Services Disruption: Microsoft’s Chief Technical Officer, Ray Ozzie, recently sent a memo to Microsoft’s Executive Staff and his direct reports. Dave Winer has published this memo on his blog. It is a good read on where Microsoft has been and where they are going.
I liked Ozzie’s analysis of the competive landscape at present:
“And while we continue to make good progress on these many fronts, a set of very strong and determined competitors is laser-focused on internet services and service-enabled software. Google is obviously the most visible here, although given the hype level it is difficult to ascertain which of their myriad initiatives are simply adjuncts intended to drive scale for their advertising business, or which might ultimately grow to substantively challenge our offerings. Although Yahoo also has significant communications assets that combine software and services, they are more of a media company and – with the notable exception of their advertising platform – they seem to be utilizing their platform capabilities largely as an internal asset. The same is true of Apple, which has done an enviable job integrating hardware, software and services into a seamless experience with dotMac, iPod and iTunes, but seems less focused on enabling developers to build substantial products and businesses.
Even beyond our large competitors, tremendous software-and-services activity is occurring within startups and at the grassroots level. Only a few years ago I’d have pointed to the Weblog and the Wiki as significant emerging trends; by now they’re mainstream and have moved into the enterprise. Flickr and others have done innovative work around community sharing and tagging based on simple data formats and metadata. GoToMyPC and GoToMeeting are very popular low-end solutions to remote PC access and online meetings. A number of startups have built interesting solutions for cross-device file and remote media access. VoIP seems on the verge of exploding – not just in Skype, but also as indicated by things such as the Asterisk soft-PBX. Innovations abound from small developers – from RAD frameworks to lightweight project management services and solutions.”
Gartenberg offers his analysis of the memo: “Interesting reading but no real surprises here. In fact, to some extent we’ve seen it before. Gates more than anyone understands the importance of being proactive and not reactive. He understands that while these new service offerings aren’t a direct threat today, they well could be over time. The key is to leverage the strength of the core Windows and Office platforms and use that as base to extend into these new areas. Microsoft has proven that it can withstand a sea change as great as the original Internet tidal wave, this is a further extenstion of that philosophy and always keeping an eyes on what forces of the market can potentially disrupt their business.”