Forbes is Right – So What

by Dave Michels

Forbes published a tirade on Microsoft on Jan 2 titled Microsoft is Fast Turning Into a Sideshow. Roger Kay makes some compelling points that Microsoft is not as influential as it once was, and that it has missed or blown several opportunities, and that Ballmer isn’t the best CEO. He’s right. So what? Kay writes:

Microsoft has reached an Orwellian impasse, in which it cannot tell the truth — even to itself.  It is blinded by its own hallucinations about how the market is operating.

Sounds quite dramatic, but really what big company isn’t delusional? Have you ever read a press release? While Microsoft is losing ground with the consumer, it’s not as bad as Blackberry, SCO, Novell, Yahoo, or many others.  In other words, rumors of Microsoft’s death are greatly exaggerated.

I find it strange to defend Microsoft. I agree with most of Kay’s thought in Forbes. Certainly Microsoft could have been more, and certainly Google, Amazon, and even Apple’s success have largely occurred during Ballmer’s watch. But here is what Kay missed:

  • Jobs: Jobs was extraordinary and left few competitors well enough to talk about it. His vision, attention to detail, and ability made him very successful. Blackberry, Disney, the entire music industry, and anyone else he targeted didn’t have a chance. Microsoft got bruised, but actually survived. Jobs is dead, and while the world will miss him, Microsoft won’t.
  • Lync: Lync is proprietary, super complex, and far from cheap, but its tight integration with other MS apps makes it compelling. Microsoft is using Lync as a means to lock organizations into Office, Exchange, and SharePoint. A very sticky glue that leaked through the unguarded Presence door. Lync is growing – administrators and users like it. Telecom decision makers are increasingly data oriented people. The CIO knows brands like Microsoft – far better than the brands that came from the PBX world. For years Microsoft watched other firms (like Cisco) tightly integrate with Office and Exchange, the strategy to go into real time comms made sense. .
  • Cloud: It is abundantly clear that cloud services are the future.  Microsoft was late, but Azure is coming along nicely; as is Office 365, and Skype. Yes, Microsoft is struggling with Bing, but the enterprise doesn’t care.
  • Play Makers: Kay speaks of Amazon, Google, and Apple as the play makers in the industry. What industry? None of them have compelling enterprise plays. Sure, they are all penetrating the enterprise, but enterprises are big. Salesforce, Oracle, IBM, HP – are enterprise plays. Amazon, Google, and Apple are not enterprise threats.

The big question is who will replace Ballmer, and what will he/she do to make things better?  I’ve said it before, the first priority is to befriend Google. Here’s my proposal to strike a deal with Google. MS agrees to kill Bing and Google agrees to kill Google Apps. Microsoft targets enterprise, so sells off Xbox.  Here’s the key: Microsoft kills Windows 8 mobile and both firms embrace Android. They jointly control it. A new appstore is created for the enterprise called “Work,” and it requires Microsoft credentials. Microsoft operates the Work Store and Google continues with the Play store. Nokia and Motorola continue making devices, but Nokia becomes enterprise focused. Microsoft sucks at consumer (with a few exceptions) and Google sucks at enterprise (with a few exceptions), so everyone is happy.