FT.com
August 26, 2013 5:58 pm
By John Gapper
Individuals don’t buy the products, businesses do – company
doesn’t have flair for retail success
To: Microsoft’s new CEO
From: McBain & Booz Consulting Group
First, congratulations. Not only on taking the helm of one
of the world’s great companies but also on having the vision to pay us to give
you frank advice. Many executives don’t value pure strategy consulting these
days and demand hard results. You’re more far-sighted than that.
Talking of vision, that reminds us of what Louis Gerstner
said 20 years ago after taking over IBM, another technology company that had
lost its way and been overtaken by rivals. Microsoft had undermined IBM’s
mainframe computing business with the fast-growing, fashionable personal
computer. Funny how times change, isn’t it?
“The last thing IBM needs right now is a vision,” he told
the media three months after he arrived. Well, the absolute last thing
Microsoft needs is the last chief executive’s vision for it to create “a family
of devices and services for individuals and businesses.” You can forget your predecessor
Steve Ballmer’s ideas.
Who was he kidding, anyway? The only decent device Microsoft
ever created was the Xbox games console and that contributes a derisory amount
to the company’s profits. You could ditch it tomorrow and nobody would notice.
Come to think of it, that’s not a bad idea.
As for “individuals and businesses”, the phrase makes even
us laugh. Individuals don’t buy your products, businesses do. They come
preloaded on the PCs used by ever-fewer consumers, while companies pay for
licences and software that comprise almost all of your revenues. Yours is a
corporate enterprise that’s ashamed to admit it.
Remember the fiascos that pass for Microsoft consumer
products? Zune, the lame iPod killer? The Surface tablet (whoops, $900m written
off on a poor imitation of the iPad). We could go on, but it’s too painful.
Microsoft used to rely on individuals being forced into Windows because it was
what they used at work. That trick won’t work any more.
These days, it’s “bring your own device” to connect to the
corporate network and who brings Windows Phone? An eccentric – or a patriotic
Finn who carries a Nokia smartphone. It’s enough to drive any self-respecting
Microsoft executive mad, which could explain Windows 8.
Microsoft isn’t the only technology company suffering from
consumer empowerment. Look at BlackBerry, while you still can. It dismissed the
iPhone, just as your predecessor did, for not having a keyboard. It thought its
grip on businesses was too strong to be broken by a consumer fad. Bye-bye, BlackBerry.
That’s why many people called for a technology visionary to
lead Microsoft. Thankfully, the board was wise enough to ignore that and
appoint you instead – a solid operating executive with the skill to transform
the nuts and bolts of a good business, and revive its culture. Like Mr Gerstner
at IBM.
Lots of people criticise Mr Ballmer, and he was a bit of a
klutz as far as the consumer market went. But what’s happened to Microsoft over
the past 30 years? Has it gone up like a rocket and flamed out, like most technology
companies? Not only is it still around but it’s one of the biggest companies in
the US – as valuable as Google.
That’s because it is a very effective enterprise computing
group. The real threat to Microsoft was that open source software would undermine
Windows, but that didn’t happen. Its servers division – a boring, solid
performer that churns out cash, is prospering and Microsoft shows every sign of
adapting to the era of cloud computing.
Microsoft doesn’t have the instincts and flair of a consumer
company – its idea of consumer product development is to call in a bunch of
consultants (including us). But it is adept at working with businesses and
partnering with other technology companies, just as IBM does.
Yes, mobile is the future of computing and, no, you don’t
compete effectively with iOS and Android. But jousting at the latest technology
success story can be a waste of time and shareholders’ money. When Mr Gerstner
took the job, IBM was threatened by Hitachi, Fujitsu and Amdahl. Have you heard
of them lately?
You need to cure Microsoft’s dysfunctional culture, focus on
what it does best and bring back its self-belief that it’s one of the world’s
most effective companies. Build on its strengths and drop the pretence that it
can do everything.
john.gapper@ft.com
No comments:
Post a Comment