Inside the Microsoft Mind

June 6, 2008

The Washington Post‘s Peter Whoriskey did a bang up job with his interview of Steve Ballmer, the lead dog for the Microsoft pack. Traditional media can make it tough to locate an electronic version of a story, so click here immediately and read the article.

I don’t want to spoil your fun, so I won’t recycle or paraphrase the statements Mr. Whoriskey captured. There was one comment that stuck in my mind:

I have no clue what [Google is] up to. It’s very hard for me to understand what they are up to. . . . I don’t know what Google’s angle is because it sometimes looks like Google wants to become a telecommunications company. And yet that may not be right. But that recent thing where they went in with Sprint and WiMax guys is very confusing to me. I think it’s very confusing to a number of telecommunications companies, as well.

This statement is particularly revealing to me. I have a modest bit of experience with Microsoft, both in the pre-Google days (before 1998) and the post-Google days (1999 to 2007). When I worked on a couple of tiny jobs as a sub sub contractor to the Redmond machine, the focus across the people whom I met was pretty clear. In fact, the people used the phrase Microsoft agenda to refer to Windows, Office, and servers. The “agenda” meant sell licenses, get organizations drinking the Microsoft-flavored KoolAid, and “put a computer on every desk.”

The post-Google period can be summarized for me to one word: Diffused. The original “agenda” expanded in a number of ways. These decisions have been documented in hundreds of books, articles, and Web log posts. Let me mention a few and then move on to my observations: MSN, Zune, Xbox, WebTV, and UMBC. Promising businesses to be sure: “agenda” changers all.

Mr. Ballmer’s statement about his not understanding what “they are up to” is revelatory. The “they” is Google. I wonder if the “confusing” part of Google is a reflection of Microsoft itself.

What’s my research suggestsis that Google is moving in a deliberate way and has been since its initial public offering. As the company has grown, there are more Google initiatives but these are of almost zero incremental cost to Google. Most Google innovations are software that a code wizard loads on the Google super computer. If there are clicks, Google cares. If there are no clicks, there’s no cost or revenue loss, just learning what doesn’t work.

I have documented what Google’s approach in my two studies, The Google Legacy (plumbing) and Google Version 2.0 (mathematical methods). You can buy copies of these here. Others have followed in my footsteps and in many cases gone far beyond my individual, early research about Google.

I can sum up six years of research and hundreds of hours of conversations about Google in one word: disruption. Google disrupts and then looks for advantages. “Look for” is a bit too proactive. What Google does is let the clicks guide them.

Microsoft is facing a disruptive strategy hooked to a different business model. Verizon feels the disruptive force. Traditional publishers sense that Google is “coming”. I look forward to more information from the mind of Microsoft as it wrestles with Google’s digging in and getting comfortable in some of Microsoft’s markets.

Stephen Arnold, June 6, 2008

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