Microsoft Surprises: Controlling the Process

At the Web 2.0 Conference in 2005, a relatively new to Microsoft Ray Ozzie was fully engaged (spoke twice) and I had the pleasure to be seated in the back of the room near him and we bantered back-n-forth (as I mentioned in this post) a few times.

This past Web 2.0 Summit in November of 2006 saw, in my opinion, a significantly different Ray Ozzie. Rather than being the seemingly humble, I’m-one-of-you stance and conversational tone, he was positioning, spinning and coming across as though he’d been fully assimilated in the Microsoft way.

That said, it’s tough to walk in his shoes. I don’t know the man nor have I spent quality time in conversation with him. I’m not playing the game at his level nor am I someone who has to try to be THE guy that carries the essence and spirit of Bill Gates forward. Imagine doing that OR being the guy that takes over when Steve Jobs retires. Big shoes to fill.

This interview gives a glimpse into the gargantuan responsibility that he faces. The questions are: Will Ozzie change Microsoft…or will Microsoft change him? Since Ozzie didn’t even show up for Etech and seems to be in stealth mode, is he crafting some surprises?

I have little inside information though a good friend of mine is heading up one of their new, emerging categories. He is beyond busy so we have only cursory conversations and connections so everything in this post are my own observations and musings.

Here’s what I’m beginning to realize: Ozzie will be driving a series of Microsoft surprises that leverage Internet-as-a-platform AND PROCESSES in new and fundamental ways. Here are some of the signs I’m seeing to bring me to that realization:

1) Mix ’07 is sold out.On the frontiers of the Web, boundaries are blurring—developers and designers, advertisers and publishers, software and services, media and technology, TV and PCs, PCs and mobile devices, producers and consumers. The old order is getting a little MIXed up.” This conference is a positioning of Microsoft tools, approaches and delivery platforms to leverage Internet-as-a-platform. If the developers are engaged, trained, and the runtime is optimized with Microsoft in mind, the company doesn’t have to control the end point (e.g., Windows desktop or server) if they control the process!

2) Ozzie understands the value chain of Internet-as-a-platform and he had this to say in the interview referenced above, “The guidance that we are giving the development community — and the guidance that we use in-house — is to look at applications through the  following lens: When the business model behind that app means that you have to get it everywhere, we call that the “universal web application pattern.” When the most important thing is the experience that the user has with that application and you might be willing to trade off the breadth of the web for the richness of that experience, we call that an “experience first pattern.

3) Internet Explorer is dead. For some years I’ve been aware that Microsoft took the team off of IE and put them on the Expression suite of tools. I puzzled over why the company would allow Firefox to gain so much traction…but it’s because the Web browser as the target of Web application delivery will be increasingly irrelevant. Adobe Apollo, WPF/E are certainly interesting, but again, it’s “owning” the entire process that makes the end point delivery less important at this stage of the game.

4) Microsoft controlling RSS. When I wrote this and this post about Microsoft trying to patent the process of using RSS, it was indicative of the moves being made to ensure that they’d be in a position to manage the entire value chain.

Do you think I’m nuts? I’ve had the privilege to talk with C-level executives at media, publishing, automotive and retail. ALL of them concur on one major point: if you control either all or major points of the value chain (“It’s all about distribution” many have said) then you will win and be able to defend against competitors. I don’t think Gates, Ballmer or Ozzie are nuts and they’re going to figure out how to change Microsoft from a shrink-wrapped, software target of their effort to an Internet-process-centric software company with the targets being all along the value chain of Internet application creation.

Unfortunately most of us don’t spend our time analyzing Microsoft and many of us aren’t playing the game at a high enough level (or have at stake what Microsoft does) so focus on discrete pieces of the value chain.  Even high ranking executives I’ve talked with over the last few years have pointed to the iPod, an end point target and said, “…and we want to innovate with our products like Apple did with the iPod” as though it was the device that kickstarted them into the music industry.

It was the entire value chain. I’m certain Apple looked at that value chain from a 360 degree perspective before embarking upon building what they delivered.

From iTunes to the Music Store to the iPod — and, most importantly, a music industry perceiving that their stuff was being stolen out from under their very noses — that allowed Apple to step in and control major points along that value chain. It’s one of the reasons that we’re seeing few big media companies leaping toward Apple to allow them to distribute movies and TV shows…especially with Google’s Eric Schmidt on Apple’s board. Gives them the willies no doubt.

So keep your eyes open for moves by Microsoft. I predict we’ll all be surprised over the next 12 months or so.

3 Comments

  1. Colin Henderson on April 5, 2007 at 3:24 pm

    Steve … I have been with you on most stuff so far, but I don’t share the optimism for Ozzie. I think the earlier part of your post about the change in him is pertinent.

    I posted on this earlier today. The feature in this interview that I noted, was Whartons continual efforts (4 times) to get his focus, and four times the answer is unclear, at best.

    My take … the need to support Windows and Office revenue has overtaken his architects view.

    Time will tell.

    Love your blog by the way. I haven’t commented, but I appreciate your insights.



  2. Steve Borsch on April 5, 2007 at 7:03 pm

    Colin — Even after re-reading my post, I see it as less about Ozzie and more about Microsoft overall and their potential for surprises.

    Consider that Ozzie’s blog hasn’t been updated in a year; he had the seeming change of character publically displayed at Web 2.0 Summit; and the only transparency is in controlled environments. All of this stealth is contrary to Ozzie’s seeming embrace of the Web/Internet ecosystem early on. This tells me that the corporation overall is going through massive re-positioning and strategizing about their future…and until they’re ready to unleash surprises we’ll hear little from them and they’ll take the abuse and scorn of all others.

    “My take … the need to support Windows and Office revenue has overtaken his architects view.”
    I agree. But in the same way that it’s taken 10 years for a downtrending newspaper industry to finally reach a critical juncture causing consolidation, layoffs and public discussion of their business models (and we’re seeing the same thing now with the television industry), it will be at least five years before we see material reduction in Microsoft revenues causing a crisis. So for the foreseeable future, MSFT can wait until they’re ready to spring into action.

    An additional $.02 from me…



  3. Colin Henderson on April 6, 2007 at 3:03 pm

    Thats a fair point about Microsofts potential for surprises. I had assumed the bearer of such would be Ray, but your point is well taken. Its certainly true that when MS decide and go after something large, they tend to succeed.



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