Steve Ballmer's impending exit as Microsoft CEO creates a fantastic opportunity for his company to transform itself. Say goodbye to the stodgy establishment figure desperate to remain relevant; welcome a vibrant enterprise headed for the technological frontier! (Or, at least, a maker of things people actually want.) Simple, right?
Of course, just because it's simple doesn't mean it will be easy. Reinvention involves risk, and course-correcting requires humility—which does not come easily to anyone associated with Microsoft. But inflection points like this for big tech companies are few and far between, and Microsoft shouldn't waste this one. Here's what Microsoft should, and shouldn't, do if it wants to stand any chance of getting its mojo back.
DO Remember Your Users
See also: After Ballmer: One Microsoft Or Many?
For the past several years, the Xbox gaming console has stood as a successful, dynamic counterpoint to the dead hand of Microsoft's Windows and Office legacy. The only problem is, the company is still spinning its way out of a self-created quagmire with its latest incarnation, the Xbox One.
This console focused too heavily on streaming and other services at the expense of delivering value for its target audience of gamers. The company has since rethought its strategy and reversed game-lending restrictions, constant check-ins and region locks, but it was still a major misstep.
We'll have to see how it all plays out in the market, but so far the buzz on the Xbox One remains fairly dismal, all because Microsoft huffed its own vapors a little too much and lost sight of the features its core user base considered important. Microsoft can't let this happen again.
DON'T Pull Any More Ballmers
Whatever his merits, Steve Ballmer will always be remembered for his knack of getting important technology trends spectacularly wrong. Whether he meant them or not—and there's certainly a case to be made that he repeated some of these lines solely in hopes of stirring up FUD for Microsoft competitors—it's still hard to believe he could utter any of these lines with a straight face. To wit:
- "Linux is a cancer that attaches itself in an intellectual property sense to everything it touches."
- "Google’s not a real company. It’s a house of cards."
- "There’s no chance that the iPhone is going to get any significant market share. No chance."
In the soon-to-be-former-exec's honor, let's agree to call statements like these "Ballmers." To pull a Ballmer, then is to make an observation so astonishing that it takes your audience's breath away, leaving most uncertain if you're lying or just stupid.
So, whoever ends up leading Microsoft's recovery: Tell it to the world straight. Don't pull any more Ballmers.
DO think like a startup
Microsoft is a large corporation, so it could make sense to split up the company to make it a leaner, more nimble operation. But there are other ways to invoke the creativity and energy of a nascent business.
Google employees devote 20% of their working hours on side projects. Apple executives are known for being extremely hands-on with software and hardware development and design. Microsoft would do well to cut through layers of bureaucracy wherever it can, and stay focused on innovating and differentiating.
DON'T bury your head in the sand
In many consumers' minds, Microsoft is synonymous with Windows. And although it's unquestionably a success—according to NetMarketShare, the various versions account for more than half of the desktop operating system market—PCs are dying.
Too bad the company hit the snooze button on mobile. What's even worse is that it actually had a leg up on the market before Apple or Google, thanks to Windows Mobile. But that branch of the company was largely ignored and then forgotten. Ballmer even scoffed at the Apple iPhone when it released in 2007.
Learning lesson: Stifle Microsoft's knee-jerk reaction to dismiss and deny emerging technologies.
DO court developers
By the time Microsoft caught onto mobile in 2010, it was too little, too late. I'm referring to the odd little social-oriented smartphone, the Microsoft Kin, which briefly blipped in and right back out of the market. It was followed by Windows Phone 7, but that went by the wayside too, in favor of Windows Phone 8.
Now Windows Phone 8 is finally starting to show some signs of life. But its rise to prominence is more like a limping walk. A big part of that has to do with apps. Had the company stuck to one mobile platform, Microsoft's app store might not be so sparse today.
Ballmer made a big deal about how the company was courting developers at the Windows Phone 8 launch last year. This summer, he even claimed the store has 160,000 entries, which sounds like a lot—but it's puny compared to Google Play and the Apple App Store, which each feature a million apps or so.
You could argue that Microsoft did what it could, from throwing cash incentives at developers to slashing the annual registration fee for WinPho devs, from $99 to $19. But what it needed to do was convince them that they'd stay profitable on this platform.
DON'T confuse the public
The Surface tablets are a case study on how disaster ensues when you confuse consumers.
Microsoft unveiled two different tablets with similar names—the Surface RT and the more powerful, laptop-worthy Surface Pro—with two different, similarly named Windows OSes, Windows 8 RT and Windows 8. Unfortunately, mainstream shoppers didn't understand the difference.
Samsung may be able to get away with a "pray and spray" approach to launching a vast array of different devices, but it's important to note that it only employs that strategy once it had bona fide hits on its hands. In the case of its Galaxy and Note lines, people latched onto one phone or tablet, and once they understood what that was, other versions followed.
The Microsoft Surface RT may be a casualty of poor planning here. Had it stood alone—and sold for an affordable price—it could have paved the way for the Surface Pro. Now, it's just an almost-billion-dollar footnote in the annals of Microsoft tech fails.
That may be a blessing in disguise. Microsoft can now focus on a single tablet, and if it can bring down the cost of the Surface Pro and market its features clearly and succinctly, it might be far more effective at attracting customers.
DON'T take potshots at competitors
Those ads slamming Apple don't make Microsoft look better. Ditto for the "Scroogled" campaigns against Google. Whatever ephemeral gains they offer aren't remotely offset by the effort it takes to produce them and the bad will they spread with some consumers. At the end of it all, those negative advertisements don't emphasize the features or usefulness of Microsoft products. They only serve to make the company look petty, mean ... and desperate.
DO take trends seriously
So the company missed the boat on mobile. That doesn't mean it's condemned to repeat history in other markets.
The trends on everyone's radar are wearable technology, in-car integration and even the Internet of Things. The last one should be particularly intriguing for Microsoft, considering it has been showcasing innovations in its "Home of the Future" for years now.
The model space is effectively one huge smart home, complete with interactive bedrooms, digital walls, sensors that can tell when plants need watering and kitchen surfaces that can call up and read recipes out loud. While we're still years—maybe decades—away from seeing these type of smart homes become mainstream, Microsoft does have a lot of experience in this space. That means it's well-positioned to usher in the early technologies that could make the Internet of Things a reality.
Microsoft doesn't lack for ambition or even innovation. What it doesn't have is vision and a willingness to play well with others. In the fast moving and ever-more heterogeneous world of technology—and particularly when you're cast in the come-from-behind role that Ballmer's stewardship has left Microsoft with—both are key.
Which may be why no one seems to be shedding many tears over Ballmer's upcoming departure. Perhaps that's because it's just what Microsoft needs to finally see the future clearly.