A lot is being said about Microsoft’s lack of focus recently. John C. Dvorak claims that Microsoft suffers from “CADD: Corporate Attention Deficit Disorder” (Marketwatch.com, July 27, 2009). I have to agree wholeheartedly, yet I agree it’s more than that.
It seems to me that somewhere around Windows 3.1, Microsoft became star-struck. They were the darling of Wall Street, with stock and earnings rising and rising on an amazing growth trajectory. Suddenly, Microsoft’s operating system was touting as amazingly advanced and changing the business desktop, as Apple Macintosh fans snickered with their fancy graphical user interfaces.
With great fanfare, Microsoft launched Windows95, hired The Rolling Stones and received unbelievable press coverage. The pundits exclaimed Windows95 to be a huge breakthrough, while journalists wrote in nauseam, “just like a Mac.” Microsoft’s trajectory climbed at even a higher pace. Large corporate campuses in Redmond and Silicon Valley were added to house all the people needed to handle growth. Geeks became cool and they felt like they were like rock stars.
And the company grew and grew…
Bill Gates was a shrewd negotiator, even at 19 years old. His game was poker and he used his brilliance to adapt the ideals of poker to the bargaining table. This is why Microsoft landed that first huge deal with IBM. Microsoft had dogged determination to be the operating system of choice for the fledging computer industry. There was a real spirit at Microsoft–that of a forward thinking, dynamic company. In 1984, when the Macintosh was introduced, they got right behind it. Macs were on many desktops within Microsoft and they wrote some really great software. Microsoft Excel was first introduced on Mac, while Word really gained major acceptance on Mac. Macs were cool and Bill was enamored.
Windows95 launched and became wildly successful. Revenues and earnings shot through the roof, Bill became the richest man in the world and Microsoft gained a war chest of cash like no other. Microsoft, with it’s college-campus-like atmosphere and heretofore witnessed employee perks, was fat and happy.
The Internet flashed onto the scene and Netscape suddenly appeared. While Microsoft yawned, Netscape files for one of the most successful IPOs in history. Netscape made a Web browser, yet had no real business model, but it’s really a cool company. People bank on Netscape’s unknown future, just like they did with Microsoft, albeit more risky.
Asleep at the wheel, the noise about Netscape and other fledgling Internet companies began to wake the sleeping giant. Microsoft threw together Internet Explorer, which became the standard on Windows98. Not long after that, Microsoft decided it should own the internet and began to develop services and languages to run its way, instead of using open standards.
Fast forward to today. Open standards are just that, “standard.” Microsoft’s arrogance has finally met its match with a community resistance that has rejected their imperious attempts.
This and their still not cool.
This quick background story is a true example of Microsoft history, which could be framed in a variety of situations in the company’s history. Over and over, Microsoft jumps into whatever is trendy; after all, it has billions of dollars in the bank, why not hedge bets? Online services, online media, search engines (galore), games, toys, publishing, music players, online music and more. Sony is cool and built a revolutionary game console, so Microsoft jumps into the fray, losing money on each device it ships. Apple changes the world with iPod, perhaps the coolest device to ever be introduced, so Microsoft counters with Zune, albeit years later. Apple’s iTunes Store takes the world by storm. iTunes does little for Apple’s profits, but sells iPods. Microsoft, who already spent millions promoting its Windows Media DRM “Plays for Sure” system, decides to come up with the Zune Store, entirely incompatible with the “Plays for Sure” standard it conned its vendors into the year before.
So think about this: name 5 products that Microsoft currently markets. What did you come up with? Let’s take a guess: 1) Office (Word, Excel, Powerpoint), 2) Windows, 3) XBox, 4) Internet Exploer, 5) Bing. Right? If you think of any others, leave it in the comments. The only reason Bing is on the list is probably because you’ve been hit with its $30-million ad campaign. Of the five answers above, or the five answers you arrived at, how much money is spent marking the first 3 on your list? Probably very little compared to the stuff not on your list, sans #5’s $30-million dollar campaign currently in effect.
Shouldn’t Microsoft be spending more money on its next generation products that enrich its core businesses?
Microsoft is a company that’s truly lost its way. However, unlike Sony, which was cool and not only lost its way, but lost its mojo, Microsoft keeps grasping for the cool and trendy, but never really had the mojo to begin with. Microsoft is akin to a celebrity who had their place in the spotlight, continues to act like a snobby celebrity, while desperately grasping for attention. Fiona Apple comes to mind as a prime example, no pun intended.
Even the culture at Microsoft’s campuses reflect this, especially Redmond. Employees there are possibly the most snobbish, arrogant people on the planet. If you need proof, dine with some of them at a local restaurant sometime or interview a local restaurant worker. Most of them feel like they are the cats meow and look down upon those who use iPods, even within their own circles.
The solution for Microsoft is simple, really. The company needs to start shedding programs and divisions that do not work, stop trying to chase after companies like Google and Apple and come up with a cohesive global plan for software and services that are interoperable–with both open standards and its own. Microsoft needs a strong leader with less competitive ego for wanting to beat everyone else at their own game and focus on Microsoft’s game. Steve Ballmer is not that guy. He’s a sales guy, a cheerleader and staunchly competitive. Unfortunately, his focus is not clear and either is the company’s. Their plans are fragmented little businesses that don’t even communicate with each other. Sort of like Sony.
Sony builds computers and is competitive in the space. Sony also has a software division that sells a video editing title called Vegas. This group has been seen at various trade shows demonstrating their software on Dell computers. That would be like the head of Ford showing up to a NASCAR race driving a Toyota. Unreal.
Microsoft is heading down the path to be the next Sony, but cannot fall back on its cool factor as Sony has ridden so long upon. While Microsoft keeps its vendetta against Apple going, other focused companies are truly innovating in their respective space–like Oracle and IBM. Microsoft continues to spend millions on a marketing campaign that may help Dell, Sony and HP sell more laptops, yet does little for Microsoft’s image, all while validating Apple as a cooler, premium brand. Why is Microsoft so focused on battling Apple publicly? What are they afraid of? Apple has less than 10% of the operating system installed base world-wide, so why fight them?
Perhaps there’s more to this picture, but the author feels this is all about ego. As if to say, “damn you, Apple, how dare you make fun of us!” and combat that with a multimillion ad campaign. All the while, Apple has dominated the music player industry and is quickly gaining on the smart-phone business, the latter of which Microsoft was a one-time market leader. Blackberry took this market over, yet strangely it wasn’t until Apple got involved that Microsoft started to fight for market share.
As long as Ballmer is at the top, his ego and Microsoft’s CADD will persist. Perhaps the shareholders should wake up, realize Microsoft is not cool and force change upon the company’s management before it’s too late. When Windows, which has already lost its luster, and Office become less and less relevant, so will Microsoft itself and that’s really not cool.