About a week ago, my insightful colleague Paul McDougall wrote a thoughtful analysis of Microsoft under the headline 7 Things Microsoft Must Do. It's a great piece spanning the enormous spectrum of Microsoft's business—from Xbox to data centers—and I heartily encourage you to take a look. But to recapture the die-hard conviction of and connections with enterprise-focused global CIOs, Microsoft needs to do even more than what Paul recommended, so as a followup to Paul's analysis here's my list of 5 More Things Microsoft Must Do.
Today's piece picks up on a thread I started several weeks ago called Steve Jobs Is Bugs Bunny But Microsoft Is Elmer Fudd contrasting Apple's aggressive and bold devotion to creating truly breakthrough products versus Microsoft's apparent willingness to plod along at three-quarter's pace, contentedly following others' leads in search, mobile, cloud computing, and most importantly a willingness to deconstruct what it has been so that it can assertively rebuild itself to deliver what the new market is demanding.
Let me set the stage by listing Paul McDougall's original "7 Things Microsoft Must Do," along with a brief excerpt from each:
1) Cut Windows Prices. ". . . To stay competitive, Microsoft needs to slash Windows prices by 50% or more, or the market will continue to move toward alternative operating systems. . . . "
2) Forget Willy, Free Office ". . . Microsoft must also trim pricing on the enterprise editions of Office and Exchange Server, as, again, rivals like Google are moving in with cloud-based products that are fully functional but much cheaper. Want proof? . . ."
3) Go Deeper Into Services "Yet 2010 must be the year the company puts its $37 billion cash reserve to work in aid of becoming a larger participant. Buyout candidates include . . . ."
4) Ditch The Zune ". . . Despite a bevy of promotional and marketing efforts -- such as custom designs and an HD unit that shipped in August -- Microsoft continues to play the role of also-ran in the MP3 market and that's not going to change, ever. . . ."
5) Buy Yahoo ". . . Yahoo is still the leading Web portal and is the richest site for general interest content on the 'Net. . . ."
6) Shore Up The Executive Suite ". . . It's a critical time, as Microsoft needs to adroitly navigate profound market changes, none more significant than the industry's shift to cloud computing. . . ."
7) Launch A Game-Changer ". . . Why let Steve Jobs have all the fun? . . . "
Some great points in there, and to me, the key word for Microsoft is "great": when did a Microsoft product or innovation take your breath away, or make you say to yourself, "Holy crap—Microsoft's turned that whole business on its ear! There's no way in the world that BrandX can keep up with that."
Microsoft needs to look a few years into the future and identify some essential product types and services it thinks will be absolutely essential, and then commit itself unconditionally to becoming the dominant player in that or those fields. Windows 7, desktop apps, vanilla databases, and a hodgepodge of enterprise apps that most people don't even know exist are simply not going to be compelling and valuable enough to keep Microsoft a top-tier IT powerhouse.
CIOs this year and next are not looking for the same old stuff with slightly lower prices and some new packaging—quite the opposite. They are looking for IT suppliers whose ideas and vision are at least as good as their current products, who are forcing customers to stretch their thinking about what's next, and who are delivering the goods that will help CIOs break out of the 80/20 trap, discover if cloud computing is real or nonsense, turn IT from a slow-moving and reactive service unit into a true center of market-focused value, and enable those companies to more more rapidly and with more confidence and with more impact than ever before.
And I believe this list of 5 More Things Microsoft Must Do points in the direction the company must go: