This discussion needs breaking up so this post sets the scene.
Paul Graham’s post Microsoft is Dead garnered polarised reactions. In short, Paul’s argument is that on-premise applications will/are being ousted by software services, saas, webware – whatever you want to call it noting that none of his portfolio companies are even considering Microsoft technology s the basis for their innovations. Microsoft is, therefore irrelevant, ergo it is dead. Extending the argument to IBM, SAP and Oracle Vinnie Mirchandani notes:
Half the readers will say that Microsoft is MISO are still an enormously profitable companyies, and that I should be more careful about drawing conclusions based on what a few people think in our insular little “Web 2.0 (SaaS, Open Source, BP)” bubble. The other half, the younger half, will complain that this is old news.
Jason Wood’s Bored to tears over the Microsoft groupthink takes the rational investor’s view:
Listen folks, I understand that Paul Graham is a super smart individual and he was trying to make a point with his missive. But what did he tell us that isn’t already considered the status quo? Is there anyone with even a passing interest in the technology market that doesn’t recognize Microsoft’s challenges?
SAP’s Charles Zedlewski takes the bigco position with his thoughts that:
Microsoft does not strike fear in the hearts of startups they way it once did. And there’s a significant chance that Windows goes the way of IBM’s Z series – a huge cash machine that doesn’t bother anybody except the customers who have to pay the bill. So Microsoft can be alive, but not very relevant. If SAP did nothing but add features to R3, we’d be in a similar boat…The point being Paul is willfully blind to history and he is definitely tempting fate, which most people would say is a bad idea.
Enter Microsoft’s Don Dodge and his The softwareless software company post. His thesis is simple:
- We get that services will replace software but you know what? It’s gonna be at a pace WE dictate
- Can you see how enormous we are? $50 billion in revenues, $19 billion in operating cashflow and no sign of it slowing down. Wanna bet against that?
- We have thousands of people innovating like crazy – we are huge.
- We’ll have huge massive data centers that will straddle the earth.
All these points of view are valid and contain grains of truth. But it should be clear from the views expressed by these well respected people that we’re talking about products, services, power and position. None of them addresses the key argument and what I see as the real driver for this debate which is about cultural change. I’d argue the only two people who are dipping their toes in the water and moving in vaguely the right direction are Hugh MacLeod and Eddie Herrmann. And they’re not engaging in this discussion.
In his So why am I working for Microsoft, Hugh says:
Cultural Re-Invention is a subject very dear to my heart. It’s very hard to run a company once it gets big. The grim reality of managing the politics and keeping the shareholders happy takes over from the reasons why the company was founded in the first place: to make great stuff…Microsoft seemed to have reached a crossroads.
In a reference to SAPs response to issues around next generation enterprise systems, Eddie Herrmann says much the same thing though in my opinion he veers off too quickly down the tech road:
There is huge potential for our new “dawn of emergent collaboration”. So how do we apply these ground rules?
1. The first rule, starts here. SDN has already created a receptive culture for new practices. The trick now is to get our attitude to trickle into the workplace.
2. We now need to gather enough momentum, interest, and feedback to get SAP involved with #2 by providing us with an easily implemented and integrated Enterprise 2.0 solution for our existing systems/data.
3. Rule #3 has the same answer as #2, but it also falls onto the shoulders of individual companies to think differently and throw out old, rigid implementation processes.
4. As for #4, it will be up to our community, SAP, and you to really sell managers and leadership on the advantages of this type of new information sharing.
Each is implying that the way these behemoths retain/regain mindshare leadership against the Google and Salesfrce.com inspired shift in technology thinking is through bottom up cultural change. They both imply it is a necessary if not essential ingredient going forward. I agree. But with caveats.
Part 2 explains what I see as the central issue – cultural shift.
Technorati Tags: innovation, Microsoft, MISO, SAP
