Microsoft: Signs of Increased Distress
January 12, 2009
Silicon.com ran an interesting interview with Steve Ballmer, the chief executive officer of the $65 billion software giant here. “What Does Ballmer Worry About? Google, Google, Google” reminded me of Psych 103. A required course, the professor who was sort of wacky in a tweedy way described a range of obsessions, fetishes, and aberrations. I memorized these for a test and them hit the delete key. Ina Fried’s interview reminded me of that class, but you will have to read the article to see if your long term memory vibrates. The interview touched upon Vista, which does not interest me. On page two the subject of search arises. Now I am hooked. Mr. Ballmer is quoted as having said:
I mean, look, this is not something that changes overnight. Everybody wants us to snap our fingers. We have a good competitor, and yet at the same time, we see real opportunities to improve the search experience, to differentiate, but it’s not going to happen overnight. We’re going to have to keep working and working; innovating product-wise, marketing, branding, distribution, and we’re going to have to be patient about it.
I think I have read this quote with the word patience before. I keep hearing that Microsoft needs time and that pundits and Wall Street must have patience. I personally have run out of patience. The last unexpected crash of a Windows Server gobbled the last dollop of mine.
The other key point in the interview is the phrase “Google, Google, Google.” That’s repetitive as well in my view.
Let me offer three observations:
First, Google is a decade old. It’s dominance in Web search has been evident for years. I noted the gap between Google and its Web search competitors in my 2005 The Google Legacy. I reinforced that argument with an analysis of some of Google’s less high profile but very important technical investments. I can’t buy “patience” and I think time is running out. The gap in Web search is not a couple of percentage points. The gap is in somewhere in the country mile range.
Second, the fixation on Google is not healthy. Google is part of the Microsoft challenge, but it is not the sole cause. Microsoft has reached a point where it must split into separate companies or realign much as IBM did when it abandoned the PC front to Microsoft and embraced consulting. IBM’s a $100 billion outfit today, but it is not what it was in 1980, not by another country mile.
Third, the economic pressures on organizations with on premises software are increasing. As a result, an outfit like Google is poised to skim the cream from some market sectors. With the loss of “easy win” customers, Microsoft is going to face its own pressures: financial, managerial, and technical.
Oh, I remember the obsession–attention deficit hyperactivity disorder. Time for Microsoft to focus is my opinion.
Stephen Arnold, January 10, 2009
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