CEO and HR partnership – in the 1 st year of New Economy

1. CEO and HR partnership – in the 1st year of New Economy Nikolay Pryanishnikov, President Microsoft RussiaVladimir Khimanych, HR Director Microsoft Russia

2. Nikolay Pryanishnikov • Jan 2009 - President of Microsoft Russia • 2008 - VimpelCom, Executive Vice President and General Manager for Russia,. • 2004 - Executive Vice President and General Manager for the Russia Regions. • 2000 - First Vice President • 1999 - Deputy General Director and Commercial Director • 1995 - CEO of Mobile Center, a subsidiary of Moscow Cellular Communications • A graduate in engineering from the Moscow Automotive and Road Building Institute • 1996 post graduated with a master in Economics and Finance from the All-Russian Financial Institute. • 1999 - an MBA graduate and PhD in Economics from the Higher School of Economics and Entrepreneurship ,awarding a Research on Strategic Management in Enterprises. • In March 2008, Nikolay has been officially nominated “Young Global Leader” by the World Economic Forum among 300 International nominees worldwide.

3. Vladimir Khimanych • 2006 - HR Director Microsoft Russia • Career in HR since 1995 • Current and previous HR experience includes: • Development and Deployment of Business and Organizational strategies • Development of High Performing Organization; • Compensation and Benefits • Recruitment and Training systems; • Development capabilities of the distributors’ business teams; • Employee and Labour relations management • M&A • Working outside in Russia – in HQ in Singapore and Geneva.

4. Our strategy Communications & Productivity Servers EnterpriseInfrastructure PCs • Corporate strategy • Long-term focus on innovations. Total R&D investments – $9,5B • Investment plan for Russia: 10 bln Rubles in 3-year plan for Russia • Our contribution to sustainable economic growth in the country in line with Russian Government strategic priorities Investment $4.2B Investment $7.2B Investment $2.2B Investment $2.7B Phones Entertainment & TV Search & Ads Other • DYNAMICS • MSN • RESEARCH • HARDWARE • ENTERPRISE SERVICES/AARF • … Investment $1.6B Investment $2.1B Investment $2.7B Investment $1.0B

5. Our strategy in Russia • 6 key strategies in Russia • Extending Reach through regional coverage • Selling and Delivering Solutions • Breaking through in Online • Consumer & Retail • Marginalizing Piracy • Making Microsoft Much more important for Russia • Anti-crisis offers • Customers and partners support: special offers to small&medium companies, discounts for developers (80%), extended credit lines for partners etc • Re-training, support of innovative start-ups, support of Education • Focus on people as top priority – during the crisis more then ever Anticrisis Actions • Regional coverage Consumer & Retail • Selling and Delivering Solutions Marginalizing Piracy • Breaking through in Online Increasing our value for Russia PEOPLE

6. What proved to be effective in 2009 • Communicate, Communicate, Communicate • Make sure the employees know what is happening with the business what it means: • If revenue falls, what are the consequences: • HC • OPEX spend • Investment opportunities • If revenue grows, what are the consequences: • All opposite • Keep All employees engaged, not only Leadership team • Do not be afraid to make tough choices, but do them fast. Show strong leadership • Assess if you can first do ‘easy wins’ • Always see real people behind abstract numbers and think what impact your decision will make on their lives – this helps to stay balanced • Find balance between what is good for Business and for People

7. Microsoft Russia today • 1994 – start of the Russian subsidiary • 800+ employees • 34 offices across Russia • Mostly Sales, Marketing and Services. Small R&D • Prior to crisis – double digit revenue growth (in FY’07 triple digit), doubling HC every 18 months

8. Choices we made in 2009 • Succession planning – think who will drive the business in 3 years perspective • Internally. Investment in these people continues • Training (e.g. Management development program for all managers continues) • Rotation assignment abroad • Accelerated development programs for HiPo • Externally. Keep market profiling to know top people • Overinvest in your HiPo – they are the source of your competitive advantage • Focus on Top 50 Roles and 50 People

9. Choices we made in 2009, cont-d • Talent Acquisition, Retention and Performance management: • Drive performance management, encourage good attrition • Find opportunities for GREAT talents that we find on the market • Keep pipeline for the key pillars • Graduates (11 FTE hires and 30 summer interns) • Senior – via market profiling

10. Choices we made in 2009, cont-d • C&B and cost management– focus on productivity is NOT equal to savings on people: • Microsoft C&B philosophy is based on (i) performance and (ii) market. It remains unchanged through the crisis. • We can identify easy wins, e.g. • Optimize training agenda, use web based education • OPEX savings, move meetings into virtual mode • Stay competitive, yet real, e.g. reward your top performers and outstanding achievements.

11. Conclusion - HR Strategy • Heart of our business Model and key component of the 3 years growth plan • Driven by all managers, not only HR or CEO

12. Thank you!