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.

Kevin Turner has Gloves Off and is Ready to Fight

It was a sharp contrast to Steve Ballmer's presentation when Microsoft COO Kevin Turner took the stage today at the Microsoft Worldwide Partner Conference.  For every implied competitive situation in Ballmer's presentation, KT took direct aim at a competitor, and was not shy about naming names.  It will be interesting to see the press coverage, because he was handing out some juicy quotes.  Try these:

"We (Microsoft) are the undisputed leader in commercial cloud services."

"Sharepoint online is the fastest growing product in the history of Microsoft."

 "The smartphone game is just starting."

"The Go Do is don't let our customers get Googled."

"We don't want some of the customers, we want all of them."

"In a market where we were left for dead." (about search)

"Don't let Customers pay the Apple Tax".

"It looks like iPhone 4 may be their Vista."

He didn't stop there.  Without hesitation he rolled into direct assaults on Linux, VMware, and Oracle.  After Turner's show, Microsoft's 640,000 strong partner army know one thing:  General Turner is itching for a fight and he is willing to engage on not just more than one front, but all of them.  Forget Sun Tzu and wasting time trying to figure out whose enemy's enemy is the friendliest.  Let's get busy shooting.  

As crazy as it seems for a strategy, it could just be the right recipe for Microsoft.  Microsoft's partner army is so large, so deep, and so well developed -- this kind of thing just could work.  Given the press over the past few months and the morale in Redmond, Kevin Turner's energy did seem to be quite welcome.  The Ballmer / Turner 1-2 could be a knock out.

Ballmer Brings Ozzie to D8

I was at a small conference last month where Ray Ozzie spoke and he demonstrated, as he has done many times before, a refreshing grasp of the state of the industry and Microsoft's position within it.  Steve Ballmer did the right thing by bringing Ray to D8.  There has been a great deal of coverage, so instead of adding to the heap, here are some links:

• Ars Technica: This one is probably the best distillation 
• eWeek: A quick summary
• All Things Digital: A rough transcript
• Engadget:  This one contrasts Job's comments about PC = Truck to Ballmer's response

In the end Ballmer seemed on the defensive, and was not able to land an innovative forward thinking idea.  Ray Ozzie had some well crafted thoughts about the industry direction but in the few video clips I saw he seemed to get cut off right before he was going to say something meaningful.  Microsoft still has great deal of work to do.

More Advice for Microsoft

I have been working for a while on a post that would summarize all of the advice people are giving Ballmer and Microsoft.  With the whole market cap thing last week the flood of advice has me so buried I cannot read it all -- let alone comment.  So here are a couple good recent ones you may want to read:

• Fast Company: Argues that the thing to do is bring back Bill Gates.
• Motley Fool: Makes the case that Apple did not pass Microsoft, but rather Microsoft is killing itself.
• Information Week: A pretty good rant about the cloud, the market perception of "Microsoft as rigid, backward-looking, reactive, and afraid to compete" and the whole iPhone ban.
• Blogger Andrew Brust: A good list of things to do -- mostly focussed on the consumer space (again).
• Mini Microsoft: Can't have a list like this without a sweeping post from Mini - Microsoft.

If Microsoft really is in its final death dance -- will the wolves come and start picking at the carcass?  There are so many parts of Microsoft the challenge of listing the assets in prioritized order would be even bigger than tracking all of this advice.  

If I had a few billion to spend, I don't think I would buy any of the consumer stuff.  I think maybe Hyper V or SQL Server could be good. 

Steve and Steve at WWDC 2010?

Barrons reports that Steve Ballmer may be scheduled to make a guest appearance during Steve Job's keynote at the Apple Worldwide Developers Conference on June 7, 2010.  This would be quite a thing, the nature of the announcement is that Microsoft is positioning Visual Studio 2010 as the tool to write native apps for the iPhone and iPad. 

I don't remember the battle for developer mindshare ever having been quite this fierce.  Apple has done a good job over the past few years of turning its developer partners into selling (Go To Market) partners.  If this rumor is true, then Apple will have made a very interesting play to turn Microsoft's development partners into Apple's GTM partners.

I am having a hard time envisioning how this benefits Microsoft.  Sure there will be more VS2010 licenses sold, but VS developers fueling the Apple App Store?  Maybe the carrot of VS built apps easily transferable to become Win Phone 7 Apps is big enough to justify the risk of long term developer partner erosion.  Well, June 7 will definitely be an interesting day.

Maybe Steve B will lift the ban on iPhones on the MS campus!