time changes everything

In Redmond, The Times, They Should Be A-Changin’

time changes everythingWhile the recent news has been dominated by VMware, many eyes have been focused on Microsoft since the recent announcement by Steve Ballmer that he will be leaving his post as CEO within the year.  His announcement certainly wasn’t a surprise, being something that investors have been calling for over the past few years.  In fact, the company’s stock shot up almost 10% in pre-market trading in response to the news.

It’s difficult to characterize the tenure of Ballmer as a success by any definition.  Under his long reign, the company mis-executed on a number of market transitions, including mobile and tablets; they were late to cloud, MP3s, and behind on server virtualization.  The irony of many of these missed opportunities is that they were actually first in a number of them — remember the Windows-based Treos?  What about all the Windows tablets that preceded the iPad? Microsoft was actually a visionary in some of these markets but the execution was terrible.

I think one of the things that Microsoft didn’t understand was that user experience became the most important competitive differentiator.  For example, take the Zune, Microsoft’s MP3 player and response to the iPod.  I had one, and it required me to set up sync through Windows Media Player but to download music through another application.  It’s not that the device itself was bad, but the whole process to download and put music on the PC was substantially more complicated than with an iPod, and consequently made for a worse user experience.

Another example of a missed opportunity was the smart phone wave.  Before the iPod and before Android, there was Windows Mobile on the Treo.  I actually had one of these, too, and even though I was a big BlackBerry fan, I liked the touchscreen and mobile browsing.  The biggest issue with it, though, was that it used the traditional Windows interface with a “Start” button, making navigating to the applications a hassle.  I remember asking the Windows Mobile team about this, and asking them to show me any research, anywhere, which showed that users wanted a Start button on their mobile device.  The fact was there wasn’t any; it was just Microsoft’s fascination with that interface.  I’ll admit, it was a great interface for a mouse, but it was terrible with a mobile phone.  Apple then revolutionized the smart phone industry with the iPhone, Android came out to challenge Apple, and the rest, as they say, is history.  In fact, I don’t believe Microsoft has had a credible phone OS until this latest release of Windows Phone 8, and now it’s too late.

One recommendation I have to the incoming CEO is to ditch the Windows brand.  As popular as Windows has been, it is an operating system for an era long gone.  When people think “Windows” they think of traditional PCs and business applications — not exactly a wow factor.  If Microsoft wants to keep Windows around as a business brand, that may work, but none of the younger generation wants anything to do with it.

However, all is not lost for Microsoft.  Despite the lack of success it’s had in many of these initiatives, there are signs of life with Hyper-V, Lync, Azure, and Skype, while Office, Exchange, and Share Point remain staples within corporations.  I had thought Google Apps could challenge Office more, but Google is still missing too many key features to make it a credible alternative.

I’d like to see Microsoft replace Ballmer with a younger, more progressive CEO who thinks mobile and cloud first, and not someone who’s steeped in legacy computing.  I’ve seen some recommendations of people like Lou Gerstner — he certainly has a big name, but he doesn’t bring the “younger-generation thinking” that can change Microsoft.  I’m also not sure there’s anyone internal that would fit the bill; I believe most of the obvious candidates would simply extend the path that Microsoft is currently on.

My recommendation would be a person like Yahoo’s Marissa Mayer.  I’ve been critical of some of her decisions, but she’s clearly brought new thinking and a new culture into Yahoo.  Another choice would be someone like Stephen Elop who left Microsoft in 2010 to run phone manufacturer Nokia, but who may make a return to the corporation with MS’s recent announcement of its acquisition of the mobile giant.  VMware just hired Sanjay Poonen — SAP’s former mobile chief — to run its desktop computing group and to give it more of a “mobile flare”.  His skill set and “mobile first” thinking would make an interesting choice for Microsoft as well.

When the transition from Gates to Ballmer happened, the task was to keep the Microsoft train running.  The task of the next CEO is to be an agent of change.

Image credit: Elena Fidanovska (flickr)

About the author
Zeus Kerravala
Zeus Kerravala

Zeus Kerravala is the founder and principal analyst with ZK Research. He provides a mix of tactical advice to help his clients in the current business climate and with long term strategic advice. Kerravala provides research and advice to the following constituents: End user IT and network managers, vendors of IT hardware, software and services and the financial community looking to invest in the companies that he covers.