Jonathan Steel's Blog: Is Microsoft growing up?

New COO is a step in the right direction...

New COO is a step in the right direction...

So the IT industry's Peter Pan is finally leaving Neverland for Wal-Street. The world's favourite (alleged) monopolist has hired Kevin Turner from Wal-Mart to be its new COO after three years without anybody in that position. You could see this as the culmination of several years of hiring outsiders - a lot of them from IBM as it happens - in an attempt to become more process-driven, more grown-up and more serious.

Microsoft has always been a brilliant mass marketer of 'good enough' software, which home and small business users get because A) there really isn't any alternative if you don't have any technical knowledge or requirement outside email and word processing, B) a lot of other companies like Intel benefited and reinforced the situation, and C) it comes on the PC you just bought.

But they've struggled for more than a decade to make equivalent inroads outside the PC market, largely because they have never really understood the corporate world - it's not in their DNA (which is exactly the same reason that most of the other industry giants don't understand the SME market). Buggy software, critical security flaws, lack of a credible high-volume 24/7 transaction environment or middleware, blah blah blah. Perm any number of reasons but it seemed that only Microsoft couldn't see what their problems were.

The company's long fight-back now seems to rest on a three-pronged strategy. First, hire the right people; they've always done this on the technical side, hiring all the famous industry figures they could lay their hands on - from the team that developed VMS (in the 80s) to acquiring Groove (Lotus Notes creator Ray Ozzie's company) earlier this year. But over the past couple of years that strategy has extended into other areas of the company, culminating in Kevin Turner's appearance (which I should say is a great move by the way), which is key to part two.

The second part of the strategy is to get some order into the company's traditionally free-thinking approach. This has also been happening at Cisco for the past two years, since they discovered that well-sorted business processes are more important than the technology you run them on. Hence the number of IBMers (and others) growing steadily all around Microsoft, and a more structured approach to everything from account management to expenses control.

The third part will be the hardest - producing and positioning products that will finally make the corporate world believe. This is the job primarily of Longhorn, and the surrounding marketing/messaging juggernaut - which already screwed up mightily by deciding to call the production version 'Vista'. Apart from not owning the trademark to that name - I wish I did, I'd already have ordered a private jet - the name is rubbish. Why not just call it Longhorn? And their marketing (messaging and brand positioning) outside the US has always been a bit shaky. But I digress.

Longhorn is, realistically, Microsoft's last throw of the dice in the corporate market. If it doesn't stack up to true corporate expectations, not least in security terms, I can't see them being able to take another mulligan.

The central question is whether it is too late, and whether the company is too de-focused. Microsoft is under more pressure and fighting on more fronts today than ever before. Linux and the open source movement, Sony et al in the gaming market, 'new' TV, mobile phones, a renewed IBM, an even more aggressive Oracle, the EU commissioners, the list goes on.

The next couple of years will be critical; Kevin Turner will need to restore some of Microsoft's focus and bring some strong leadership and understanding of serious business into the company's position in the corporate market. His track record would suggest that he's good enough - but will Peter Pan be mature enough to let him?