Agile development methodologies have been gaining acceptance in the mainstream software development community. While there are numerous studies of agile development in academic and educational settings, there has been little detailed reporting of the usage, penetration and success of agile methodologies in traditional, professional software development organizations. We report on the results of an empirical study conducted at Microsoft to learn about agile development and its perception by people in development, testing, and management. We found that one-third of the study respondents use agile methodologies to varying degrees, and most view it favorably due to improved communication between team members, quick releases and the increased flexibility of agile designs. The scrum variant of agile methodologies is by far the most popular at Microsoft. Our findings also indicate that developers are most worried about scaling agile to larger projects (greater than twenty members), attending too many meetings and the coordinating agile and non-agile teams.