Here's my reason: Microsoft doesn't yet want to change badly enough. Too many parts of the company are comfortable doing business the way it's being done today. I'm sure that there are many executive meetings where the division heads nod in agreement at Ozzie's master plan. When it comes down to implementation, though, they point out that these new ideas pose a threat to their existing products, and it's inevitable that revenue on existing product lines will go down faster than new product and service revenue goes up. Timid action, then, is the best course for near-term profitability.
Here's one quote from Ozzie's e-mail:
Complexity kills. It sucks the life out of developers, it makes products difficult to plan, build and test, it introduces security challenges, and it causes end-user and administrator frustration. Moving forward, within all parts of the organization, each of us should ask "What's different?" and explore and embrace techniques to reduce complexity.
To at least some parts of Microsoft, this is heresy. Complexity seems part of the intellectual challenge and key to Microsoft's competitive advantage. Plus, all the pieces-parts have to be Microsoft through and through for complete and total control of their products. The job isn't done at Microsoft until it's embraced, extended, or reinvented Java, Flash, browsers, and every other technology it may need to use. Nothing needs to be taken as given in a Microsoft plan; Microsoft can tweak every piece, and every division of the company wants to be a major player in the vision. Microsoft Web sites will be built with the .Net Framework, C#, Silverlight, and other Microsoft products; thousands of Microsoft employees will be needed to support those technologies.
Google, whether by necessity or by choice, has decided to take advantage of outside work on browsers, programming languages, and other technologies. Yahoo can't force users to choose a browser, so it focuses on a Web framework and design patterns to make its sites work with whatever the user has. As a result, these companies put most of their attention on delivering content, services, and advertising. Microsoft can't do that, not even its Internet group, because those choices are constrained by what the other Microsoft groups want to deliver.
With that perspective, Ray Ozzie's vision seems to be too ambitious. It manages to include nearly every nook and cranny of Microsoft's empire, and tries to tie them together into the master plan. But that will just make things harder to change. The Internet group is the tail of Microsoft; every other part of the dog is more profitable and therefore more influential -- no matter the lip service to the Internet. The technical complexity can't be eliminated because it reflects organizational complexity and priorities. Unfortunately for Microsoft, there's no sign that the company has a plan to address that problem.