If you used 'Browser Plus' or the photo-sharing app 'Bubblegum', two of our favorites around here, then you've used programs developed by Microsoft employees on their spare time. In this case, 'Browser Plus' was written by Sriram Krishnan and 'Bubblegum' was written by Sriram and his wife Aarthi Ramamurthy, on their honeymoon. (Aarthi recently announed her departure from the company).
But what makes that dynamic so unique is that these engineers (and over 3,000 others) were able to write these apps in their spare-time and profit from their work. That's different because usually software engineers are encouraged not to work in their spare time, since their ideas and creative energy get company priority. In other words, this was a big shift for Microsoft who went from discouragement to literally throwing pizza parties and openly promoting their employees work.
The change is due to the effort of many on the WP7 team who pushed for allowing employees to work in their spare time and to make money from it. Now we're starting to see the results from the reversal and truth be told their seems to be a re-invigoration behind the company and its employees, something that Google learned awhile ago (they still allow 20% of their employees' paid time to be devoted to personal projects). To that end, we say to everyone at Microsoft, keep up the good work.