So regarding my interview with Adam Hartung.
The response to this article has been fantastic.
A lot of people have emailed me saying that they absolutely agree with almost everything he has to say. Some very prominent analyst who would shock you agree as well.
I wanted to address a couple of things. First , a lot of people said it was too long.
I respectfully disagree.
I think he had a lot of things to say that were fascinating and when I had the complete transcript in front of me, it became extremely important to lay it all out so that the context remained intact.
As an editor, It’s extremely tempting to nip and cut but that sometimes creates a contentious back and forth between you and the interview subject about being taken out of context. 99.9% of the interview was presented here and the only things missing were areas where the audio on the tape was bad or ambiguous.
Secondly, I have been asked to give my own opinion of Mr Hartung’s point of view. I will do that here.
I think that Mr. Hartung is taking a long term look at Microsoft, their current place in the Tech world and their current leadership. Based on what he sees, he is extrapolating about what the future might be.
In responding to that, it’s important to remember what Steve Ballmer said about Windows 8 ( Steve Ballmer said this ) – that Windows 8 would be the “Riskiest product bet by Microsoft”.
I think we have to take the CEO of a company seriously when he says something is risky.
That leads you down the path to ask – what was Steve Ballmer talking about in terms of risk and if this was the “riskiest”, then surely the stakes were high if this product didn’t perform or meet expectations?
When you look at it through that prism, Mr. Hartung’s analysis doesn’t sound crazy.
It sounds like in some ways, he is simply agreeing with Steve Ballmer about how high the stakes are for this next version of Windows.
Now, let’s look at a few things:
The amount of Start Menu replacement tools are disturbing
A lot of companies are spending precious time and resources to build software that brings back the Start Menu. That is disturbing because it indicates that a major UI decision about Windows 8 has simply not been pleasing to the market place.
Once again, this is economic analysis – in a capitalist society, companies will usually only invest in products that they see demand for.
Based on what Pokki are saying, that demand does exist and that is troubling. I have never seen a new product so aggressively “fixed” by other companies before – it’s bizarre.
Windows 8 Pricing
At $129 and $199, I expect stiff headwinds in this area. This has been discussed here before.
I do disagree with Mr. Hartung about Microsoft’s response to the cannibalization of the traditional PC by Tablets and mobile devices.
I think they are responding with the Surface tablets and Windows Phone 8. Time will tell if those efforts will ultimately yield fruit.
I think that Windows Phone 8 is a mixed bag and the Microsoft Surface is priced too aggressively. $1100 is a lot to ask for a 10 inch screen and way less than 500 GB of hard drive space.
Having said that, Microsoft have made an aggressive bet about the hybrid tablet strategy and we will see if it pays off – I for one would like it to.
Hard to argue here.
Microsoft’s long term strategy is all over the place. Windows Phone 7.5, 7.8, 8.0. Windows 8, Windows Blue. Sinofsky is gone and we are left to wonder who the cheerleader is for this software. Hard to make the case that it inspires the warm and fuzzies.
The Vision for the Enterprise
I think that a lot of companies are stuck with Microsoft for the long term simply because of inertia. It is a PAIN IN THE ASS to negotiate new contracts, new support agreements, new regression and QA testing as well as new enterprise training for your corporation.
Having negotiated some of those agreements in the past, I can tell you that it’s a lot easier to stay on Windows 7 than to start looking at some new OS vendor.
Even if you wanted to go to Linux or Apple or Android, really?
If you’re a small company, you could maybe make the case but for medium to larger companies, I still simply don’t see it. I hear all the rumors about Google Apps and iPads in the enterprise but ultimately, I still see Windows as king.
Anecdotes be damned, if you run a large company anywhere in the world, there is no other vendor that can give you as many options for running software as Microsoft. It may not be sexy but it’s the truth.
In addition, a lot of companies have legacy software products that simply will not work on anything other than Windows. We tend to forget that not all apps are HTML 5 and web enabled.
When you have massive interfaces and inter-dependencies between such systems, inertia seems really prudent.
Time to Market
Microsoft has been late. That is not up for dispute. Late to phones, late to music, to tablets etc etc Mr Hartung makes that point and he’s right. What we don’t know is whether they are too late.
Ultimately, even though he has a lot of compelling points, I feel that technology is too volatile to make such definitive statements.
- Apple was counted out by experts.
- Jeff Bezos has lost so much money on Amazon and he’s called a Genius.
- Salesforce.com started out as a joke.
- Linkedin used to be entertainment and now they are a credible business.
- PeopleSoft used to be the most stable ERP company on the planet – until they weren’t.
- Google are still the kings even though they could be replaced by a new sexy search engine at any time (hard to imagine? Remember when Yahoo was king?).
- RIM seemed like kings of the hill until they weren’t.
Using any of those examples, analysts could have written obituaries and with the exception of RIM and PeopleSoft, they would be wrong.
There are too many possibilities out there to count out Redmond.
Microsoft have a lot of options.
At any point, they can acquire Dell, Nokia, RIM or any other combination of companies that could lead to renewed and extended growth.
The worst case scenario in my opinion for Microsoft will be that they remain a distant second tier competitor like Bing is to Google.
I think ultimately, this year will be a year when Microsoft will have to shake up their leadership (how many times have we said that?). Steve Ballmer has done a mixed job there and just like Jay Leno, it may be time to exit stage left.
It may be time for new leadership at the top not because Mr. Ballmer isn’t competent – I actually believe he is, but sometimes it takes more than being competent.
Sometimes it takes being aggressively ahead of the curve.
At this point, everyone can agree that the company has not been a thought leader recently.
I don’t see Microsoft going anywhere any time soon but based on current leadership and the current technology landscape, a lot of people reasons to doubt their long term dominance.
What do you think?
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