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Is Microsoft Cool Again? March 2, 2010

Posted by Peter Varhol in Software platforms, Strategy.
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So claims Fortune magazine writer Jon Fortt, who says that recent product introductions, such as Windows 7, the Bing search engine, and Windows Mobile 7.  He also notes a more humble attitude in the company, saying the CEO Ballmer admits that the company has some catching up to do.

My own take on Microsoft in recent years has been mixed.  That reaction has less to do with the company’s technology than in how it chooses to present that technology.  I think Microsoft has largely missed the boat on smartphones, the nice features of Windows Mobile 7.0 notwithstanding.  Past marketing and partnership agreements on Windows Mobile, along with development decisions on integration with other Microsoft applications, have made it much less relevant than it could have been.  I also think it’s too late; while being late to the game hasn’t mattered so much for Microsoft in the past, I think it does on phone platforms.

Likewise, I think there are many cool projects in Microsoft Research, from Doloto to MapCruncher.  But the company chooses to keep these efforts locked up in the lab, making them freely downloadable by users who come across them, but not turning them into widely known and profitable products.

I also think Microsoft Windows Azure is a leader in integrated stacks for cloud computing, but Microsoft has done little to promote it.

“Cool” is like former Supreme Court Justice Potter Stewart’s classic description of pornography – “I know it when I see it.”  But Microsoft, like any mature company, has a major problem with growth – existing proven customers are perceived more valuable than potential new ones.  This means that executive attention and resources are devoted to incrementally improving existing products rather than taking chances on new and unproven ones.

Cool connotes taking on calculated risks to produce something new and unforeseen that promises to excite the imagination (and open the wallets) of its intended audience.  Mature companies have trouble taking those risks, because they have less risk and a better return by servicing their existing customers.  Of course, that means that they miss turns in the market (Microsoft has largely sat out the ongoing shift from desktop to device), and don’t see many opportunities at all.

As for humble, the people I have dealt with at Microsoft at the working level have never been ardent believers in the company’s PR perceptions.  The only arrogance I’ve encountered has been with Steve Ballmer, and that was in 1988 when the company still liked to think of itself as a scrappy underdog.

As a point for comparison, how has Apple managed to navigate these tricky waters?  Largely by introducing new products that don’t compete with its established lines (the iPad may be a slip-up here).  I have no insight here, but I suspect that there are also tensions between Apple product lines in competition for attention and resources, but I bet new products receive enough resources to live or die on their own merits.  And as a result this large and mature company has been able to continue on a growth trajectory that would make anyone envious.

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