davidbau.com

Vista and the Altair

In the midst of the biggest train wreck in PC business history (maybe even bigger than the disastrous OS/2 collaboration...), I have been thinking about my prior employer: what they have done wrong, what they could do differently.

My conclusion: Microsoft has lost its way. But not recently. It lost its way back in 1995 or so, when it started to think of itself primarily in terms of its thriving finances, and when it began to define itself above all as a permanent "growth" company.

It lost its way when it forgot its original mission, its corporate DNA.

Is Sinofsky going to save them? I do not think so. But I think Microsoft can find its way again if it scares up the courage return to its roots and take charge of its own mission again. My thoughts below....

Messy Code is a Symptom not a Cause

In the wake of the latest Vista delay it is interesting to read the Mini blog and hear engineers say (when they're done ranting about their managers) they wish they could "throw out everything and start again." But being focused on some messy code (or ineffective managers) is like seeing some fallen trees and missing the fact that the whole forest has been on fire for some time.

When you are energized, you will fix, work around, or remove bad code. And when you are on a roll, do you listen to your manager? No, there is a bigger issue. What is really going on?

The problem: Microsoft does not understand itself. It continues to choose the wrong mission for itself. Even to the extent that the executives are driving any coherent strategy, the company strategy is wrong, and has been wrong since 1995.

The company has been spending too much time listening to outsiders and not enough time understanding itself. Microsoft's strategy does not fit with its own people.

Enslavement to the Quarter

The only comprehensible vision I can really see at Microsoft today is a complete and utter enslavement to their 10-Qs. It may seem strange for a company with tens of billions in the bank and the strongest bottom line in the industry to be worred about its financial health. But financial myopia is a sickness that can afflict even the wealthiest. The true mission driving the company in 2006?

"Seek out revenue growth wherever we can find it."

Why is revenue growth such an imperative? Because with 95% PC market share and global saturation of the desktop business, there doesn't seem to be any more than a few drops of money to squeeze out of that tired old lemon called the PC industry. Yet Microsoft has been growing for so long that it has fooled itself into thinking that "growth" is its main mission, and so the company is on the hunt for more profits.

To the extent that the company can't find organic growth, they must cut costs and increase prices - and everybody knows neither of those things is terribly fun. So the strategic mission at Microsoft is to find a fresh source of high-margin high-growth sustainance like the PC-software-business-of-old. Find money anywhere! At any cost.

But "seek out revenue" is not an inspiring mission for a company who has hired 20,000 engineers who dream of changing the world.

Programmers just don't think in terms of dollars.

Alright, maybe that's not totally true - but programmers who do think in terms of dollars tend to go work for DE Shaw or some investment bank where they get to deal with money directly. And I think that's the key. Programmers go to companies based on the kinds of problems that inspire them. Microsoft attracts, retains, and nurtures a certain kind of programmer, a person who is inspired by a particular vision of the world.

What motivates a Microsoft engineer?

Give me an S-Q-L, Give me an M-S-N, Rah Rah!

Somehow management at Microsoft has fooled itself into thinking that they can work backwards from rich sources of revenue to ways of motivating its people.

For example one day management woke up and noticed that IBM and Oracle were making quite a bit of money on databases. What to do? Learn something about relational databases and get a team to work on SQL Server. Netscape went public and in a fit of insanity Wall Street drew big neon lights to money in the internet sector. Ok, survey says? Build a web browser too. And recently they have noticed that Google is making money on search. So what now? Learn a little about information retrieval and chase the dollars with MSN Search.

It's all just software, right? So naturally it should be easy to find ways of getting all those software people to work on databases or browsers or websearch or whatever is needed to follow up on Today's Big Strategy. And if motivation is a problem Microsoft can always hire a few VPs to figure out how to get people psyched up.

What to do if the team slows down? Put Steve on stage, have him jump around a bit. Hand out some lucite trophies, lead some cheers. Rah rah rah, software is a football game. Have no fear! We will win! We're the biggest and the baddest, so go in there and kill'em!

But we're talking a bunch of geeks here. That sort of thing doesn't really work.

Microsoft's DNA

At its heart, Microsoft is not really about chasing revenue. And despite investors' deepest wishes, Microsoft is not really about growth. Microsoft does have a very distinctive culture, but it seems to have long forgotten what it is. Yet still after more than three decades it is still there, unchanging, and it is something that can't be altered.

In 2006, Microsoft is still the company that, in 1975, dreamed about one very big thing:

A computer in every home.

When Bill and Paul hacked away at the first Altair, they weren't motivated by the idea of sending their computer into space or into corporations or onto aircraft carriers or making a big artificial intelligence. I guarantee what psyched them up most was the idea of getting things to the point where you could bring it home, plug it in on the dining room table, and play an adventure game on it.

The home computer. The personal computer. That's Microsoft's DNA. That lifeblood from 1975 still courses through the veins of the entire company. Even as the company tries to bolt on extra body parts to continue to increase its bottom line, Microsoft is still that old Altair company at its core.

Microsoft Keeps Wandering Home

There is ample evidence that original vision is the only thing that gets Microsoft really fired up.

For example, take a look at what the Microsoft VPs come up with when given the charter of working on something decidedly non-Altair like, such as SQL or the Internet or MSN Search:

Internet: NCSA TCP HThuh? Boring... But hey a browser would be cool as the Windows 98 shell!

Databases: Relational ACIDwhat? Yawn. Oh, but imagine if we use it for the Longhorn filesystem!

Search: Indexing, crawlingzzz. Not even a desktop app. Hey, now that's an idea!

Make a list of Microsoft's bizarre technology failures, and you will find a pattern.

Whenever faced with a team who can't get itself motivated to win a software battle that lies outside the home, what does Microsoft do? Instinctively, like a noncognitive animal (and like all large coporations), Microsoft keeps returning to its roots, guided by its genetics, trying to find its way home, cramming its technology into the old trusty Altair. "Integrated Innovation."

Microsoft sees all software in terms of its impact on the dining room table.

The Real Microsoft

Is the real Microsoft still around today? Oh sure.

The true Microsoft was in danger of vanishing after the 1995 Netscape IPO spun everybody's head around with thoughts of equity market dollars. But in 1999, old TCP engineer and rising star J Allard left IIS and the whole Internet thing to revive the old Microsoft again.

Maybe J understood the truth about Microsoft. The company is not about growth, or the enterprise, or "information at your fingertips." The true Microsoft is about setting up a cool box of technology in your house to show off to your buddies. In 1975, it was about the Altair; later the Apple II, TRS-80, Atari 800, Commodore 64; then the Macintosh; and then for a very very long time the IBM PC and its clones.

In 2006, we call it the Xbox.

In the Zone, Leave me Alone

I find one distinctive trait of the Xbox team very interesting. While all the other divisions at Microsoft have the instinct of "running home to mother" - that is, integrating their software with the old Windows business, everybody at Xbox has the opposite instinct.

Sure, the Xbox team does look to the rest of Microsoft as a resource. But not as a safety net or distribution channel or integration point or source of vision. The Xbox team goes around the company stealing the best code and best people and best ideas. They bring these treasures back to their own private campus to use for their own projects. And then they close their doors and tell the rest of the company, "now leave us alone."

Why? Because Xbox is the only division at the company that is capable of motivating itself for the long haul.

And why is that? Because Xbox is the only division of the company that is still working on the Altair vision: a computer in every home.

Got a computer in your home already, you say? That's not enough. That old PC is not a a computer you'd whip out on the dining room table. You need an Xbox in every home too. More computers in every home. More, more, more. More of something different. More of the same.

The Right Haiku for Microsoft

Computers in the home. That's what Microsoft is all about, and that is what their corporate vision should be.

Notice that when Vista stumbles, the engineers at Microsoft instinctively don't look to Google or Yahoo or RIMM or Palm or Pixar or Amazon or whoever to say "why can't we be more like them!" They look at Apple. They look at Xbox.

Apple and Xbox are delivering on the vision that everybody at Microsoft wants to work on. While most of Microsoft is stumbling to try to integrate new sources of revenue into the lumbering Windows operating system, Apple and Xbox are making their customers happy, making their partners happy, making their employees happy.

How? By playing Microsoft's original game, just a bit evolved for 2006.

A computer in every home
on every desk
in every room
for every person
for every moment.
Personal computers everywhere.

Sure, in 2006 they might start to look like a TV or a game machine or something. Make no mistake. Those devices are all Altairs. Computers in the home.

A Computer for Every Moment

All the industry pundits are wringing their hands about the death of growth in the PC industry, and they have scared Microsoft off to try to look for money in different corners of the world.

But what is missing, and what is needed, is a real vision. Microsoft needs to be bold. The company needs to believe in something that nobody else believes. It needs to believe that there are not enough personal computers in the world. By Personal Computers I don't mean PC clones that you can get from Dell and Gateway today. I mean computers for every person, for every moment.

Microsoft needs to tell everybody: there are not nearly enough computers in every home.

It seems pretty clear that Apple still believes in this vision. Apple is well on its way to delivering more "Personal Computer Television Moments" in every home. It seems pretty clear that the Xbox team still believes in this vision. It is well on its way to delivering more "Personal Computer Game Playing Moments" in every home.

Meanwhile, we have to ask: what is Vista for?

The right path for Microsoft is not too hard to figure out. But there is one hard part: the path cannot be found by just chasing the money.

Microsoft needs to rethink.

Posted by David at March 25, 2006 07:31 PM