October 14, 2019

Microsoft Development Center Serbia – Behind the Scenes Of a High-Tech Development Center

Did you know that Serbian engineers are developing Azure and core AI solutions for Microsoft Office? Based mostly on creativity and perseverance, and working since 2005, Microsoft Development Center Serbia (MDCS) has become one of Microsoft’s most reliable centers. It is known for engineering excellence and outstanding mastery of emerging technologies. We are diving into the history of MDCS, but also its present, and some of the cutting-edge projects that emerged behind these walls. How did it all begin?

In 2004, Bodin Drešević had already been working for Microsoft in Redmond for 15 years. He was ready for a major change in his life: he wanted to move back to Serbia and start his own construction company.

But his boss at the time was determined to keep him a part of Microsoft. Bodin didn’t want to work as a single remote developer from Serbia. Instead, they decided to try and form a small team of developers in Serbia and see where it would go. In the words of Milan Novaković, an engineer who has been in MDCS for more than 10 years, the idea that they would one day form a large development center was not on their minds at the time.

It happened mostly by chance and it comes down to individual relationships and efforts. Bodin and his boss didn’t even think about opening a development center. He started off with only one man in his team and then it began to grow organically. There were a lot of talented people involved and projects were going pretty well. Microsoft recognized that, and so they decided to approve more funding for employing 6-7 people in the first year.

Their first two projects were both for Tablet-PC, and both related to handwriting recognition – it was the Belgrade team that created the first Cyrillic handwriting recognizer.

The first team was formed around heavy algorithmic and mathematical computing and projects that required skill sets in these areas. When Bodin came back to Redmond to show what they had done during the first few months of their work, the management was greatly surprised by his team’s success. It resulted in funding twice as big for the second year compared to the funding  for the first one. Also, that’s when they actually began calling themselves Microsoft Development Center Serbia, replacing the formerly modest name Tablet PC Development Extension.

That’s the path they continued to walk year after year. Their funding was expanding, their team was growing, they kep looking for the best Serbian talent.

Of course, in hindsight, not everything went as smoothly as it may sound.. Novaković continues:

We were operating like a startup up until 2012–2013, and there was always a chance that the center would be closed. But we were getting more complex projects year after year and we were ready to execute them well.

During those first years, we were mostly working on some technically demanding parts of certain products, but we didn’t have any touch with the business side. Now, on the other hand, we also have a chance to own every aspect of those projects we are working on.

The global financial  crisis in 2009 was a major setback, with a large part of the team moving to Redmond in Microsoft’s effort to reduce decentralization. Even though the results that the team presented in 2009 left the Redmond management in awe, the number of people who stayed in Belgrade almost halved, and OCR (optical character recognition), one of the signature teams in MDCS, was reorganized inside other teams. This is the moment when Dragan Tomić, who also returned from the US, became the MDCS lead and who continues to run the center to this day.

SQL, Office, and machine learning DNA

After surviving the storm of 2009, the team was sharp and motivated, with a lot of newcomers, and ready for new challenges. Since then, the MDCS has been hiring by seeking out the best talent, primarily in top Serbian computer science / engineering universities, with a strong internship program for students and graduates. This provided the foundation for further growth.

Throughout the years, they managed to pull off some truly impressive projects. As Milan Novaković remembers, one of the most important moments for him happened during his time in the SQL team when he realized just how important their work was for the entire business. MDCS was in its fifth year when they came to this breaking moment.

When we realized that we were working on one-third of the SQL server engine, one-third of this multibillion-dollar/year business, it was a point where we figured we’re no longer just getting small and extremely difficult parts of certain projects, but that this whole business wouldn’t work the same way without us. It was a key moment for me.

SQL team was formed back in 2007 and has remained an extremely important part of MDCS throughout the years, with its size and importance within Microsoft only getting bigger. Dražen Šumić, who now leads a team of programme managers who define new features for SQL Server and Azure SQL Database, looked back on their role in the version of the server that was released in 2016.

SQL server 2016 was one of the biggest releases of SQL Server so far, where we did three out of top five new features. We did a great job, the features were done well in terms of code quality and performance, and also in terms of hitting the sweet spot of customer usability.

The team in Belgrade earned itself a reputation of a machine learning center, even before machine learning was really a thing. In the first years, it was related to understanding math formulas and handwriting while today it expands into cutting-edge areas such as mixed reality and computer vision.

Machine learning was a part of MDCS from the very beginning, but it has become hot in the meantime. And in a way, that wasn’t so much an internal moment [when ML became hot] as it was external validation of something that was already natural to us and that we have been  doing for 10 years before the rest of the industry. Not much has changed in our team, we just continued doing what we had already been doing, because we have ML projects on the hardware level, in Office, maps, databases etc. It’s a part of our DNA, so in a way, we haven’t changed, but the world has become more like us.

We literally coined the term “intelligent database”. Databases used to be something you don’t touch, not ever, and we made an intelligent database that’s improving itself. You’re using it and it’s learning how you are using it and it changes itself accordingly. We invented it and I’m really proud it became a trend in the industry and our competition is doing the same thing now.

Milan Novaković

The Office team, that became a part of the MDCS in 2010, was the main protagonist behind another important milestone, and that’s PDF Reflow. It’s basically a feature that enables the conversion of PDF documents to editable and reusable form and that was developed entirely in Belgrade. It was also one of the most requested and most popular features among Word users. Aljoša Obuljen, one of the engineers who worked on PDF Reflow and who now leads the Computer Vision/Human Understanding team remembers their early work on document analysis.

That was the first of many projects I worked on.  We analyzed documents and tried to understand what was inside so that we could decompose and put them back together in another format. We began with converting it back to Word so that you can edit it again.

That was one pretty large niche my team was working on – analyzing documents, making them semantically mobile between different formats, devices, and concepts, and I must say, a lot of engineering work went there. It started as a team of 10 people that grew to 35, that were working on it for eight years. We worked as hard as it gets in our industry but also learned faster than we could anticipate.

The first fully owned product

The Belgrade team started as a bunch of very talented and motivated engineers, who were “called in” when there was a really difficult problem to solve. But as the years went by, the projects were getting more complex, not only in a technical sense but also in the scope of skills and expertise they required. The center moved steadily towards being more and more independent and more involved in all parts of the business, not just the tech stuff. It culminated with the first product that they drove from beginning to the end – Managed Instance, an important upgrade to Azure SQL Database service that became a business on its own.

Managed Instance is a new deployment option in Azure SQL Database that streamlines the migration of SQL Server workloads to managed cloud, and combines the best of SQL Server with all the benefits of a fully managed database service.”

In the words of Dražen Šumić, this was the project that really made them a team that could drive a complete product, end to end. At that point, they had already been working on Azure for a few years, with the SQL Database service, the largest data service in Azure, as the most important part that they contributed to.

When the Managed Instance opportunity came along, we were the first team [in Microsoft worldwide] that said, “We think we can do this”. It was risky and technically difficult to figure out, but of course, you can either try to analyze it for a year and end up with someone else doing it, or you could analyze it a little shorter, have a little more self-belief, sign up, and start working on it. This willingness to risk, faith in our knowledge and a good engineering core put us in front of some other teams that could do it instead of us.

This was the first product where they had a chance to test and implement different customer journeys, do lots of customer development interviews, and own the entire product development cycle. Managed Instance has become a standalone business that the whole company is betting on, and which aspires to become a billion-dollar business in the next several years.

Confidence as the most important achievement

Only fragments of some of the projects that the team is working on at the moment are known to the public, but from all they can share, it seems that even more cutting-edge stuff will emerge from the MDCS.

The team that is led by Aljoša Obuljen is engaged in some of the most complex and important parts of Microsoft’s Mixed Reality offering. They continue to explore hardware, image processing, and computer vision in this field. The SQL team is working on an upgrade of another large Azure service, which is not yet public. The MDCS is also doing some state of the art stuff in the field of maps, which is in line with Microsoft’s rediscovered devotion to the open source.

But for the team behind the MDCS, their most valuable achievement lies in the level of confidence that Microsoft headquarters in Redmond has in them.

We see the confirmation of our value exactly in this relationship that our executive directors have towards this development center. They have invested their confidence in us, and these projects that we did in the past two-three years have justified their bets.

When we did those top features for SQL server, that was an entry ticket for the next set of things and into the Cloud, which resulted in us doing a product that’s a part of the largest Azure service. It will drive the business in the next five to six years.

Dražen Šumić

Aljoša Obuljen perfectly summed up their evolving path, from humble beginnings to strategic independence and importance.

It takes a lot for one team to be built, to grow, and to “grow up”, and the result of that is not seen in the complexity of projects but in the confidence that the rest of Microsoft has that we can take care of those projects.. It began with “here’s a problem, find a solution, and we’ll see what we’ll do with it”, then it slowly moved to “what would you do here next” and finally to: “we see this is an important field, try to make sense of it, and see what we can ship to the market”.

The most important evolving path we’re on is about our ever-increasing responsibility for strategic decisions. I can’t say that we’ve come to the end of that road, but we’ve certainly come far. Of course, the complexity of the projects grew as we got bigger, but what grew the most is the level of confidence that we inspired in partnerships with the rest of the company.

Aljoša Obuljen

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