Phillips was fascinated by computers and technology from an early age, and spent his spare time during high school building computers. His father expected at least one of his four sons to join the Air Force, and Phillips enrolled at the United States Air Force Academy in Colorado Springs, Colorado and earned a BS in computer science in 1981. When his eyesight did not meet the rigorous standard to be a pilot, he accepted a commission in the Marines. He joined as a Second Lieutenant, rising to the rank of Captain, and was stationed at Camp Lejeune in Jacksonville, North Carolina, where he worked on computer systems.