Microsoft Live

When you consider how large and successful Microsoft has become, I’m somewhat dazzled how much trouble they’ve had getting into the Web 2.0 scene. I’m sure Microsoft doesn’t enjoy playing second fiddle to Google, Yahoo, and other Johnny-Come-Latelys. I suspect leadership is working to address online-presence deficit and imagine internal emails flying around: future of our company is at stake!  What I find really interesting is how Microsoft reacts to this, and their attempts at growing online presence.

Side note: In 1995 Microsoft started focusing on the Internet, with Bill Gates’ famous May 26, 1995 Internet Tidal Wave memo, directing executive staff to attack cyberspace and for “…every product plan to try and go overboard on Internet features.”  In this memo he also said: “Now I assign the Internet the highest level of importance”.

The past decade, Microsoft has struggled to leverage desktop market share into the online world, and they’ve had mixed results. Microsoft’s large marketing and distribution arms aren’t fully applicable to online. That critical mass in desktop-software aspects, isn’t easily transferable verbatim into Web 2.0.

One crux of the issue: Microsoft was built on a software sell/license mentality: sell software units (100 here, 1000 there), divide into different segments (Office, Windows, etc), and business segments complete for market share. The result: more money allocated to the more successful segments for Going on twenty years, Microsoft has become a clear expert in developing desktop (non-online) software.

But its a deliberate decision: Is my company a services-company, or software-company? A software-company may generate revenue through selling software units… after a while, you don’t generate revenue from  existing product until you ship a new version (Windows 2000, XP, Vista, etc). This drives: planning, marketing, distribution (Best Buy shelf space), development (C++, VB, .NET, etc), leadership, etc. This drives your company top-to-bottom, from your Steve Ballmer to your Joe Coder.

A software-company can profit by charging for services, but to me, that seems different from building software-as-service company, such as Google. If a company wants to be service-based, then the core revenue model becomes: how much service can I sell, lease, or rent on a monthly basis (which is drastically different from: how many copies of this version of my program can I sell). The longer your software-company has been around… the more software-company infrastructure you have. It can be deadweight when trying to swim in the cool, new, and profitable online-services swimming pool.

I believe before Microsoft can establish a significant online presence, culture and business-model changes may be needed. Such as a Microsoft subsidiary operating completely independently from Microsoft (Skunk Works) and a ground-up online service-company. Otherwise mitosis may be the next best option: divide Microsoft into two separate companies: software-company Microsoft and services-company iMicrosoft. (I think mitosis scenario is about as likely as everyone in the U.S. winning the lottery).

Instead of Skunk Works, or mitosis, Microsoft has chosen: Microsoft Live division. This division is dedicated to the online world, but ends up competing with all Microsoft software-centric divisions. And, from the Microsoft news I’ve read, there’s been an amount of executive turnover in this division. I wonder, if one promising executive after another was wrung-out trying to run a service-company, within a software-company.

On several occasions, Microsoft ventured to buy online market share. Just recently, MSFT submitted a $44.6 billion dollar bid to buy Yahoo. While the results are unknown, I could see Yahoo wanting a lot more money. And, if the sale did go through, I’d hope that MSFT keeps the two companies 99% separate (i.e. Skunk Works) – they could share some branding and technology transfer, but I think pushing Yahoo and Microsoft into one company could result in operation square-peg-in-round-hole.

Since Buying an online presence hasn’t yet yielded Microsoft a major piece of the internet pie. Building is the next best thing. Case in point: Microsoft Office Live, an effort to build a firm foothold in the online world. Simply put, this is an online version of Microsoft Office.

I haven’t had time/incentive to check out Microsoft Office Live. If you have, please drop me a comment and tell me what you think. Personally, I like using the desktop version of Office. I don’t need, nor want, to do that work online – In fact, I don’t see clear benefits to online-izing Microsoft Word. There are plenty of sites doing truly new and innovative things in the online world. Maybe one day Word Processing may go predominantly online. Until then, I’d rather use my traditional desktop version of Microsoft Word (I like the idea of Abiword and Open Office, but I never made the transition)

Since this post is a bit dry (boring), here’s a Microsoft advertisement I just received for Microsoft Office Live. This ad really makes me wonder if Microsoft Office Live is desperately struggling to get people to use Office Live. Maybe I got this impression when the ad called me “chicken” for not trying it. Hey, are we in third grade? Well I double-dog-dare you to make Vista faster and more reliable. OK, I TRIPLE-DOG-DARE YOU!

You calling me Chicken?


About dataland

Like many others, I'd like to improve the world but I'm currently caught up in day-to-day work. In the meantime, I'm a software developer who is very much focused on the end user.
This entry was posted in Google, Microsoft, Software Development, Technology and tagged , , . Bookmark the permalink.

3 Responses to Microsoft Live

  1. Pingback: Microsoft Fined $1.35 billion « Dataland

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