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Burning the Ships: Transforming Your Company's Culture Through Intellectual Property Strategy

ISBN: 978-0-470-43215-0
208 pages
March 2009
Burning the Ships: Transforming Your Company


Now in paperback, the inside story of "the greatest transformation of Microsoft since it became a multinational company"

Marshall Phelps's remarkable eyewitness story offers lessons for any executive struggling with today's innovation and intellectual property challenges. Burning the Ships offers Phelps's dramatic behind-the-scenes account of how he overcame internal resistance and got Microsoft to open up channels of collaboration with other firms.

  • Discover the never-before-told details of Microsoft's secret two-year negotiations with Red Hat and Novell that led to the world's first intellectual property peace treaty and technical collaboration with the open source community
  • Witness the sometimes-nervous support Bill Gates and CEO Steve Ballmer gave to Phelps in turning their company around 180 degrees from market bully to collaborative industry partner
  • Offers an extraordinary behind-the-scenes view of the high-level deliberations of the company's senior-most executives, the internal debates and conflicts among executives and rank-and-file employees alike over the company's new collaborative direction

There are lessons in this book for executives in every industry-most especially on the role that intellectual property can play in liberating previously untapped value in a company and opening up powerful new business opportunities in today's era of "open innovation." Here is a powerful inside account of the dawn of a new era at what is arguably the most powerful technology company on earth.

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Table of Contents

About the Authors.



Chapter 1 The Collaboration Imperative.

Chapter 2 Like Cortez Burning His Ships.

Chapter 3 Money Isn’t Money Anymore.

Chapter 4 A Very Secret Mission.

Chapter 5 Leadership Starts at the Top.

Chapter 6 The Road Ahead (with Apologies to Bill Gates).


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Author Information

Marshall Phelps is Microsoft's corporate Vice President for Intellectual Property Policy and Strategy and is responsible for setting the global intellectual property strategies and policies for the company. He also works with governments, other companies in the technology industry, and outside institutions to broaden awareness of intellectual property issues. Phelps joined Microsoft in June 2003 after a twenty-eight-year career at IBM Corp., where he served as vice president for intellectual property and licensing and built its world-leading $2-billion-a-year licensing program. Phelps is an executive in residence at Duke University's Fuqua School of Business and was elected to the initial class of the Intellectual Property Hall of Fame in 2006. He may be reached at mphelps@microsoft.com.

David Kline is a journalist, author, and intellectual property consultant who has earned acclaim for his unique ability to demystify complex IP issues and explain them in a clear and relevant manner to a broad business audience. His bestselling 2000 book, Rembrandts in the Attic from Harvard Business School Press, is considered a seminal work in the field of intellectual property strategy within corporate America. As a journalist, Kline has covered some of the world's most critical wars, famines, and other crises for the New York Times, Christian Science Monitor, NBC and CBS News, the Atlantic, Rolling Stone, Wired, and other major media. He may be reached at dkline@well.com.

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"This is a book as much about teams and organizations managing conflict brought on by significant change as it is about intellectual property (IP). Intertwined throughout a series of engaging and personal stories - showing how Microsoft instituted a strategic personality makeover from a monopolisitc bully to a respected collaborative partner - are lessons that every business person can use in building and implementing diverse teams to meet clear strategic objectives.Anyone who invests the short time to indulge the personal stories of this book will come away with a renewed sense of commitment to implementing fully cross-functional teams, as Phelps clearly shows as a key element to the successful transformation of a software powerhouse "going it alone" to spurring innovation and economic progress benefitting all of society." (Journal of Product Innovation Management, 2010; 27)

"Phelps (corporate vice president for intellectual property policy & strategy, Microsoft) and journalist Kline (Rembrandts in the Attic) have written a brisk and engaging book about Microsoft's radical overhauling of its intellectual property (IP) strategy. Phelps, the principal architect of this new strategy, gives the reader an insider's perspective on his struggle to overcome Microsoft's traditional use of its intellectual property as a "weapon" against competitors and to transform the company into a key player in the new business environment of "open innovation….the book is worth reading for its portrait of a major corporation undergoing massive change and for its lucid explanations of IP business strategy. Recommended for serious business readers." (Library Journal, July 15, 2009)

"Could Microsoft’s ability to produce intellectual property be the company’s future salvation? A few weeks ago, I complained that Microsoft wasn’t innovating. Yet the book Burning the Ships talks of Microsoft’s burgeoning intellectual property treasure chest. Burning the Ships shows the way to another outlet for Microsoft’s innovation. Instead of trying to hold their intellectual property close to the vest, Microsoft is beginning to open up the IP treasure chest and let others try to do the work of bringing those products to market." (InformationWeek, June 1, 2009)

"Told with a litigator's attention to detail, Burning the Ships recounts the journey that forced Microsoft to face its own 'succeed or die' moment. It's a powerful high-stakes lesson in strategy and survival that speaks volumes to business leaders of all stripes about the courage required to embrace radical business transformation."
William J. Amelio, President and CEO, Lenovo

"Intellectual property does not show up on your balance sheet, and your board of directors would not recognize it if it were set out on a table in the lobby. But do not kid yourself: in an era of ever-commoditizing supply and distribution, IP is the essential fabric out of which your competitive advantage will be fashioned. Burning the Ships gives you an insider's look into how this engine of economic returns operates and what you can do to maintain it."
Geoffrey A. Moore, author, Crossing the Chasm and Dealing with Darwin

"[There are] many interesting tales in Burning the Ships, a new book that traces Microsoft's moves from intellectual property novice to patent powerhouse. [It reveals how] the company set upon a new course with regard to intellectual property, making peace with longtime enemies, creating a business around its underused technology, and seeking to strike broad cross-licensing deals with nearly everyone in the industry."
Ina Fried, CNET News.com

"A good case study of how Microsoft reinvented itself and began leveraging its Intellectual Property for good (collaboration) instead of evil (punishment). I would encourage anyone working [in the technology field] to read it. I can easily see that this book will be required reading very shortly in most MBA programs."
David Lane, Linux Journal

"Microsoft will always have its detractors -- all powerful and successful companies do -- and there is no doubt that it has thrown its weight around with great force on many occasions in the past. But for those prepared to look at the company with an open mind, this book is extremely revealing about why open source and collaboration have forced senior management to look again at its traditional ways of operating in order to embrace new business realities."
Joff Wild, IAM Magazine

"Burning the Ships recounts Phelps’ behind-the-scenes account of how he overcame internal resistance and got Microsoft to embrace collaboration with other firms. There are plenty of lessons in this book for executives in every industry where accessing previously untapped intellectual property can open up new business opportunities."
Stephen Albainy-Jenei, Patent Baristas

"This book describes a dramatic shift toward business openness and property ownership by a formerly closed, defensive company, resulting in enormous new value for the company."
William New, Intellectual Property Watch

"The book provides a very interesting behind-the-scenes account of the transformation of Microsoft, as well as dealings with competitors during that time."
Peter Zura, The 271 Patent Blog

"However technology evolves, IP strategies will have to evolve with it. This book is a chance to learn from one company's version of that evolution."
Wendy Grossman, ZDNet Reviews

"We've been looking for some new paper to turn here at the Engadget HD offices, and it looks like Marshall Phelps' "Burning the Ships" may be our next purchase."
Darren Murph, Endgadget

"Burning the Ships is a fascinating window into Microsoft's corporate conversion [away from] a "fortress mentality culture and go-it-alone market strategy." Collaboration and partnership are the new name of the game, and IP is the glue that seals such deals. Phelps and Kline offer plenty of behind-the-scenes accounts of strategy decisions and negotiations, and they're honest about how Microsoft was perceived in the market and about how difficult it was to adopt a new approach to competition. The writing is admirably clear."
–Nate Anderson, Ars Technica

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