Unlike its neighbour, Microsoft opts to stay home
WHILE Amazon is hunting for a second headquarters away from its hometown, its neighbour in the Seattle area – Microsoft – is doubling down on the region, with plans to invest billions of dollars in redeveloping its existing campus.
The project, which Microsoft planned to announce at its annual meeting of shareholders yesterday, amounts to a major overhaul of the company’s 500-acre campus in Redmond, Washington, the leafy Seattle suburb that it has called home since 1986.
The company will take a wrecking ball to 12 old buildings, replacing them with 18 taller ones with more open work environments. The construction will add about 2.5 million square feet of space to the roughly 15 million it has in the area, enough room for an additional 8,000 employees.
Microsoft’s redevelopment, which will take five to seven years to complete, would not ordinarily stand out – lots of technology companies outgrow their offices and need new space. But this is Microsoft, a company that spent years fumbling new initiatives, laying off employees and retrenching from key markets. The bet on a bigger, more modern campus is a symbol of its resurgence over the past few years under its chief executive, Satya Nadella, who has made invigorating Microsoft’s culture one of his priorities.
It is also hard not to notice the contrast to Amazon, the area’s younger and buzzier technology company. After Amazon announced its plans for a second headquarters, cities and regions laid out tax breaks and other promises to lure the planned 50,000 highpaying jobs to town.
Amazon said it received 238 bids from across North America and is whittling down the list to a group of finalists, with a winner to be announced next year.
Amazon’s move has also caused much introspection in Seattle. One portion of the population worries that the area is losing its competitive edge. Another would not mind if Amazon and its tech ilk left the region entirely, along with the soaring housing prices, traffic and other symptoms of its booming economy.
Brad Smith, Microsoft’s president and chief legal officer, said the company did not intend for its hometown expansion – which he described as a multibillion-dollar investment – as a comment on Amazon.
“I don’t think we’re out to make a statement about what anyone else is doing or not doing,” he said. “We think this is the right decision for us.”
Still, Smith could not resist a slight dig. “When it comes to headquarters, one is enough, we feel,” he said.
Today Microsoft’s Redmond campus has most of the trappings found at the sprawling headquarters of tech giants in Silicon Valley – the soccer fields, manicured lawns and oceans of parking lots. That will not change on its renovated campus, but Microsoft is taking a different approach in other respects.
The new buildings will be clustered closer together. They will also be taller – four stories instead of the two or three that are common now. There will be a new underground parking facility, a 2-acre open plaza that will serve as a central gathering place and new walking and cycling trails.
“There’s an opportunity to build a somewhat denser campus and create a somewhat more urban feel,” Smith said.
Microsoft’s older buildings are known for private offices with closing doors, many of them with the feel of rabbit warrens, with narrow corridors. The new buildings will have more open spaces to encourage collaboration. Microsoft has already started to renovate buildings to make them more open.
The company’s decision to stay put at its Redmond campus flies in the face of a trend among technology companies to gravitate closer to cities. The abundance of amenities, night life and public transportation in urban areas has led to thriving tech scenes in San Francisco, New York and other cities.
“My gut reaction is, ‘Wow, they seem kind of out of touch’,” said Dan Bertolet, a researcher at Sightline Institute, a nonprofit in Seattle focused on sustainability. “All the young people I know who work in the tech industry out there want to be in Seattle. They pooh-pooh places like Redmond.”
Tech companies are also finding that the talent they are after increasingly wants to live in cities, not suburbs. That has led suburban giants like Google, Facebook and Apple to operate large private bus services to ferry workers to their headquarters. Microsoft’s own bus service has more than 94 buses and more than 4,000 daily riders.
But those buses also frequently sit in soul-crushing traffic. Possible relief for Microsoft’s commuters will come in the form of light-rail that will connect it to Seattle. A light-rail station on Microsoft’s campus is scheduled to open by 2023.