BLOGNAME: LOUDER THAN WORDSAn informal, stream-of-consciousness reflection on business ideas, events and issues in modern business, modern life and with some specifics to the web-software industry by Paul Tomori, Internet Entrepreneur
|The Sleeping Giant in Redmond|
By Paul Tomori
Friday, October 29, 2010 at 10:00:19 (EDT)
As you know from previous blog posts, I am a Mac convert and perhaps even an evangelizer. The media is also favoring Apple (and even Google) over Microsoft these days. And, if you watch the stock markets, you'll know that Microsoft stock pricing has essentially been flat for about 10 years. There have been countless flubs and failures to launch with Microsoft (compare their tablet farce from about 6 years ago against Apple's iPad this year).
Notwithstanding all that, there are a LOT of smart people working for this behemoth from Redmond. And, they have well-lined coffers and strong revenues and strong profits. By most measures, Microsoft is an enviable company with vast resources. When I think of how tricky it is to coordinate efforts and set vision at my small enterprises of less than 20 people, it overwhelms me to imagine having to set an agenda at a company with close to 100,000 employees. It's mind-boggling.
Steve Ballmer, who took the reigns from Bill Gates shortly after the anti-trust problems back in the late 90's has been the fall guy for much disdain toward Microsoft. His task has been enormous... to recover goodwill after all the legal proceedings, to deal with the pains of enormous success (Microsoft products became the target for thousands of malicious attacks and viruses over the years, mostly because some people always want to take on the incumbent giant), to set a vision and execute a strategy against an ever-changing backdrop (think of the move away from desktops to cloud computing), and more.
I remember back in 1996 thinking that the web ship had set sail without Microsoft when a small upstart called Netscape commanded near 100% usage of their browser. I remember underestimating Microsoft then (it only took a couple of years for them to establish dominance over Netscape with their Internet Explorer browser from out of nowhere).
One challenge when you have so many employees is making sure that they are kept busy fulfilling the agenda of the firm. I think this led to a bunch of very smart people developing un-needed, un-wanted program features for programs like Word and Excel... just to keep those people busy! To this day, I find using the modern Word and Excel frustrating and annoying. Those programs try to anticipate your wants in formatting, capitalizing words you don't want capitalized, indenting numbered lists when you don't want indents, etc... And Excel, sheesh.... have you seen the formula options? It's like Greek... and I have a pretty strong grasp of mathematics. In their effort to "empower" their users, they overwhelmed them.
However, it would not take much for Microsoft to do a course-correction. They just need a vision. They need to get back to basics and stop creating products that require PhDs to understand and use. Apple nailed it with their one-button iPhone. Isn't that amazing? In a world that was formerly dominated by Blackberry's with sliding wheels and buttons on the side and dozens of buttons on the face along comes Apple with a new vision... one button on the face and a volume control on the side. Amazing. They underdid their competition and are winning in spades.
But, as Warren Buffett would say, this is hardly a "moat". The wonderful thing about tech companies is that they can re-invent themselves and adopt a new strategy... if they want to. Then, the competition will heat up again and Apple's moat will narrow considerably.
In my view, Ballmer has to go. He's a smart man, but he thinks like an overbearing football coach who wants to outdo the competing team at all cost. Instead, Microsoft needs someone who will be "customer-centric". Stop thinking of the competition Mr. Ballmer and just put your enormous resources on developing products that the public will salivate over.
I have taken this view in recent years by not even looking at my own competitors and by forgetting they even exist. We just come to work everyday with a vision to make our services better and a magical thing keeps happening... we keep wowing our customers. Yes, we sometimes lack consistency of purpose and yes, we trip on ourselves a little here and there, but we are making progress. Our timeline is no longer 2 or 3 months... it's 2 or 3 years. Our agenda is no longer dictated by keeping up with features we see in the competition's product... our agenda is our own and we actually listen much more closely to our customers. It's been very liberating.
What Apple has that Microsoft lacks is a clear-headed visionary in Steve Jobs. Without Jobs, Apple might have gone bankrupt in the late 90's when they were down to 2 months of capital.
Either way, I have a great admiration for Microsoft despite their stumbles... and I won't underestimate them or write them off like some of the media pundits are doing these days.
The sleeping giant in Redmond still has a lot of life left in him. He just needs to wake up and stop trying to bake Apple into a pie. It will be interesting to see what happens when they come to their senses.
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