Microsoft's challenge: Innovation, innovation, innovation

Microsoft's challenge: Innovation, innovation, innovation

Summary: Former Softies are weighing in publicly about Microsoft's culture of innovation -- or lack thereof -- in the past couple of days. What they aren't doing is offering any real suggestions about how Microsoft can make a company of 90,000 or so employees more agile, less insular and more innovative.


Former Softies are weighing in publicly about Microsoft's culture of innovation -- or lack thereof -- in the past couple of days. What they aren't doing is offering any real suggestions about how Microsoft can make a company of 90,000 or so employees more agile, less insular and more innovative.

Don Dodge, who was cut in the last round of Microsoft layoffs, only to resurface days later at Google as an evangelist, is extolling the virtues of Macs this week. Dick Brass, who retired from Microsoft in 2004 and was instrumental in the Tablet PC launch, is airing his grievances about what went wrong back in 2000 in an op-ed piece in the New York Times. Bill Hill, the leader of the ClearType team at Microsoft who left Microsoft last summer, has a post on his personal blog that also criticizes Microsoft's development and commercialization processes.

I've met and/or heard all of these folks speak during my time covering Microsoft. They've all had their share of justifiable frustrations with management, as have most folks who leave a company (voluntarily or not). Apple's launch last week of the iPad, with many subsequent stories and blog posts declaring Microsoft had lost their ten-year lead in the tablet market, probably led, at least in part, to Brass' and Hill's discontent.

The most surprising thing about a number of industry watchers' reactions to these complaints, in my mind, the fact that anyone is stunned to hear that Microsoft is a political place, populated by some execs who seem intent on building empires inside the Empire. Hello, corporate politics! Show me a big company that isn't a shark tank, and I'll show you a company that has no teeth.

Secondly, I'm also surprised that anyone familiar with Microsoft's history is shocked that one Microsoft team tried to kill off another team's project because it was viewed as internal competition. It was common knowledge that when Bill Gates was still CEO at Microsoft, and for years afterwards, Microsoft's brass routinely pitted one team against another inside the company and let "the best" team win. Just one of many examples: Remember the Office vs. NetDocs contest? NetDocs -- which could have become Microsoft's equivalent to Google Docs if it had launched back in 2001 -- lost.

Over time, many of the Microsoft teams and managers that "lost" didn't succumb simply because their technology wasn't innovative enough. Sometimes it was too ahead of its time. Other times, it lost because the Microsoft managers in charge of the company's money-earning cash cows (like Windows and Office) didn't want anything to upset their fiefdoms.

Are these healthy behaviors? No. Did they actually make Microsoft any more successful? I'm doubtful.

The other and more intersting question raised by Brass and others -- besides which manager killed whose project ten years ago -- is about innovation (whatever that really means). The tech world has changed a lot since the early part of the last decade -- the period about which Brass's criticisms focused. In spite of CEO Steve Ballmer's public bluster, Microsoft execs actually do realize they can't ignore Web apps and Web standards. Microsoft no longer acts as though Apple is nothing but a minor irritant; in fact, I and some other company watchers have said we think Microsoft is too Apple-obsessed for its own good.

In the past couple of years, in particular, I've felt that Microsoft's top execs have come to understand (for the most part, not completely) that internal dog fights ended up causing more harm than good. To try to kick start innovation, new tactics are being put in place, like the creation of hybrid labs (Live Labs, Startup Labs, DevLabs, etc.), designed to allow smaller projects to have a better chance to make it to the commercial market. At the same time, Microsoft execs also have been incubating a number of other projects -- things like Midori, Azure, the Online services, etc. -- to give them a head start. And then there have been the attempts by Microsoft to spur innovation by sequestering certain teams and separating them (physically and virtually) from the rest of the company while they mature (think Xbox, Zune, Courier).

Will these kinds of changes be enough to keep Microsoft in leadership positions outside of Windows and Office -- the two places it has a monopoly? I'm not sure. But at least management is making some changes in attempt to become more agile.

As others have said today, it's easy to be the Monday morning quarterback, analyzing in hindsight what Microsoft could/should have done. It's hard coming up with ideas about how to make a company as big and established as Microsoft able to keep pace with a rapidlychanging tech environment.

Would breaking the company into a consumer company and an enterprise company help achieve this goal? (Sometimes I think so....) Other thoughts about how  -- and if -- Microsoft can become more innovative?

Topics: Emerging Tech, CXO, Microsoft, IT Employment


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • M$'s problem is spending 90% of resources thwarting competition and 10%...

    or so actually solving technological problems.
    The Mentalist
    • MS's Problem

      So I guess that puts them way ahead of linux since they spend nothing
      • Linux spends much less but delivers a lot more

        And I think I should let you know that currently about 75% of the Linux Kernel is being developed by paid developers, they are mostly contributing driver code.

        Yes, hardware manufacturers are actually paying programmers to write Linux drivers for their devices. I wonder why.
        The Mentalist
        • Except a product a broad number of people are willing to use.

          Lots and lots know about Linux. Many actually try it. Few use it for day
          to day work.
          • So my Palm Pre and my TomTom don't exist...

            Not because you don't use it on your desktop doesn't mean you don't use it at all.

            Linux server share is almost 60% if you consider mail servers, firewalls, routers, etc. Most Windows servers are bought to run classic ASP.

            Windows is entrenched in what now has become a niche market (desktop PC and regular laptops).

            Although it clearly dominates the current Netbook market, signs show it won't last for long considering Apple has cemented a new category with the iPad (even if they aren't successful inside it).

            Then again, most people today think of Windows as being all of IT, when in fact it's just one niche inside a much greater spectrum of technologies.
          • You can't compare.....

   functionality devices to desktops. The more limited the range of function (including web and database servers, powerful as they are), the more the device suits Linux. Broad and robust functionality is an advantage of Windows, in both server and desktop spaces.
            Lester Young
          • no comparison

            I've got 3 desktops and one laptop all running Linux. None are limited in function or range. All have robust functionality in as broad a spectrum as you can imagine, without having to pay for it.

            Of course, since Windows isn't exactly scalable, it's not made for limited devices either. Linux does an amazing job in that arena as well.

            In fact, about the only arena I know of that Linux would lose to Windows is familiarity. People are afraid of change. However, when they realize the alternative to change is continuing with something they'd end up spending hundreds of dollars to repair (like what happened with one of my neighbors), they quickly adapt.
          • There's nothing technically there that Linux can't do...

            ..that Windoze can, other than the fact that the 3rd party developers won't build a version of their programs to run on it.

            It's not the OS itself, but the lack of ecosystem that surrounds it.
          • Ever hear of servers?

            I thought not.
          • There are servers, then there are servers.

            For local network and productivity servers, the overwhelming favorite is Windows.
            Lester Young
          • in other words

            People who have no clue what they're doing who haven't graduated to the major leagues go Windows.
          • Try reading before posting

            The comment I was responding to said (referring to Linux) "Few use it for day to day work." Few other than major enterprises. Few indeed.
        • Why....

          Does this always turn into an OS war with you guys? This is article is about Microsoft, the company. It's not about Microsoft, the OS. Microsoft, the company, has more products than just Windows. Quit being a troll.
          • why is it......

            Every time Linux is brought up in the discussion after a comment warranting its inclusion that suddenly it's an OS war?
          • Fair enough

        • Typical response from...

          someone with your moniker. companies are actually paying coders to write driver because it's actually being used. People who use Linux, be it me or the grandmom sitting at home sorting pics of their grandkids and emailing their bridge club or whatever don't WANT to or CAN'T afford to pay exhorbinant prices MS is charging. Hell, in this economy, if I have a choice (and note the word "choice" here) between paying $199 and $0 for an OS with the capabilities of doing the same things, I'm going to choose the $0 option. If you choose to, and have the disposable cash to put out for windows and office, great. Enjoy. That doesn't mean the rest of the world has to follow your lead.
          • Good point

            Just because they're stupid enough to pay $200-300 for an OS doesn't mean everybody else out there has to.
          • Grandma with Linux

            Please, please show me the Granny with Linux - or should we take "or whatever" literally. After being in the PC biz since it's inception I'm still waiting to come across an actual production Linux machine. I'm not saying there not out there - just how rare they are compared to Windows.
          • Well...

            My grandmom loves Linux as do many of my clients, both business ad personal(some in their golden years). Maybe if you supported it or gave your clients the choice, you would see more of it. I also donate older computers I have rebuilt to the poor and needy, and they run Linux as well. In this economy, it makes sense. It's cheaper for my clients, just as easy to use as windows, and just as functional.
        • neutral opinion

          IMO, there is a need for both linux and non-free OS's like Windows.

          And developers for all of them deserve congratulation. (More so for linux developers, because their work is more like a public service.)

          As for MSFT, it has my respect & thanks, but since you have billions$ & charge billions$, you have less excuse for mistakes. And you should learn to accept harsher criticism, because dudes, people pay a lot more for your stuff, and they rightly hold you to a much higher standard of excellence and responsibility.

          And MSFT obviously needs to look at their products & business processes more objectively -- in order to make them better. It's great that you are enthusiastic about what you do, but you have to _carefully & wisely_ care about users & the user experience along the same lines that Apple does. Learn from Apple instead of just trying to catch up and imitate the next trend, please.