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Microsoft – just another software company

Part 1 – To survive, Microsoft must commit suicide

I’ve been seeing this coming for a while. When I first  had the outline of this series, Steve Balmer was still CEO, and I was going to write this as an open letter to him. This was just after some of the bad news about Microsoft stock had hit, and frankly, I was going to leverage that into (hopefully) a nice blog series. But  maybe the next CEO will get my message. And my message is so straight forward that even an Ivy League MBA CEO can understand it.

As anyone who looks at my bio can tell, I date back a ways. This is why I make such a good Independent Technology Consultant. I date back to when Digital Research wouldn’t sell IBM CP/M, but Bill Gates would sell them QDOS with a few frills of his own. Admittedly, it was a shrewd and gutsy move on Mr. Gates’ part. But the important piece to know is that Mr. Gates (can I call you Bill?) and I stomped a lot of the same primordial microprocessor mud. I think if I dig, I’ll even find an old copy of BYTE Magazine that still shows Wayne Green (who I HAVE met) as the publisher, not to mention the stacks of [Steve] Ciercia’s Circuit Cellar that I finally recycled. Not to mention all the coffee cups of companies that no longer exist. One of the perks of a history of complex network consulting I guess.

[Side note to Steve Wozniack: Woz, did you ever wonder where and what would have happened if you had continued with the 6800 on the Apple1 instead of the 6502? My curiosity really ties back to the whole Lisa development since it was 6809 based – BTW, I have some MC68B09’s in a tray over here….]

So back on topic about Microsoft –

Microsoft, along with a few other technology companies born from the original Silicon Valley/Redmond boom, has the problem of largess, and to a certain extent, a belief that they can, and want to own a technology segment, and that they DESERVE to own that segment.

And to a large extent, they have owned the desktop, server and some key application environments for quite some time. The problem is that after a time, companies that are leaders begin to believe their own marketing hype.  Not that they are not innovative, although they usually end up doing more innovation through acquisition than via true ground-breaking deep thought.

But now they are in trouble: Their forays into mobile devices have failed miserably in comparison to their competitors. Their sales of server software have been consistently challenged by the various (free) Linux variants. The strong adoption of HTML5 and JavaScript has allowed both desktop-based and desktop/server applications like SharePoint, CRM, and SQL Server to become high-value targets for enterprise developers.

This competition has been affecting their stock price, some of their development, and frankly, the strong adoption of cloud computing (see my series on the cloud starting here) – this from the company that still owns both the desktop and office suite environments. Their foray into cloud computing is an obvious follow-the-leader/600 lb. Gorilla move to try to thwart additional loss of market share and leadership to Google.

So how does Microsoft regain leadership or even in a way, continue to survive? Unfortunately, in their current form, my opinion is that they won’t.  To survive, and honestly to survive the next 20 years, they have to make the hard decision to abandon the “Everything Microsoft” ideal. To do this, they will need to break up Microsoft along some key industry and market lines. I’ve come up with 3, and possibly 4 new companies and segments that will allow Microsoft to regain much of its innovation and market leadership.

Over the next two posts I will explain how and why Microsoft needs to destroy itself in order to survive. While I’ve never been accused of being clairvoyant, I do have a unique perspective, and I end up being right more often than not. Being an independent technology consultant means doing a lot of educated guessing – I guess. Check back in a couple of weeks for Part 2!

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