Microsoft and Online Spending
May 22, 2009
When you are north of $65 billion a year in revenue, why explain? Mary Jo Foley’s “Microsoft’s Ozzie Defends Microsoft’s Aggressive Online Spending” surprised me for two reasons. First, the old saw “never complain, never explain” seemed to be ignored. And, second, Microsoft has cash, is floating a financial instrument to raise more cash, and the Windows 7 cash dump truck will be arriving in the near future. So, spend what you want seems like a reasonable approach.
Read Ms. Foley’s article here and make up your own mind. She reported:
Microsoft’s growing family of enterprise-focused services — Exchange Online, SharePoint Online, etc. — have taught the company a lot about cloud requirements. Its investments in consumer services have taught the company important lessons about scale, Ozzie said. The underlying infrastructure Microsoft has built to deploy and run its consumer services is now being extended to support other services throughout the company, he said. Ozzie pointed to “Cosmos,” the high-scale file system that is part of Microsoft’s Azure cloud platform, as ultimately supporting and aiding every consumer, enterprise and developer property at Microsoft. He noted that the management systems for Microsoft’s current and existing cloud services are all derived from the learnings Microsoft has gleaned from managing its consumer online services. Ozzie said he believed one of Microsoft’s main advantages vis-a-vis its cloud competitors is “the fact we build both platforms and applications.”
This sounds reasonable to me. The one thought that struck me was that Microsoft’s spending in the last few years has not brought the financial home run that I had anticipated. For example, the purchase of Fast Search & Transfer and Powerset now seem in retrospect to be interesting ideas but not yet ready to deliver megabucks. In fact, if the chatter I heard in San Francisco last week is anywhere near accurate, Microsoft may be bundling Fast ESP with SharePoint for certain clients to prevent a third party vendor from getting its snoot in the cubicles at a Microsoft-centric organization. Second, the money poured into Vista was not exactly wasted, but the grousing and negative vibes rightly or wrongly flowing through the Web postings did not put money in the bank. I don’t pay much attention to consumer products like the Xbox and the Zune, but so far neither has been the Gold Rush for which I had hoped.
Nevertheless, Microsoft has money, and in my opinion, it can spend it any way it wants to spend it. The “defensive” spin tells me that maybe there is some force field operating when Microsoft gets in front of investors and bankers. What do these audiences know or do that makes a technologist adopt a tone that connotes uncertainty and doubt?
On a related note, a reader groused about my pointing to information about SharePoint that I obtained from Mary Jo Foley’s article about search for the new SharePoint. I point to stories. I don’t create the stories. I encouraged the reader to take his grousing to my source. I enjoyed his commentary, but I can’t do much to infuse accuracy in the stories which I read and upon which I comment. When I checked out his complaint, Ms. Foley seemed to be recycling what Microsoft has said about enterprise search. I find it quite common that “old” news is included in “new” news releases. The reason, I believe, is comprehensiveness, not nefarious behavior.
I like Ms. Foley’s work, and I will continue to point to her write ups, which are often better than the drivel I find in other free Web sources.
Stephen Arnold, May 21, 2009
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