Microsoft Memos

Well, everyone else is talking about this today – might as well chime in!
I just finished the Ozzie memo. I had read the Gates email yesterday. I thought the email was right on target. It is a clear recognition of a significant new industry trend and a very important recognition of the need to change and adapt yet again. But I wonder whether it will be possible this time. They have spent the past few years institutionalizing their very successful culture, and this change represents much more than a change in technology direction – it is a fundamental business model and culture change.
I do not see evidence in Ozzie’s memo of any specific plan of attack. The description of the problem seems very good, but there’s nothing about a solution, or how exactly he expects Microsoft folks to go about implementing the proposed changes. He’s asking for a study, for each division to respond with a proposal to solve the problems he describes, and he has created a process within which he will be assigning people to work on solving the problems. But again, nothing concrete about how it’s going to happen, or what it will mean in terms of products and technologies. We all know the problem – what we are looking for is what Microsoft will do about it, and there’s nothing here about that.
Of course, the email and memo were very likely designed to be released to the public, which is pretty clever if so since a large part of the change they’re talking about involves innovation “in the open” as Google has been doing, for example. They have been releasing their works in progress publicly, as does the open source community. Traditionally, Microsoft’s innovation is performed behind closed doors, and even if you sign an NDA you may still not get access to everything they’re doing or thinking. So “leaking” the memo and email would be a clever move in this direction, even though they don’t really contain any specific details about their plans.
Unlike the earlier efforts they cite as precedent, such as the famous Internet memo and the “bet the company” on .NET and XML/Web services, there’s no concrete action here other than a call to work on proposals and processes for solving the problem. No solutions are proposed.
Furthermore this comes at a time where Microsoft is heads down working to fulfill its commitments and promises around Vista, Office 12, Communications Framework, Workflow Foundation, new SQL Server, new Visual Studio, etc. These are all scheduled to ship around this time next year, and I can’t imagine everything is ready. I have more of a picture of the folks in Redmond sweating out the final days of testing, bug fixing, etc. in a big rush toward the release date, as always happens in large software projects, rather than sitting around contemplating solutions to new problems.
Bill Gates says he wants quick action but Ozzie says this initiative is intended to start after this next generation of products ships and people will start to free up. But this means effectively nearly a year before the company can really start working on this initiative.
Beyond the technical challenges, which amount to turning around in mid-stream, this also represents a cultural challenge since Microsoft has built up its entire business around the shrinkwrapped license. A recent Gartner survey showed that Office 2003’s biggest competitor is Office 2000. The article about upgrading to Office 2003 shows that majority of users are still on Office 2000. In fact a higher percentage are on Office ’97 than on Office 2003. And now we are talking about introducing Office 12, and working on “services” at the same time, or after the release of Office 12 (when staff will be freed up), when customers are still not moving to Office 2003.
In other words, Microsoft’s fundamental business model, that drives all the cash flow, is under threat because people are not upgrading – people do not seem to need new features in Office or Windows, preferring what they have – while at the same time they are trying to change the business model of how they make money on software by turning to advertising. They do not have the proposed solution for that – just the problem statement – and they are still struggling to execute their current plans.
Finally, I think the recent reorg into divisions will work against this proposed change to “services.” Ozzie is asking each of the divisions to come up with plans and proposals to address the problems he outlines but they are as likely to compete with each other as cooperate, as he points out they are already doing in several areas.

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One response to “Microsoft Memos

  1. interesting, ozzie’s memo is quite revealing, especially around AJAX, being in OWA all those years ago. It really is the difference between the unix type development, open to the world, and microsoft approach:release it when it is ready.
    I think the killer portion of the microsoft framework/stack is the .net framework and clr, but they are not really helping drive innovation outside of the windows platform (the mono project reports real problems dealing with MS, afaik).
    thanks for this post — i’ve been travelling and missed the news on the interweb. /ask