't unheard of. There are sometimes when you can acquire an application. And I don't think we ever do it. I can't think of a case where we have ever acquired anything purely for the sake of getting it out of the hands of a competitor or keeping it from being independent. It is a kind of nice byproduct in some cases where, you know, we think there's a good reason to have this application. And by the way, we'd rather the other guy didn't have it. But I don't think I can't think of a single time when that has been a predominant reason. It's kind of a nice bonus, if you will. It's really interesting that you say that the last episode we did was on YouTube. Yeah. And one of the really cool things about YouTube is there's all of this publicly available information about the company and about the acquisition because of the lawsuit, the Viacom and YouTube and ultimately Google lawsuit. And it's interesting, Eric Schmidt testified that one of the key reasons both for the acquisition and for the price they paid for YouTube was the opposite of what you're saying was to keep it out of other people's hands. Really? You say whose hands they wanted to keep it out of? He, I don't believe he named specific competitors, but implied that they were other very large technology companies. I stand by, I can't think of an acquisition that we've done for that reason. You know, at the heart of it, the other thing I would say is, you know, Microsoft is a, we are a product and a technology driven company. And what we're trying to do within each of the product groups is what is the, you know, the dominant meme, if you will, about the discussions that we have. It's like, if you own the office business or you're part of the team, you're always thinking about your own product and how do you make it stronger? How do you make it better? You're not thinking about how you use it as a chess move, how you would make it acquisition to be a chess move that keeps something out of somebody else's reach. I don't know. Then you are there. Have you, do you remember ever having such an acquisition? No, not while I was there. And I can't imagine too, like the, just thinking about the rest of the office for iPad team, like if we had bought one of the weird kind of like office clones for iPad that we were looking at as sort of like the not doing so well, but decent competitive landscape and like tried to bring them into the team that that would have been really messed up. Yeah. You know, the other thing about it is it's, there's a certain amount of risk in an acquisition period. And so everything, you want everything going for you because there's always going to be things that help mess it up when you, when you bring it in. So, you know, having some ulterior motive, which is pulled out of somebody's hands versus being led by what you want to proactively and positively do with the product, it just doesn't seem like a very good calculus to me. But maybe that's what Eric really had in mind when he bought YouTube. I don't know. You know, it seemed to work out for him pretty well. So, they added that one not super highly. Is that right? Yeah. We gave it a C or at least I did. Wow. You guys are tough creators. YouTube, 10 years later is a break even business. They've lost a lot of money on that business. Wow. I guess that is true. And huh. Is it break even on an annual basis, including advertisements? As far as our research could determine, yeah. Interesting. I don't follow that space super closely. So a lot of cogs in that business. That's true. Both on the technology and on the content and talent side. Let's move on to, we're going to do two other categories that we like to do on the show or segments. First is Ben and I both and Kurt, you're welcome to join in too. We assign a category to each acquisition we're looking at. And the categories we typically use are people, technology, product and business line. And we give ourselves an out of an other. But Ben, you want to go ahead? Yeah, absolutely. This is a product acquisition. There's nice things that came along with it. But OWA, the Outlook Web Access app, was just not good. And as someone that was at Microsoft and using it for quite a while, I was getting a lot of encrypted mail in IRM. And so I had that old Outlook Web Access installed on my phone just to read the encrypted mail. And then I'd get out of there as fast as I could. And I'm like rooting for the home team. Sorry, I'm trying so hard. And it was a shame seeing all these other really great mail clients out there. And this is right when mailbox and a company were popping up and useless for a lot of my mail. So even just as an exchange user at Madrid, it was really frustrating because all my friends who were working at startups were using mailbox or the Gmail app and they were great. And look, it came not a moment to see it. I think that for me, a company, I was using it before the acquisition. I was using it after the acquisition. I thought it was super impressive. It turned around time from going from being acquisition where they were trying to work out exactly what it was going to turn into and what the timelines were going to look like and what the people were going to look like. You can kind of like, you always figure all that and I'll take like six months or so. Within two months, it shipped as Outlook for iPhone. And all the new stories were kind of funny that they just slept a new label on it. Maybe they did, but who cares? It was great. That's a really good point. At some point, you don't want to mess with success and instead of legal things you got to do to make it a Microsoft product, but that's probably what took the time. But keep giving people what they love. Yeah. So I'll go next and I'm curious Ben and particularly Kurt may beat me up for this one. But I'm going to go out of the box on this one. I'm going to call it another. And I wrote down combo meal because not only because it was multiple acquisitions, if you include Sunrise and Wonderlist. But I actually think there are elements of this that as there are in every acquisition, but here that they really hit on every category we've talked about a lot of them already. I would say the reason for this is it was really a revitalization of a business line. Not a creation of a new one, but a rethinking of an entire business line, in this case, being outlook as part of the broader office future in a mobile first, cloud first world. And part of that is technology and part of that big part of that is people as we've talked about and product as well. Yeah. I'm going to go with combo meal. I think there's something to that. There is, I would say it's predominantly a product acquisition because that was, we had in mind something very specific we wanted to acquire. But there's clearly synergies with the other parts of the office business. And office products, so think about the fact when you download a piece of email that has an attachment, you want to fire up word to read that attachment. There's a way of linking those scenarios together that goes towards your combo meal theory. But you need to establish a footprint on mobile devices and the first workload, if you will, that people use, or the first three, I would say, are the three that we acquired in these three acquisitions. And so in that sense as well, it was reenergizing the businesses also. So I guess I would, I think there's something to that. It's a, maybe it's a combo meal that has at its heart a product deal. Maybe we call that a happy meal. That is interesting. You talk about the key scenarios on mobile there. It's like, you know, now office is a full productivity suite and a mobile lightweight productivity suite. And those are dramatically different applications. I love the framing too that you have a pair of workloads and what's your mobile workload. And I think the office mobile apps word and PowerPoint and Excel are great, but I almost never use them. My mobile workload is email calendar to do. Yep. Now I think that's right. The usage, we find that the applications are primarily used for great viewing, which the fidelity of viewing in our applications is better than others. And then light editing, which means, you know, there's scenarios like I mentioned if you're reading a document in word. And there's a set of comments that or edit revisions that you've got to take a look at and react to and edit with others that are working on the document. It's those kinds of scenarios for which you would use word, Excel and PowerPoint, PowerPoint, you know, presenting, presentation mode works really well. But you have to rethink the scenarios. It's not just that you imagine doing the same things on a mobile device that you do on your desktop. They're just different. Let's move on to, I want to make sure we have enough time for my favorite part of the show, which is our technology themes segment. And Kurt, so what we do here is each of us talks about, and again, please join in, we'd love to get your thoughts. You know, kind of what does this acquisition or these acquisitions highlight for you in terms of the eternal truths about our business and technology. And Ben and I usually take a start up, Ben, on this. But it'll be, I'm curious on your take, you know, having been a big tech company for so long, having done a stamp with us, you know, in the venture world, what themes are. So maybe, maybe Ben and I will go first, give you a little time to think about it. But you know, for me, I'll go because this will be quick, we've really already touched on it. But one big theme that all of these acquisitions highlight for me is, I think Kurt, I think you said it, you know, innovation is distributed. It's global today, you know, a company is in San Francisco, Sunrise was in New York City, Wonderlist is in Berlin. We haven't talked about it yet, but and it's not in the same group, but Microsoft also recently acquired Swiftkey, another part of your strategy to take over my iPhone. But they're in London. And again, don't know about Swiftkey, but the plan with, with all of the previous acquisitions is keep these teams where they are. And I think in a world of, you know, in the consequence of this mobile first cloud, first world is, you know, with GitHub, with Slack, with Dropbox, with AWS, and yes, with, you know, Office and Skype, you know, innovation can come from Redmond and Mountain View and San Francisco and Seattle, but also Berlin and also London and also New York. And what's important isn't, isn't so much the location, it's about the quality of the products. And I think about when we talked with Ed Fri is about Bungie and how important it was to keep the Bungie culture, but they had to move them down the street to Redmond. You know, today they would have stayed in Chicago. The one for me is, you know, translating a theme that we heard about over and over and over again five years ago, kind of one level up the stack. So, you know, it's been out of the news cycle recently that Fri is bring your own device because we all know that yes, the BIOD world is here to stay and people choose their own hardware, bring their own hardware to works and for a long time and kind of still, it's a nightmare for IT folks. I think we've taken one step further on the stack and it's really bring your own client. And to the extent possible for, except for, you know, certain very secure applications, the consumer expectation is that I choose the view in which my data is presented to me and I view that data that is from a service that is mandated. So either you choose your own service as a consumer and you choose Office 365 or Dropbox or a variety of different mail services or like you work for a company and that company has a set of services, you don't necessarily assume that that set of services comes with a mandated set of clients and you sort of expect, I choose my own software to consume those services. And I think for me, like the reason why I think that this was so important is, you know, if there are three best in class applications that people are going to choose to consume their services, it's kind of great to own the unified experience and be able to provide all the best connections between the two or the three possible. Yeah, this is really important, you know, certainly the desktop operating system wars have been over for a long time. But you know, the mobile operating system wars over two and nobody won. Like the points of interest and dynamicism in computing and technology, the sort of technology meeting consumers and products these days, it's not, you know, iOS or Android or Windows or Mac or platforms or even browser versus desktop versus mobile. It's really shifted to the app layer and it may soon shift to the messaging layer. We'll see. Now, I think there's something to do with all of you said and I think those are all correct things. For me, it's hard for me in this one, the thing that if there's a theme for me, it's that good products rise to the top inevitably. And you look at one of these products like a company like Sunrise, like Wonderlist and you just look at them and you say, wow, this is a great product. And you know, it's that excitement that we all have when we download a new app and it just, it changes how you, it changes how you work, it changes how you work with others etc. And each case of these, these were products like that. So as a theme, I think it is these products well crafted by creative artists that, you know, really think deeply about how the user uses them, have that passion. They went out and they, you know, they get that opportunity to be in, you know, tens and hundreds of millions of users across the planet. So that's one theme. It just seems like that recurring, that excitement that you get when you see a product like this that's really well done and to have that, those teams succeed by part of the acquisition, I think is one key part of it. And then the second one for me is just that we are constantly learning of what the best way to execute these kinds of acquisitions is and we constantly get better at it. And I think we as a company took another step at getting better at it with these acquisitions, recognizing how do we keep the people energized, how do we, as you said, David, it's a global world and let's keep the teams where their families are and where they are. It's not about bringing them all to Redmond. And so we continually get better about it as well. And consistent with that is, you know, we're a bunch of engineers and product people and we just love to, you know, you get these talented teams, you bring them in and, again, part of this getting better is to having them become in leadership positions too in our company and help us all get better and deliver better products as well. Yeah, it's really interesting. I think there's an interesting question that comes to mind in just thinking about some previous Microsoft acquisitions and then, you know, the world that exists today. Microsoft is a company that has a diverse portfolio of businesses across many different customer segments from enterprise to consumer and kind of all the way up the chain. Not all these businesses have aligned priorities. I mean, for Windows, it's to have all applications be best in class and first on Windows. And for, you know, office, it's to have the best possible integrated experience across all platforms. How do you, when you do an acquisition like this, make sure that the leaders of all those organizations and that all the organizational priorities align around spending, you know, what comes to in total near half a billion dollars on a productivity suite that for iOS and when you're a Windows, you know, on the executive over in Windows. Yep. Well, you come in with a set of premises that are the fundamentals about what the fundamental assumptions under which you're making the acquisition. And in this case, for these apps, it was clear the cross platform was a key part of the acquisition premise. And so in that sense, one, it has to be championed by the leader of that particular product group, so Chi Lu in this case, and there has to be strong support there. And it has to be championed by the CEO as well. And so, Sacha has to look at the acquisition and say, you know, I like this acquisition. And Terry Myerson, I understand this doesn't specifically help you. I think it indirectly helps you by making our services strong and making Windows an outlook for Windows, a great experience that also works on mobile devices. And this is relevant. Terry, you've heard listeners as head of Windows, right? Yeah, Terry, Terry leads Windows. But there's always a balancing that happens. And you go into it not thinking that there's a, there may not be as strong a value proposition for some of the businesses as others. And any time you have a company that is as large as ours and there we're not the only one of the size, there's always going to be this balancing of priorities that comes out. The thing that you have to, that we are constantly pushing towards is don't let that balancing priorities mean that you're mediocre in everything. And you really have to say that, for example, in cheese business for the, for office to be the leading productivity solution on the planet, we've got to have a great story around cross-platform. And so you really do, it's excellence for all. It's not about the balancing out at some mediocre level where nothing is great. God, that's a great point. That's a really good way to think about it. Thanks Kurt. Sure. Should we, should we wrap up? Yeah, yeah, yeah. Render our grades. Yeah. But before I do that, I have a question for Kurt. So, you know, this, this acquisition is typically too, or probably too early for the ones we usually do on the show. I mean, usually we like to see a little bit of proof in the pudding that you can like look at some spreadsheets and see, hey, you know, they bought the company for this much and it turns out, you know, there's a lot of other ancillary value, but we can definitely attribute this value gain to the acquired property. And there was a multiplier on the value of the acquisition for the acquireer post acquisition. Great clean math. Nice to justify. You know, we can look at Instagram being a multi-billion dollar business inside of Facebook right now and being acquired for a billion and go great investment, guys. How, with this business, you know, it's definitely too early to say for sure one way or another. I think we need to wait a few years. But, you know, how do you look at the success metrics of, you know, we dropped some number of hundreds of millions of dollars on this suite of applications? What are you looking for from a financial perspective on a return? And how could you possibly measure that? You can't. And we don't look for a financial measurement on everything that we do. In fact, we very explicitly have set of metrics that are around performance and others that are around, are we making progress in our category or, you know, so-called power metrics of, do we have strength among users in using our products? And this one, the metrics around these products are all in that ladder category. It's all about how many people are using and loving the product. And you can't even draw the indirect, you know, mathematical connection to greater office sales and we don't even try. So we set goals that are for these products that are around how many month-week active users do we want to have? What's the level of engagement that we want to have with the products? Because we have confidence in the premise that if those are strong users, it will pull through sales of office. Now the place where we do do some measurements is around customer sentiment about, you know, do you, what fraction of the office users are also using unruable clients? You can also make a measurement of what the value is of a customer that is both a user of the core office applications and the users of the mobile applications as well or do they use one drive, for instance. And we do find that the value of those customers are higher because they're more highly engaged users of office. And so that if you want to come up with a mathematical equation, I suppose you could, we don't tend to look at it that way, but we do tend to do these, you know, conjoined analyses of, you know, the connections of the different products today and what that implies about the strength of that particular user as a customer. That is very cool. And you know, it's great to, you know, I think this is one of the reasons why we started this show is to talk about stuff like this, you know, it's so opaque what acquires are looking for and what happens to companies post acquisition. And it's just, yeah, it's, thank you for that. And it's great to get that insight into how, you know, we talk about categories of acquisition and we're thinking more from your ethical perspective, but, but yeah, what really is the, you know, the measurement that you guys are using for different kinds of acquisition? Yep, definitely different, different by acquisition. Yeah, grades, Ben. Grades. So I'm going to allow myself a plus or minus factor. That's the tolerance in which my grade can go up or down in notches over time since we're kind of early. And I'm going to rate it a B plus right now with a two notch variation. So it could go go to an A or B minus, but it's, it's, it's solidly an A or a B. I'm going to go, you know, I've been thinking about this for the whole episode. I'm going to give this an A and I'm going to say that because I'm thinking about this in contrast to we did an episode on Siri and Ben and I were both, we were both quite, quite harsh in our judgment of that. And I, and I, and I, one of the reasons is clearly virtual assistance and voice based computing is a major paradigm that is important for technology companies going forward, you know, Amazon, but, but Apple's really not done so great on that. And I think about in contrast, office and Microsoft having been the leader in productivity and when these acquisitions were made really, you know, I think, I think Microsoft was under a lot of threat from a lot of different areas from Google docs to startups like Evernote, the other male and calendar clients and task lists out there of which there were several. And here we are several years later and I am 100% an Apple guy and I love my cloud services and Dropbox and Slack and. Dave, you are looking at a Google doc right now. And I'm looking at a Google doc. And yeah, it's, it's a good one. And yeah, you know, I've joked about it several times when Microsoft basically owns my productivity on my iPhone. I use Wonderlist every single day all day. I use Outlook for iOS every single day all day and the calendaring features are the real differentiator for it. I use Swift key. Oh my God. Send availability and outlook is like the best feature. And I contrast that with with Siri and I just think it's been a huge huge win. So a lot of work to do to keep it up, but good job, Kurt. All right, well, I'll take those, I think I'll take those and go grab a beer or to celebrate. But I hope you'll, I'll help you ask me back and Ben, we can celebrate you change and you're great to an egg. All right. Sounds good. Thank you, Kurt. All right. It's been a pleasure. See you guys. You got the truth.