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A modern-day Gerstner is needed to cure all of Microsoft’s ills

Time for Ballmer to move on...

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By going with HD DVD, Microsoft took an emotional anti-Sony decision. And by bundling the Blu-ray player in the PS3 Sony has managed to rapidly overtake the Toshiba based HD DVD format and very soon Microsoft could be forced into an unpalatable climb down by allowing OEM version of the Blu-ray drives into the Xbox 360, in fact we’d say that this is pretty inevitable within a year.

So a market leading gaming console position is perhaps not to be envied quite so much, and perhaps the only consolation is just how badly Sony managed the entire PS3 launch. But it’s doing better now, and that spells even more bad news for Xbox. Actually the Xbox has a shining light in that the Xbox Live network, although under pressure from Sony now, is an outright success and this is perhaps the only area where Microsoft has learned (from iTunes) how to move into services.

Until recently Microsoft had been growing market share in mobile handsets, but it still has virtually no chance to move towards dominance from a purely software defined architecture. It is here that the lesson about an operating system not being a platform needs to be best absorbed.

Java is a platform. MobiTV is a platform, DVB-H and MediaFLO are platforms, Brew and Series 60 are platforms, but none of them are operating systems, none of them offer the Windows look and feel and they can all sit on virtually ANY handset, be it Windows Mobile, Symbian, Linux or a proprietary chipset BIOS.

Linux is picking up speed as a consumer electronics operating system and particularly on the handset. Motorola could have fully embraced Microsoft, instead it has pushed Linux on handsets. Palm could have doubled the Windows Mobile reach, instead it will now revert back, in part at least, to Linux.

Similarly on the Ultra Mobile PC Intel could have solely embraced some form of Windows, but instead it has just decided to use Linux as well and hedge its bets. This amounts to a major split with its original partner and one which could leak back into the enterprise and PC domains, and begin to erode Microsoft’s appearance of an unassailable lead.

In fact Intel here seems to have more in common with Nokia than with IBM (see elsewhere in this issue) and the convergence of devices from the PC down to the handset and from the handset up to the palm sized and tablet PCs, will push Linux more and more and make it more acceptable in the enterprise.

Following the leader

The advertising obsession of Microsoft, due to the need it has to cover every move that Google makes, is sending mixed messages to the world. IBM, during its recovery stopped trying to be Microsoft, and in the same way Microsoft has to stop trying to be Google and find its own new paradigm.

In the world of networks Microsoft is also trying to invade the operator’s turf by using Connected Services Framework, sitting it between .Net applications and IMS. This could lead to millions of services across the world’s networks, in many cases doing the jobs that Cisco’s product line used to do. But it could equally lead to an all out war between Cisco and Microsoft in networking, and that will be both distracting and unprofitable.

We could go on. The abject and predictable failure of Zune, setbacks in the browser wars with Opera, Safari and Firefox on the PC, and on handsets, all making Internet Explorer less and less a household name, the failure to penetrate handsets with a decent downloadable DRM, the failure to lure advertising network DoubleClick into a merger (it went to Google), and the countless lawsuits, are all symptoms that Microsoft management isn’t losing its way, it has lost it sometime ago.

Microsoft needs leadership that can innovate, not bully and it can go one of two ways. It can find itself a new visionary, like Gates himself, or it can opt for someone who’s skills are corporate management and accounting based, as Gerstner’s were.

The one thing it cannot continue to do is let itself be run by marketing and continue to repeat the bundling tricks of previous technology generations.

Ballmer needs to call it a day, preferable graciously, and in his place someone is needed who can change Microsoft’s reputation from a playground bully to a company that can be sensibly invited onto the handset, and onto IPTV set tops and onto Linux and Apple platforms, with its own next generation of platforms, none of which are operating systems.

Copyright © 2007, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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