I could, I suppose, call myself a prophet for being co-author of a science fiction novel that, in passing, mentioned Bill Gates as devoting the final portion of his life to philanthropy. The initial draft, for example, was actually written before Gates and his wife started that foundation with which to hand out most of their vast horde of cash, with the help of Warren Buffett and U2 lead singer, Bono.
With far less fanfare than you might expect, Gates last year announced he was stepping away from his day job at Microsoft, and he is now off to deal with other, more charitable concerns. He’ll still maintain a presence at Microsoft, but how long that’ll last is anyone’s guess.
Forgetting the myriad reasons why he took this move — and you might as well disbelieve whatever he said publicly about it — it couldn’t come at a better time. Microsoft these days is as susceptible to the beleaguered label as Apple was only a few years ago.
All right, there’s no immediate threat that Microsoft is going to go out of business in a rush, crashing to the ground in the fashion of Enron several years ago. In fact, there have been few, if any, hints that Microsoft is pulling fast ones on the S.E.C. with their financial statements.
Instead, Microsoft is spending billions paying off lawsuits and funding failing products. In the former case, their inability to overturn that European Union antitrust decision must have come as a huge blow, although I would think their legal counsel was smart enough to realize that the appeal wouldn’t pass muster.
The action by the EU stands in stark contrast to the U.S. Department of Justice and the American court system that genuflected meekly and removed most of the teeth from their original antitrust decision. In case you forgot, that decision recommended splitting up Microsoft. I’ll withhold comment on how that played with the administration that took over, since that would push us too far into the political arena.
However, it’s not just the legal obstacles and the costs of selling the Xbox and Zune at a loss. That’s chump change for a company the size of Microsoft.
Instead, it’s the fact that this 800-pound gorilla has become old and flabby and doesn’t have near the clout it used to. Let’s forget for the moment all the insidious marketing games it played to attain dominance of the PC industry. In this universe, that’s probably regarded by many MBA candidates as just smart business, and no doubt millions of businesspeople would just love to be able to imitate even a small part of Microsoft’s success.
Where Microsoft has trouble is that it is not taken as seriously as it used to be, and that can have dire consequences. In the old days, if they announced a new product initiative, it would be shouted from the rooftops in the tech media. These days, there will be headlines, and maybe some Microsoft synchophants will continue to tout the company’s superior innovation. But that usually all goes away when the product never appears, or appears in in a form that doesn’t quite match the original promise.
At one time, Microsoft’s OEM hardware partners were almost scared to death to upset the company, lest they lose their special pricing deals and other financial incentives. However, these days, some PC makers are offering Windows XP for those who, for one reason or another, don’t want Vista. Dell is even offering some models equipped with Linux.
It’s not that these things didn’t happen in the past, but these actions are far more overt these days, with nary a whisper from Microsoft. Of course, Microsoft makes a profit regardless of which operating system you buy, so long as it’s Windows.
But the biggest problem facing the company is their inability to spin on a dime. It took more than five years to move from Windows XP to Vista, with significant missteps along the way. At the end of the day, the response has been relatively tepid. Unlike the days of Windows 95, when customers were lining up around the block to get a copy, the introduction of Vista was surprisingly low-key. You’d think, after spending so many years and billions of dollars on its development, Microsoft would be proud of its new operating system.
Instead, you get lame corporate spin over the alleged stellar reception of Vista. At the same time, tech pundits who used to praise Microsoft to the skies call Vista a slug.
This doesn’t mean that Microsoft can’t overcome its problems, such as severely bloated and buggy software, and endless development cycles. Perhaps the company’s new leadership will be able to steer their overwhelming corporate bureaucracy into a new direction where innovation really occurs.
Yes, Microsoft has a plate filled to overflowing. Maybe it was a good time for Gates to get out of the rat race and have a life.
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