Microsoft Needs New Leadership

If there’s one thing obvious about Microsoft’s woes of the past decade, it’s that they all stem from it not creating anything exciting. It’s done all the right things to protect its ossified Windows empire to keep cash flowing from organizations that are themselves too entrenched to consider using anything other than PCs, but it hasn’t broken new ground.

I mentioned last Friday that the shift away from the effectiveness of Microsoft’s former monopoly coincided with the retirement of Bill Gates as CEO. Since then, the company’s stock has all but died, as shown on this great comparison chart made by Erik Pukinskis and displayed at Signal vs. Noise last Friday:

The problem is that Steve Ballmer tries keeping Microsoft in the consumer business when his company is actually in the big corporate enterprise business. That’s where he should focus, and compete against the likes of IBM instead of Apple and Google, which obviously outclass him. Corporate accounting departments don’t care about the appeal of products like the iPhone, iPad, Chrome, Google Earth, and so on. In the gray world of cost-only decision making, Microsoft’s uninspiring products like IE, Word, and Windows fare just fine. That’s why they remain popular. They infest every bland cubicle.

Products are bought either because they must be or because people want them. Bill Gates chose the former category and created one of the greatest business monopolies in history. Steve Ballmer has allowed that monopoly to get flanked by innovators who make products people want, and has responded by trying to compete against the innovators with his company’s non-innovative products. Can’t have it both ways. Either shore up the monopoly or get innovative.

There’s a lesson in this for all of us. Are we trying to break new ground in our work, or hold customers captive to an old way of doing things? There’s a valid business case for each. Are you in the solar and wind business or the deepsea drilling business? Are you in the mobile phone cool app business or the mission-critical database business? Answer that for yourself, and let’s hope Microsoft gets a leader one of these days who answers it and focuses the company on the right effort.

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2 Comments

  1. Joe
    Posted February 10, 2011 at 12:59 pm | Permalink

    Such hatred for Microsoft. Suggesting that Microsoft not compete in the mobile space is laughable.

    • Posted February 13, 2011 at 6:01 pm | Permalink

      Last Monday, Nokia’s CEO sent this memo to employees: “The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over two years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.”

      Then Nokia announced on Friday it was ditching its own Symbian/MeeGo operating systems to adopt Windows Phone 7 in a partnership with Microsoft. Isn’t it obvious that this is the loser’s bracket? Every time Microsoft competes against the innovators, it loses. While Apple and Google take over the smartphone market, Nokia and Microsoft are drafting a two-year plan to become relevant.

      Saying that Microsoft should leave online search and mobile phones to others is not the same as saying that those categories are unimportant. They’re hugely important for companies that understand them, but a money suck and waste of resources for Microsoft, which doesn’t understand them. It always loses when competing in these fields. It should focus its energies on locking up as much of corporate IT as possible, where innovation and “cool” are less important than reliability and standards.

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