Moonlighting in pursuit of new applications

If you have a smartphone, you probably have apps on it to check the news, play games, help with shopping or further a hobby like travel or bird-watching. But chances are that you don’t yet have Bubblegum — a new app that lets you instantly dress up cellphone photos, tinting them in sepia or adding neon blue highlights, for instance, and then share the results on Facebook.

That’s because Bubblegum is an app for a nascent market: people whose smartphones have the new Windows Phone 7 software inside. The phones have been on the market for only a few months in the United States. (Four models, including the Samsung Focus, the HTC Surround and the LG Quantum, are each $100 at the Microsoft Store.)

But if many people are to choose them in a crowded field led by iPhones and Android-based devices, these new phones will need a large dose of an essential smartphone aphrodisiac: apps by the armload that add games, social connectivity and many other features.

Because the platform is new, developers have to learn its ways before writing many of those apps. So to add them quickly, Microsoft has taken an unusual step. It has relaxed a strict rule and will let employees moonlight in their spare time and keep the resulting intellectual property and most of the revenue, as long as that second job is writing apps for Windows Phone 7-based devices.

And they don’t have to do that work quietly. The company is having weekly pizza parties for workers who pitch in to write code for the platform and is planning ways to publicise their work, including posters and awards of recognition, said Brandon Watson, director of developer experience for Windows Phone 7. Free Windows 7-based phones were given to all employees in the 19 countries where the phones are available.

The downside is that if an app doesn’t catch on, there is no money in it for the employees who developed it in their leisure time. This makes it a less attractive incentive than, for example, some of those at Google, which has a policy of permitting engineers to spend 20 per cent of their paid time on projects of their own choosing that benefit the company.

But the rule change at Microsoft change is a departure for a company that, like so many others, has traditionally wanted its engineers to give their all to their core jobs, said Michael A Cusumano, a professor of management and engineering systems at the Sloan School of Management at Massachusetts Institute of Technology. He is also a co-author of ‘Microsoft Secrets’ and the author of the recent ‘Staying Power’, which has several chapters devoted to the company.

“Engineers work all hours; they don’t punch a 9-to-5 clock,” Professor Cusumano said. “Normally, you want your employees to pour their passions into their jobs. If they do something else on the side, you don’t cheer them on.”

Watson of Microsoft said the policy change emerged in part because of a push from his group. “We tend to have strict moonlighting rules,” he said of the company. “But we’ve changed those rules so developers can do this in their spare time, and have the financial benefit and outcome of the work.”

The company is offering what Watson said was a standard split on app sales: 70 per cent to the developers, 30 per cent to Microsoft.

Good response

The incentive seems to be helping. More than 3,000 employees have registered to submit apps, he said, and about 840 have been published so far.

One is Bubblegum. It was written by a recently married couple, Sriram Krishnan, a programme manager working on the company’s cloud computing platform, and Aarthi Ramamurthy, a programme manager on the Xbox team.

Krishnan said the app work was definitely done in their spare time. “We were on our honeymoon in Hawaii when we started working on it,” he said. “But we like to write code.” (They continued working on it during Christmas vacation last year.)

Krishnan said that with the app, he wanted to be among the first to capture the Windows phone user base. He hopes the app will give rise to a mini-social network at its site, bubblegum.me, where users will be able to share photos. “The value will come from how many people are on it,” he said.

He isn’t worried that his side projects might raise eyebrows at Microsoft, and he has already written a second app, a web browser, for the Windows phone. “A check shows up, and I cash it. Microsoft is OK with that,” he said. “They have been hugely supportive.”

Microsoft’s new rules fit into the broader rethinking of how large companies manage research, said Josh Lerner, a professor of investment banking at Harvard Business School. “Microsoft is not just rewarding people for what they do in their spare time,” he said, but is also “harnessing that energy to the company’s ends” to catch up in the mobile market.

“It’s symptomatic of a larger transformation,” he said, as companies unlock more entrepreneurial activity, granting incentives and rewards to researchers in the hope they will stay put instead of moving to other companies.

Professor Cusumano agrees that the change in rules encourages entrepreneurial activity. “Firms like Microsoft that stick around for decades need to reinvent themselves periodically,” he said.

“Microsoft has been knocking their heads against a wall, building more and more bells and whistles for Windows that no one needs,” Professor Cusumano said. “Instead, they can use their staff this way. It’s a way to make every programmer a potential entrepreneur, and it also helps Microsoft gain momentum with its new mobile platform.”

The rule change offers an option for employees who don’t want to leave for the insecurity of a start-up but still want recognition for ideas, said Daniel H Pink, author of ‘Drive: The Surprising Truth About What Motivates Us.’

“This is another way to say, ‘Work here, and you can have the best of both worlds,’ as an employee of an established company and also as an entrepreneur,” he said.