Microsoft finally has given us a sign that the company understands its enterprise hegemony is at risk – and that it intends to do something about it. At their financial analyst gathering last month, executives dropped strong hints that the company is developing Outlook for the iPad and Android, although they didn't come right out and say so.
No question that such a move is long overdue. Office dominates business productivity, though it's under attack from Google Docs and other cloud-based services. And the longer it takes to protect that turf with moves like porting Office to other platforms, the larger the threat becomes.
But in fairness to Microsoft (did I just say that?), the issue is so knotted up in a web of competing company interests that I'm surprised that executives are able to do anything. Indeed, one of the more difficult challenges any executive faces is how to make and manage decisions that benefit one internal group at the expense of another. The rational option, at least from a pure market potential point of view, is usually pretty apparent. The difficulty comes in trying to navigate all the beehives around the organization that you'll be poking with your chosen direction. Imagine telling one of your kids that you love his sister more than him. If you can picture saying that -- and what it would do to your day -- then you've got a feel for management's challenge.
[ What else is happening with Office? Read Microsoft Creating New Office Touch Apps. ]
The dilemma for Microsoft with its Office decision is that versions for iOS and Android would weaken Windows' market position because it would hand to competing tablet platforms what today is an exclusive benefit that comes with choosing Windows. And it's not as though Windows' place in computing is so secure that in can afford to lose that. Many of its problems have been self-inflicted, yes. But the onslaught of tablets undoubtedly has contributed to the platform's state, which is shakier now than at any time since a superior DOS from Digital Research threatened the transition to Windows.
So what to do? Prop up Windows or let Office address the entire market? If what they've hinted is true, then Microsoft execs have made the right choice here. The rule of thumb for this kind of management dilemma is this: never clip one product's wings for the sake of another or you'll end up weakening both.
Microsoft's problem is a little different than your typical which-kid-do-you-love-more dilemma, because Office and Windows are roughly the same age and because they address more or less the same markets. Usually, the choice comes down to opting for entrenched or emerging. Old or new. Profits or promise.
That the type of challenge that Intel, Microsoft's platform partner, is facing: how to prioritize Atom, the processor family aimed at smartphones and tablets, and Core, the PC processor lineup. Brian Krzanich, Intel's new CEO, thus far has been clear in articulating his priorities. He's been careful to avoid saying that the company is focusing less on Core, though he has been unwavering in his assertion that he will give Atom every opportunity to shine.
In July, during Krzanich's first earnings call as CEO, one financial analyst asked him what he was doing to keep Bay Trail, the code name for the newest Atom chip, from cannibalizing Core sales. "At the end of the day, the market will go where the market goes," he said. "Better to have a product like Bay Trail so that we can play no matter where it goes rather than miss the market."
That's spot on. Again, though, it's easier said than done. I've been watching Krzanich at every turn to see if he conveys the same message -- and thus far he has. But again, that's the easy part. If an industry analyst like myself is watching this closely, then you can imagine how intently employees are hanging on his every word.
As it happens, propping up Bay Trail also helps Windows, because the new chip helps the platform to reach lower price points and also offer battery life that consumers expect in a tablet. So in this case at least, one company's dilemma is another company's windfall.
In the long run, the expected Office ports will be good for Windows because it will force the platform to compete without the crutch of a go-to productivity suite. It will be a difficult lesson to master in the meantime. But as any parent can tell you, every kid sooner or later has to learn how to make it in the world without you. Windows has been playing in the mainstream market for 23 years now. Seems to me that's as good an age as any to go figure out how to do that.