What is wrong with Microsoft? That's question many wants an answer for. This is one of many possible ones...
I started working in Microsoft 10 years ago. I am one 20,000+ hires who joined Microsoft then. I never became manager or Senior (I guess I didn't drink enough cool-aid), so I am still lowly IC here... Doesn't mean that I do not have opinions. You may have wondered why MSFT stock is lagging behind Apple, Amazon, Google, etc. I wonder, too, and here is my answer.
In short, current leadership does not have a focus. They are spreading us too thin to matter in any of areas. I think only exception is Xbox, where, I think, we executed great and that shows. It is also not coincidence that Xbox was built at Millennium campus, just few miles away from main Microsoft campus - it seems that that team needed to distance itself from remainder of the corporation, to be able to change ways how things are done. It is not accident that most innovative parts of the Xbox division refused to move to Studios campus and elected to stay back at downtown Redmond location. But I digress...
I tend not to fret about MSFT stock price, mainly because I do not hold any... I sell my stock awards approximately 3 months after I receive them. At first, it was out of necessity of paying bills and mortgage, but in that process I learned to take first small spike after September and sell then. I sold my options at $37, and I see all those my friends who believed in Microsoft selling them these days for a pittance... However, stock price is good indicator of something else: How people at Wall Street see Microsoft. What they see, in my opinion, is commodity supplier. Quite good one, but still commodity.
If Microsoft intends to stops its way down to oblivion, it has to change that. We should not sell commodity operating system, we should sell great experience and great ecosystem. Not coincidentally, Apple does exactly that and they are vastly profitable and darling of the Wall Street. They may have 10% market share, but they are extracting the maximum of the consumer surplus there...
I think that it is time for strategic retreat - Microsoft should use next versions of its various operating systems (desktop, phone, Zune, Xbox) to create new ecosystem, compatible in legacy mode with old one, but delivering unique experience, which is sound alternative to Apple sterile-white vision. We may loose market share in the process, but my gut feeling is that we should be able to retain at least 40-50% market. Let IHVs fight for crumbles in the remainder (we should still sell them Win7 licenses).
Imagine that we have provided our vision of the three screens (it is actually four, as I see tablets as separate experience), but on our terms, without relying on partners. Our phone, our laptop, our media center hardware, our tablet. Everything works seamlessly. We have concept of family ID and all devices know which family they belong to -- no this big mess we have with LiveIDs which are per individual. Both my laptops belong to all of us in the family, as well as Xbox, cable box and Zune. Even phones (WP7s, see I am loyal employee) are used by our kids and shared. Imagine that my phone has RFID and my laptop has an RFID and my media center has RFID, and when I set the phone down few feet from laptop, it just appears as an item on the desktop where I can drag'n'drop things back and forth. Imagine that my phone has an media center remote app which works with my TV when in living room, but when I am in the den, it just works with other TV there (it knows which TV is in the same room). That level of experience simply cannot be delivered if you do not control everything, from hardware to software to cloud storage. We are missing control of the first one.
Defenders of current course say that people want choice, and that's where they are utterly wrong. People want things which just work, where most of the choices are done for them by somebody else. They can probably choose between more screen or less screen, but they do not want to compare processors and graphic cards (Even I, who used to put together computers from the scratch, am confused when researching laptops -- modern processors brands/names are so obfuscated that there is nothing to latch as single indicator of performance). We can provide that for them.
Remember when IBM was selling their consumer hardware division and Lenovo bought it? We should have took it, just to obtain hardware engineers and supply chain. We should have bought silicone manufacturers in China and Taiwan, we should have bought LCD/AMOLED screen manufacturers, we should have bought/invested in plastic mold shops. You do not have to buy everything, but enough to be safe from whims of other buyers. It seems that Apple is doing exactly that -- investing billions of dollars in securing supply of retina-displays for next five years. That seems like long term thinking.
Somebody would ask what about Office, business solutions, server business, online business... Well, there is place for that. Nobody said that we cannot provide same unified experience on corporate level. We can sell servers, clients, everything neatly packaged with all our business stuff. It just works. You need more clients, just buy another Microsoft-branded desktop and just join it to given corporation ID. Allow Microsoft laptop/desktop to belong both to your family network and your corporate network.
Contrary to many opinions among Mini-Microsoft participants, I do not think that you have to start slashing and killing products to become more profitable. This is always short term gain and long term loss. Provide better experience and synergy by owning all parts of it.
Forgive me for haphazard writing and incoherence - I typed this in less than hour, just to dump down all this thoughts I had swirling in my head. It is just that I am battling my inner conflict: On one hand, I cannot be really bothered with Microsoft direction. This is just a job, and nobody asks me for an advice on corporate governance. I should just let it go and look for another one, where I can meaningfully contribute. On the other hand, I can see tremendous potential Microsoft has, and pains my heart to see it squandered like this.
Well, what do you think?
