As has been reported here and elsewhere, leaked Microsoft strategy memos from chairman Bill Gates and CTO Ray Ozzie have surfaced on the Web.
Entitled "The Internet Services Disruption: Ozzie's memo is by far the more strategically specific. I've read it a few times now. So let's go through it, shall we? First, his quote (indented) and then my take.
Ozzie says: "For all its tremendous innovation and its embracing of HTML and XML, Office is not yet the source of key web data formats – surely not to the level of PDF."
Ozzie means: Microsoft needs to find a way to embed open readability in documents to slowly make PDF irrelevant.
Ozzie says: "We knew search would be important, but through Google’s focus they’ve gained a tremendously strong position."
Ozzie means: Sure, we've tried to do search, but we were a bit slow in starting, and haven't devoted the laser-like concentration to mastering search that Google has.
Ozzie says: "While we’ve led with great capabilities in Messenger & Communicator, it was Skype, not us, who made VoIP broadly popular and created a new category."
Ozzie means: If only we expanded MSN Messenger by enhancing its voice capabilities earlier and building a PC to PSTN app within Messenger, we could have been a contenda. But it is not too late to start.
Ozzie says: "We have long understood the importance of mobile messaging scenarios and have made significant investment in device software, yet only now are we surpassing the Blackberry."
Ozzie means: BlackBerry has been entwined with the enterprise, but with push email coming to our Windows Mobile 5.0, we are finally gaining market advantage.
Ozzie says: "a set of very strong and determined competitors is laser-focused on internet services and service-enabled software. Google is obviously the most visible here, although given the hype level it is difficult to ascertain which of their myriad initiatives are simply adjuncts intended to drive scale for their advertising business, or which might ultimately grow to substantively challenge our offerings."
Ozzie means: We're watching Google closely to see if they are doing all this stuff just to enhance AdWords and AdSense, or whether they hope to build an Internet services platform (perhaps an ASP model) that will fundamentally compete with Office 12 and other meal tickets of ours. And if they do, watch out, Googler-s: we're comin' atcha.
Ozzie says: "Although Yahoo also has significant communications assets that combine software and services, they are more of a media company and – with the notable exception of their advertising platform – they seem to be utilizing their platform capabilities largely as an internal asset."
Ozzie means: Yahoo! isn't as big a threat to us. They are a media company and we're not. Maybe if they play right and don't hit the services angle too hard, we might be able to partner with them on some things. But we're watching them just the same.
Ozzie says: "The same is true of Apple, which has done an enviable job integrating hardware, software and services into a seamless experience with dotMac, iPod and iTunes, but seems less focused on enabling developers to build substantial products and businesses."
Ozzie means: Apple is not that big a direct threat. Partnerships are not entirely out of the question.
Ozzie says: "Flickr and others have done innovative work around community sharing and tagging based on simple data formats and metadata."
Ozzie means: why didn't we think of that first?
Ozzie says: "GoToMyPC and GoToMeeting are very popular low-end solutions to remote PC access and online meetings."
Ozzie means: Some people will see GoToMeeting as a direct competitor to NetMeeting, but we can always position NetMeeting (due to expire in Vista) and Office Live Communicator as more robust alternatives.
Ozzie says: "VoIP seems on the verge of exploding – not just in Skype, but also as indicated by things such as the Asterisk soft-PBX."
Ozzie means: If we are going to be a major player in VoIP- and we have to be- then we really, really need to work closer with third-party VoIP application developers to build new platforms and apps for those platforms.
Ozzie says: "How can XBox Live benefit from interconnection with other services assets, such as PC-based and mobile-based IM and VoIP? How might both the PC and XBox mutually benefit from a common marketplace? Might PC users act as spectators/participants in XBox games, and vice-versa?"
Ozzie means: Messenger and VoIP voice functionality should be built into PC and mobile-device-based versions of XBox Live. This would enable live IM and voice conversations between players as they rage against the machine (and each other).
Ozzie says: "How might unmediated connection to a rich services infrastructure transform mobile phones into a mass market messaging, media and commerce phenomenon?"
Ozzie means: Let's try to act as an ecommerce and subscription-based media access intermediary on this new generation of 3G wireless phones.
OK, readers, that's my take. Which of Ozzie's pronouncements jump out at you?