Not a cloud in the cobalt blue sky. An iridescent sea, punctuated with occasional whitecaps. A warm, gentle breeze. Best of all: all expenses paid.

For the 2,000-plus employees of the Vienna, Va., software and Internet company MicroStrategy, a weeklong Caribbean cruise in January was their reward for a year of hard work. But while the voyage, an annual event, might have appeared to be a vacation, it was also an important opportunity for the company to share its strategies for the coming year.

"It's not all about having fun in the sun," says Bruce Shuttleworth, director of marketing operations at MicroStrategy. "It's a working function, hopefully an enjoyable one, where we have a captive audience to discuss strategic directions, our brand, the competition, and other issues." It's also about helping to forge a distinctive identity, spicing up MicroStrategy's image, and building morale and teamwork among the mostly young employees. And it's about recruiting and retaining the best people in an ultra-competitive marketplace.

All that is vital MicroStrategy, which, with 1999 revenues of $151 million, is in the thick of the technology race.

Come Work For Us Alison Andrews, vice president of global education services, remembers the first MicroStrategy cruise she took six years ago. Unlike today, the company didn't advertise that bennie to recruits like Andrews, who was hired fresh out of Dartmouth College, where she majored in engineering sciences. When she discovered MicroStrategy invited all full-time employees on a cruise, she considered it a "pretty cool opportunity."

While the company doesn't wine and dine prospective employees on the cruise, Shuttleworth believes the event helps to win over some recruits. "Many graduating students from top universities, where we primarily recruit from, receive great offers," says Alka Nayyar, public relations associate. "When they look at the strategy behind events like the cruise, and our commitment to continuing education, those differentiating factors play a part in their decision-making."

Of course, it hasn't hurt in recruiting--or retaining--employees that MicroStrategy was recently included in Fortune's "100 Best Places to Work" and has been recognized by Arthur Anderson for excellence in retaining and motivating employees. Its retention rate of 90 percent is significantly higher than that of other software and Internet companies, says Ivy Eckerman, public relations analyst.

The first cruise was launched in 1994; before that, an all-company gathering was held at various resorts, most recently in Orlando, Fla., with a visit to Walt Disney World. From a logistical standpoint, a cruise offered more benefits than a land-based event: It was easier to stay on schedule because they weren't transporting people, there were no lodging and dining problems to worry about, and ship officials can accommodate reasonable changes in the itinerary.

Add the fact that Michael Saylor, MicroStrategy's brash 35-year-old multibillionaire CEO, enjoys doing things differently--often in a splashy, image-enhancing way. The idea of flying all full-time employees to Florida to board a cruise struck him as an intriguing novelty that would help to differentiate MicroStrategy from software and dot-com competitors.

"Our company revels in doing things differently, creatively, and, often, to extremes," says Eckerman. "We're a young company, and we don't stick to the typical rules."

Each year, as the company has grown, so have the number of employees attending the annual cruise. This year, for the first time, Micro-Strategy rented an entire ship, Celebrity Cruises' Century.

Working Vacation It's no surprise that the cruise is all about work, considering the company's workaholic nature. Significant others are not invited. "It's a business trip and a business expense," says Shuttleworth. "If other people were involved, that would become too distracting."

Saylor and other top officials view the cruise as an opportunity to communicate corporate strategies to a captive employee audience. Managers follow up by leading breakout sessions, which often involve tactical discussions aimed at carrying out the strategies. Further communication occurs randomly as employees mingle.

"It's a fantastic way of cutting across departments," says Shuttleworth. "For example, a guy in marketing might find himself sitting next to a guy who puts in code. There are many areas the company is involved in, and when you're together for a week, you will learn an awful lot about what you didn't know you didn't know."

Saylor, an inspiring speaker, sets the tone with a rousing speech on the first day at sea. On the January cruise, the company also pumped up morale and pride by showing employees a preview of the three $2.5 million MicroStrategy ads that debuted during the Super Bowl. Activities such as a talent show and beach Olympics are also designed to build teamwork. There's also built-in time for side trips on the islands and for seaside pina coladas.

"You learn more about your co-workers when you see them in another setting," says Shuttleworth. "It creates respect for them. It's easier to go to work earlier and leave later if you're working with people you enjoy."

Is It Worth It? Shuttleworth is convinced that the cruise helps to improve quality and productivity, but he acknowledges that proving that is impossible. And the $3.5 million estimated cost for the most recent cruise is nothing to sneeze at.

There's also the consideration that while the cruise may boost MicroStrategy's image among the general public, some customers may view it as an unnecessary extravagance they don't want to subsidize through increased prices. Moreso since the company--and its stock--is still recovering from a rash of negative publicity it received from a recent restatement of earnings.

Finally, the cruise is partly intended to re-infuse MicroStrategy with a small-company, entrepreneurial spirit, but its burgeoning growth (it doubled its employee base from 1,000 in early 1999 to 2,000 this spring) makes that increasingly difficult.

Acknowledges Andrews: "It can take more of an effort to strike up as many relationships as you did (in earlier cruises) because the company is that much larger."

Despite these challenges, MicroStrategy officials have no plans to downsize the event. In fact, they're planning on renting what is being billed as the biggest cruise ship in the world next year, the Voyage of the Seas, a 1,020-foot ship capable of hosting more than 3,000 passengers.

"Ideally, we'll be able to go on these cruises forever," says Eckerman. "It has become an important part of our culture."