Microsoft’s Strategy


Businessweek has an article about a memo they obtained that discusses Microsoft's new strategy (click on the MS logo to view their new Windows Live Beta). The new strategy consists of launching tons of apps over the next few months that they hope will attract users in droves.

A slew of other features are on the way, the company says. "Over the next 3-6 months, we'll ship more innovative technology into the marketplace than during our entire 10-year history," writes Cole, who said in February he'll be taking a year's leave of absence starting in April.

How will all that innovation be delivered? Services will be introduced with what he calls a "rolling thunder" approach. "We'll release new services as they become available, upgrade existing services, and launch marketing efforts in global phases," the memo says.

Sounds sort of like the way Google does things, doesn't it? Microsoft no doubt sees Google as a threat, and they have a hell of a financial war chest to take into battle. The biggest difference I can see as an outside observer is that Microsoft seems much more concerned with the revenue generating potential of the applications they will be providing. I think that is a good move. Could Google's eventual downfall be that they provided too much for free?

  • It will be nice to see something new and innovative from Ms. They have definitely been resting on their laurels and letting Google and others pull ahead.

    I have three major questions.

    First: Can Microsoft innovate as well as Google, Yahoo and others?

    Secondly: Will Ms’s very preoccupation with revenue (a business asset in most cases) hinder their innovation? Google can slap something together, release it in beta and get customer feedback immediately.

    Additionally, I see some beginning rumblings from Ms staff. Salaries have been stagnant, their no longer leading tech-wise and Google is THE employer of choice for techies. Will we see a dilution of talent? Ultimately it comes down to attracting/retaining the best people and get the most out of them, and Ms seem to be losing their edge here.

  • My thoughts on those three questions (based on the research I did for my book “It’s Not the Big that Eat the Small, It’s the FAST that Eat the Slow”:

    1) The odds are stacked against any “big” company innovating and adapting. That’s one big reason they buy small companies. “Big is a bad bet like being overweight is a bad bet.”

    2a) Will preoccupation with revenue hinder innovation? Absolutely. Some of the history at Microsoft (I’ve got a great case example) illustrates why.

    2b) You write “Google can slap something together”… and get fast feedback. Not so fast. Google “could” do that but that’s in the past. To cut and paste the past on top of the future is another sucker’s bet. Organizations don’t move in a ballistic pattern. It’s more complex and dynamic. Remember “regression to the mean” affects organizations too.

    3) Talent dilution is a great point. Most big companies folow the “do this and you’ll get that” formula for incentives. Again a bad bet especially when stock options stop growing geometrically.

    There are fixes for big companies to stay fast but there is also a lot of momentum “against” the disciplines (and don’t forget the attack of the Cave people)

    But Google’s turn to face the music is coming. They’re showing signs too!

  • Great blog – I just found it today and I’ll definitely check back often.

    The big things that M has that Google and Yahoo! can’t touch is the dominant operating system and the dominant internet browser. Considering around 90% of people use Windows and IE, they will have an immense impact with their new OS and with IE7. If they can build Live and other new technologies into those two things they have a huge opportunity to take market share from G.

  • Laurence: Great answers, thank you.

    And depressing as this may be, I think you’re right: Google does seem to be showing some signs of loosing the edge.

    I keep hoping for one company somewhere to show that it needn’t be that way.

    Adam: The Operating System is beginning to matter less and less. I’m not sure businesses will automatically pick up Vista like they have all previous Windows versions.

    I talked to the IT architect of one of Denmarks largest organizations and he wasn’t sure they would go to Vista at all. And then there’s the news that IBM will go with Linux on the desktop. Plus of course online apps which require no particular OS.

    It seems even MS is wising up to this and are redefining their strategy to a world where the OS doesn’t matter.