Inside Microsoft's innovation crisis
Ideas not a problem
The debate on how Microsoft is losing its innovative edge is as perennial and comfortable as how the summers were warmer and drier when you were growing up.
Windows not only seemed dull, but over the last decade, Microsoft either ignored its rise or made things harder for itself thanks to some stunningly arrogant management decisions that had huge ramifications - such as the decision not to build any new standalone versions of Internet Explorer.
It couldn't be more different to the 1980s and 1990s when Windows unified the PC ecosystem and Microsoft rolled out tools and initiatives that won developers.
The discussion is on again, thanks to Wednesday's op-ed in the New York Times by former vice president Dick Brass, who'd labored on the still-born Bill Gates' dream of tablet computing. Gates predicted in 2001 that the tablet would become the most popular form of PC within five years. Microsoft's tablet launched in 2002, and by 2005, the tablet was nowhere but niche.
Brass slammed Microsoft's dysfunctional corporate culture for stifling innovation. His writing juxtaposes Microsoft's fumbling with Apple's Jesus-like entry into tablets last week with the iPad. Apple or, more precisely, Stalinist chief executive Steve Jobs has a track-record of picking up and refining existing ideas in things like music players and smart phones and turning them into must-have items. Can he do the same with the tablet?
Such was the blow to Microsoft's pride delivered by Brass through the pages of the NYT that its head of PR felt obliged to issue a rebuttal.
Contrary to what those trading in accepted wisdom might think, Microsoft is not down and out when it comes to coming up with new ideas. Microsoft has an industry busting RD budget of $9bn, it's rolling out a new cloud architecture based on a new computing fabric, it's noodling about with a managed code operating system with Midori and a browser-cum operating system concept called Gazelle. Early signs are that the billions Microsoft is pouring into Bing have produced a clean search experience that - as with most things Microsoft - is clearly targeted as business partners.
Other ideas have emerged without Microsoft really knowing what it was on to: Silverlight was just a subset of Windows Presentation Foundation, Microsoft's new graphics layer, but it has quickly eclipsed WPF in terms of its interest among developers and become the company's challenger to Flash. There are even questions about just how many features Silverlight will get and how far Microsoft will take it on the desktop.
The real question when it comes to Microsoft is how it turns these new ideas into success stories, fiscally and in terms of developer support and numbers of partners and customers. Certainly in the past, Microsoft's work has produced results from building and refining a server operating system to putting Windows on handhelds, integrating a set of productivity applications to create a single Office suite to building a games console.
In the past, and even with some of the new ideas like Bing and Azure and a hosted version of Office, it's been a case of Microsoft following others. One of its strengths, like Apple, has been in taking an existing idea and making it work better as it did on Windows and Office in the 1980s and 1990s. Not so much innovating the new, as innovating the existing.
Next page: The size challenge
In these decades of micros~1 hegemony
I have never seen micros~1 come up with something truly new or earth-shattering. Once they had an unfairly large share of the market (by buying a rip-off of someone else's work, no less), they just redid and redid and redid. Vapourware to take on already working products already in the market, and worse. All they do is add their special mediocrity sauce and everybody who doesn't know better instantly likes it. In a very real sense they have created their own customer and are much better at marketing than at coding.
Even now, with that 9bn "research" budget, they only managed to come up with "micros~1 surface" (another arrogantly overly broad name) after several others did, including some no-budget tinkerers with a projector, a videocam and a laptop in a basement in Berlin.
The success of windows and office is not from how well they work; they're atrocious. It's from network effect through deployments throughout the fortune 500. No wonder that the internal "halt the presses! security problem!" committee can do exactly nothing without an official complaint from a fortune 500 company. This also tells me that there are a lot of entirely pointless jobs within those molochs. Apparently , people losing time rebooting windows and losing work to office leaves them with less time to wage office wars on each other. See there the success of micros~1.
The evidence tells me that their business model is destruction and co-opting of other people's ideas, anything as long as they can squeeze some blood out of it, but that overall they've been stiffling innovation and invention and were quite comfortable with it right until linux' momentum proved unstoppable with a few buy-outs and some vacuous threats by proxy.
Ever read dear billy boy's books? I couldn't. The back cover was already more tripe than I could stand. That's the essence of micros~1, right there. With their mediocre user base driven by mediocre eye candy ogling management, their mediocre products, they are a natural monopoly creating their very own ecosystem: survival of the mediocrest.
"You could spend your whole life trying to change the world"
That was the slogan on Microsoft's recruitment adverts, back in the late 1990s...
Trouble is, what if you've already succeeded? What if you originally set out with a bold vision to put a computer into every home, and get software to be something people bought, the way they bought home appliances... and then, 15 years later, you've done it: there actually IS a computer in every home, and every high street has a dozen stores, selling computers with your software on them?
At the end of the 90s, that's very much where Microsoft was sitting. They'd changed the world, and they'd done it in exactly they way they'd planned.
So what do you do? Well, sadly, if the new world you have made for your self, is actually extraordinarily kind to you, then there's a strong incentive (however much your rational mind might fight against it) to spend your remaining energies trying to stop the world from changing any further. If the only thing you have to bank on, is that computers will continue getting faster and faster, so that people will want to do more and more with them, then your assumption is going to be that only way they can achieve that, is to keep buying more and more software for them. Great. You're a software company.
In fact, the business model was sound, if you followed its assumptions. The computer would occupy the centre of the home, like a pet mainframe. People would buy lots and lots of software for it, that they consumed on lightweight client devices around the house (it's classic client-server stuff that anyone at Honeywell or DEC would have recognised). This was the original role of the Microsoft slate form factor.
In this view of things, then the next big war would be fought between the sellers of encyclopedias, electronic reference works, and home media - and Microsoft was all geared up for that fight. They had sunk tens of billions into Encarta - and it's successor, Sendak - in readiness. They were going to do to Encyclopedia Britannica - and all the rest - what they had done to all their other competitors before them.
And that was the problem: the assumption. The network was supposed to go in that direction - outwards from the Home Computer - which acted as a library of all the information you could want - into the Home Appliances, which acted as its clients, and where the tight integration of Microsoft's office suite, with Microsoft's reference libraries and media, would make the combination of the one, with the other, a no-brainer.
But the traffic suddenly started coming in the other way: inwards, from this weird Wild West of a place, outside, full of RPC worms, ripped-off stuff, and free things. So unprepared for this world, were they, that they shipped a prettified version of their server operating system, with all services enabled, and no firewall, straight into a marketplace where all their customers were getting their first home broadband connection: welcome to the internet, allow me to introduce myself, my name is Blaster.
This is what Microsoft's management don't seem to grasp: they could have enabled the firewall and shipped the software with all non-essential services enabled, but they couldn't have stopped the influx:. They are never going to reverse the flow of traffic. So much innovation at Microsoft is wasted in trying to get the flow of traffic going back outwards from the PC. It is never going to happen.
The picture Fred Moody paints of what was starting to go wrong at Microsoft - even back in the early 90s, in his book about the Sendak project "I sing the Body Electronic" - still resonates with what remains wrong within the Campus, today. There are still young people who want to spend their entire lives trying to change the world - but its been more than two decades since any of them saw Microsoft as the place to do it.
"One [Microsoft's] strengths...has been in taking an existing idea and making it work better"
But they *don't* make them work better. Microsoft produces mediochre clones of other peoples' innovation and uses its market dominance to force them into place. Was Office "better" than PerfectOffice? No, not really, but by secretly tying Office into Windows in a way no-one else could, they forced competitors out of the picture. That, despite, Bill Gates' never-ending proclamations, is not innovation.