The New Microsoft

The departures at Microsoft have hit a point where local journalists are starting to produce lists.  Nick Eaton at the PI has this great list with dozens of links, and Sharon Pian Chan at the Times has another one here.  Whether or not there is a wizard behind the curtain with some kind of a grand plan, change is on its way.  This kind of turnover guarantees that a new Microsoft is being formed.  A company with 90,000 employees will never be a blank canvas, but new ideas must be working their way into places that have not seen new ideas for a while.

Into this mix we add Paul Allen with his memoir out this week and a less than flattering account of early scheming by Bill Gates.  This will keep Microsoft in the news for a while and start a whole new avalanche of What Microsoft Should Do articles.  This does not take much prodding however.  People have been telling Microsoft what to do for so long that advice sounds like the din of the cars going by on HWY 520.  People suggest that they bring back Bill Gates, fire Ballmer, and ask if Microsoft is still relevant so often that if you want to make a suggestion, just get in line.

In an attempt to avoid adding to the cast of advice noisemakers, I am going to make a prediction or three about Microsoft’s future.  Sure you could say that these predictions are thinly veiled suggestions – after all, the answers on Jeopardy are really the questions.  Either way here are three thoughts.

The Enterprise

Some think this is the name of the ship on Star Trek, but that would be the “Starship Enterprise”.  Others may think of the first nuclear powered aircraft carrier, but that would be the “USS Enterprise”.  Those of us in technology marketing think of the Enterprise as bigger businesses who still control 72% of all technology spending.  A very large part of that spending still goes to Microsoft.  Microsoft knows the Enterprise and even without much innovation - it will take decades to blow that lead.  They cannot coast forever, but I think it is a lot like the USS Enterprise which has to refuel its reactors every 20 years.

Partners

Most of Microsoft’s success in the Enterprise is a result of its ability to sell through channel partners.  No one has the partner reach that Microsoft has with its over 600,000 channel partners.  These companies, ranging from big consultancies like Accenture to Joe’s Computers next door, make their living selling Microsoft’s products and the services required to keep them going.  Salesforce.com has been spending 50% of its revenue for ten years trying to make a dent in Microsoft’s dominance in this area.  Admittedly Salesforce.com’s $1 billion in revenue is a dent.  But as soon as Salesforce.com stops spending over $700 million in sales and marketing every year – then what?

Security

Microsoft knows more about security than anyone.  Microsoft has legions of very smart people evaluating and responding to attacks on Windows and releasing patches every week.  Right now consumers willingly trade their privacy for “free” services.  Consumers don’t care if Google reads their emails and Facebook analyzes their relationships because there has not been security Pearl Harbor yet.  It is coming and when it does, consumers may reconsider.  The galvanizing event does not have to be a municipal power grid take over by terrorists.  It could easily be convictions for treason based on private emails and Facebook updates that consumers thought they deleted, but lived on in the cloud and were accessed by law enforcement and a Committee Against Un-American Activities.  Sound crazy? What about kidnappers, bounty hunters, stalkers, or even paparazzi accessing mobile carrier databases and hunting people by electronic data trail?

Change is on its way at Microsoft and I think many people are going to be surprised.

Bill Says Steve has Taste, and Steve Says Bill can Partner

In my quest to figure out what is happening in the computer business I have been thinking a good deal about how we got here.  In two separate conversations in less than a week friends have pointed me back to the 2007 All Things Digital conference where Walt Mossberg of the Wall Street Journal interviewed Steve Jobs and Bill Gates together.  The whole thing is available on YouTube here.  There are many fine moments, but if you want to cut to the best one, go to 3:30 of part 11.  Where an audience member has just asked what they had learned from each other and Bill Gates says:  "Oh I would give a lot to have Steve's taste."  He then goes on to eloquently summarize the magic of Steve Jobs all in a couple of sentences.  

The focus moves to Steve and he talks about Microsoft's skill at partnering: "Bill and Microsoft were really good at it." and Steve further explains how Apple didn't need to think that way because they were building the "whole banana" and Microsoft needed to be good at it because they needed partners to succeed.  This could not be more true today.  While a fair amount has transpired in the three years since this interview was taped, the basic facts are as the two founders said on that day:  Apple has taste and Microsoft knows how to partner.

There has been all kinds of news out of the Microsoft Worldwide Partner conference this week about how Microsoft is going to leverage its partner ecosystem to be the biggest player in the cloud and other areas.  I don't think anyone could have said it better than Bill and Steve did in 2007.

The entire hour is very much worth watching and amazingly revealing about post PC devices, tablets, social media, multiple screens -- all the stuff we are talking about today.  Check it out.

Lessons from IBM

I pointed out the other day that IBM's stock outperformed Google's over the past 4 year period.  There are many things we can learn from the granddaddy of all technology companies.  In its 130 year history, IBM has had more "eras" than most tech companies have had years.  In fact, IBM tangled with the Justice Department before Bill Gates was even born.

The one thing that has always impressed me about IBM is how they seem to be playing on an entirely different level than anyone else.  Real companies count on IBM to give them real solutions to real business problems.  Every time I find myself in a conversation with a senior exec at IBM I am reminded that they have managed to continue to operate at this level regardless of the headlines of the day.  

Somehow I just don't see IBM burning R and D budget on a Twitter clone.

Curiously, IBM also does a great job with its ads.  They come up with fun and memorable ways to make the point that they are serious about business.  Here is my favorite one: which is probably 10 years old now but it still resonates.