My Blueprint for the Future of Microsoft-Part 2
In a recent column I wrote what I called my Blueprint for the future of Microsoft. In it, I proposed that Microsoft be broken into three separate companies or divisions – one focusing on IT, Enterprise and Business; one focusing specifically on mobile; and another aimed squarely at entertainment and the connected home. Many of the comments at the end of the article supported this viewpoint or at least saw merit to it. On the other hand, since this column was linked to by many other sites, I also got comments at the other end of the spectrum that suggested I was nuts. The best one recommended that I should apply to be on Microsoft’s board. One major blog in Seattle even used it as the basis to argue that Microsoft should not spin out Bing or the Xbox group.
When I wrote the piece I thought that allowing them to be separate companies had merit and in many ways I was thinking it could work. But since that time I have been studying more of Microsoft’s overall cloud initiatives and am wondering now if the best way to do this is to just create three distinct divisions that would have a laser focus on their specialties and integrate Microsoft’s overall cloud products into all of them in one form or another. For example, Bing would be a critical tool for use in IT and Enterprise, mobile and any entertainment and connected home products. Also their synchronization layer would be needed to keep all apps and services in sync between any of these divisions. To some degree I suspect this was part of Ballmer’s One Microsoft vision, however, I believe that ultimately his vision was still too PC centric and that is why he clearly was not the right person to move Microsoft forward.
The ultimate idea behind my blueprint still stands. It needs to be split into three major divisions that have a laser focus with objectives to be the top players in each segment they target. In past years as Microsoft grew, most of the focus was on their current cash cow products, such as Windows and Office, while the mobile group did not receive the proper attention or focus since PCs were still the major products being supported. However, with Apple introducing the iPhone in 2007, Microsoft should have seen its potential and put as much money and focus on mobile from that point on. Instead we heard that the mobile phone group was constantly competing with other more profitable Microsoft businesses for R&D funds during that time as well as clashing with the Windows group since it appears that they wanted the core Windows OS to eventually be Microsoft’s major mobile OS in the future.
By the time Apple introduced the iPad, Microsoft should have been ready to move Windows Mobile onto that platform and instead we got the current version of Windows 8.1 being pushed down to smaller screen sizes. This only emphasized the fact that the company continues down a PC centric path instead of seeing mobile for what it is – an opportunity create a rich mobile platform in its own right that could help them expand their presence in the era of mobile and its staggering growth curve.
Interestingly Microsoft already had a precedent of creating a dedicated OS that was not Windows based. They did that with the Xbox. That group fully understood it was not a PC and delivered a rich OS that focused specifically on the gaming experience but was smart enough to design it as a platform so that its use could eventually be expanded. Today it serves as a front end to a TV and delivers OTT programing from Netflix, Hulu, etc. It can also be fine-tuned to be a set top box if necessary.
In my blueprint piece, I suggested that this group, or division, also be given the connected home program and let it integrate Microsoft’s cloud apps and services into their products and services.
At the upper end of the market–mostly the commercial market–Microsoft still has to focus on Windows, Office and servers. Even though demand for PCs is declining, the industry will still sell between 280 to 300 million annually for at least the next 3-4 years. At the very least they will have to support the installed base of PCs for many years to come. Also, while demand for Office in consumer markets is also declining given the competition they have from Google, Apple and other SAS office like tools, Office 365 still has potential. This group oversees their cloud program and would have to work closely with the mobile and entertainment group to make sure things like Bing and ActiveSync is fully integrated.
As for Mobile, as suggested above, this group would also need to have a laser focus and not be forced to push any form of PC centric thinking that would influence their vision for mobile. It has to have the ability to create the greatest mobile platform regardless of its legacy links to Windows. While I don’t propose they adopt Android, as I stated in the blueprint article they should be free to create a rich mobile OS that uses the look and feel of Windows mobile but also be free to virtualize Android apps to run on Windows Mobile devices to help them gain access to the long tail impact of mobile software apps. As it stands now , they are not going to convince enough mobile app developers to create apps for Windows to make them truly competitive with Apple and Google’s Android ecosystems. This group should also spearhead any wearable products Microsoft would create for this market that is poised to grow exponentially over the next 5-7 years.
Microsoft’s cloud apps and infrastructure are critical to Microsoft’s future and need to be tapped and integrated deeply into all of these three groups or divisions. I suspect the best way to do this is not to spin each out but by creating three distinct divisions that will be empowered to have dedicated goals, focus and autonomy.
More importantly the mobile and entertainment group has to be free to move completely away from the PC centricity of the past and to a world in which the platforms for each group are designed to be best of breed without any legacy baggage. In my viewpoint this is the only way to deliver a One Microsoft vision that will keep them competitive and relevant.