Memo To Ballmer: Microsoft Doesn't Control Its Own Destiny - InformationWeek
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7/28/2008
06:59 PM
Dave Methvin
Dave Methvin
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Memo To Ballmer: Microsoft Doesn't Control Its Own Destiny

Last week, a Steve Ballmer memo leaked out. The main point of the memo was to announce the departure of platforms and services chief Kevin Johnson. However, other points in the memo caught my attention.

Last week, a Steve Ballmer memo leaked out. The main point of the memo was to announce the departure of platforms and services chief Kevin Johnson. However, other points in the memo caught my attention.Microsoft depends on developers to create the software that makes Windows attractive to users. Ballmer understands that when he says, "We also have to drive developers to create rich applications for Windows." But then he goes on to say, "With Internet Explorer and Silverlight, we have great tools for creating applications that run everywhere. But we also need to make sure developers have the .Net skills to write unique Windows applications using Windows Presentation Foundation." In other words, Ballmer is praying that developers adopt Microsoft's brand-new lock-in technologies, when open alternatives and well-established standards already exist.

Microsoft depends on hardware manufacturers to create the systems and peripherals that can run Windows well. Ballmer says, "In the competition between PCs and Macs, we outsell Apple 30-to-1." What do you mean "we," Steve? Microsoft doesn't sell even one PC, and that's been a problem. PC makers have further tarnished Microsoft's reputation by sending hardware to consumers bundled with poor-quality device drivers and annoying trialware. Microsoft's hands are tied on this point, lest it be attacked for exercising monopoly powers.

Microsoft depends on retailers and direct-sale manufacturers to sell and support the systems that have Windows installed. In the parlance of the industry, Microsoft doesn't "own" those customers, so users don't tend to have any relationship with Microsoft. Instead, they deal with Best Buy, Geeks on Call, Dell, and their local computer guys. Often those experiences relate to spyware and software disasters, and are about as pleasant as a visit to a fly-by-night auto repair shop. Whether it's fair or unfair, users associate their bad PC experiences with Microsoft because that's the logo that flashes up each time they start the computers. Branding cuts both ways.

How does Microsoft's position contrast with Apple? Apple manufacturers its own hardware and peripherals. Apple writes the operating system and a lot of the application software. Apple has its own stores where you can buy the hardware and software. If you need help using the computer, you can go to the Apple Store's Genius Bar. Apple "owns" its customers. Apple controls its destiny.

If Microsoft wants to compete with Apple for the hearts of consumers, it needs to stop leaving its fate in the hands of OEMs and software developers. It needs to be more vertical. It could build a MicroBook that takes full advantage of Vista power management and fast boot capabilities. Perhaps we could see a MicroPhone that shows some innovative ideas in hardware design, and Microsoft could use its influence to make sure that the phone isn't feature-crippled in order to satisfy the carrier's profit motives.

Does that seem crazy? Yes. But what about the Zune? Microsoft messed around with hardware makers for years before belatedly deciding to take the DIY approach, which didn't thrill its PlaysForSure partners. Yet if Microsoft has confidence in its platforms, it needs to prove that the weak links in the Windows chain have been the partners and not Microsoft. It doesn't even need to sell a lot of whatever it builds, just enough to show how it should be done according to Microsoft. In the process, it may find out that it's been asking a lot -- perhaps too much -- of its partners.

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