Should Microsoft reinvent itself and develop new businesses outside of software?

“Bob Frankston is one of the smartest people I speak to. If you don’t recognize his name, Bob is best known as the programmer who wrote VisiCalc, the first spreadsheet, realizing the design of his partner, Dan Bricklin,” Robert X. Cringely writes for PBS.

“In a sense Microsoft is a lot like the Roman Empire. The Roman Empire’s growth and economy was driven by conquering and plundering neighboring regions. Within the Empire they created a sort of safe economic zone where commerce could work and technology could be developed. However, that came at a price, as they tended to destroy everything outside the empire as it grew,” Cringely writes.

“Same for Microsoft, whose leaders were greedy and made a number of good, shrewd business decisions. They were also ruthless. Over time they managed to destroy the surrounding software industry. Within Microsoft’s world was a sort of safe economic zone. If you were not a threat to Microsoft or if you did something Microsoft didn’t want to do (like make PCs) you were able to grow under the shadow of Redmond. When the emperor spoke, you listened,” Cringely writes.

“It is too early to predict the fall of the Microsoft Empire. Does Microsoft have the leaders and generals who can lead the company into the future? Who knows? In the software world there is nothing else to conquer or plunder. In other markets it will be hard, if not impossible, for Microsoft to dominate whole industries as it has in the past. Microsoft now needs to act like a responsible company, work well with others, and grow through cooperation and teamwork. This will be hard for Microsoft,” Cringely writes. “The Romans couldn’t do it. The Romans neglected one of their ‘partners’ and eventually that partner did them in.”

Cringely writes, “Today’s Microsoft is a great generator of cash. With some good product refreshes, this cash generation can continue for years to come. The BIG decision is what to do with the cash. Microsoft needs to develop new businesses. Microsoft could have a great future doing things that have nothing to do with computers. They could be making a great electric car, or great new medications, or any number of other things. Microsoft could create new industries that could have a huge benefit to the economy. Microsoft could change the world, again. Ten years from now Microsoft could be a huge holding company of which PC software is but one part. They don’t have to gut the software unit, which is viable enough to be a great moneymaker for another 25 years if Microsoft manages it well.”

Cringely writes, “Right now Microsoft is like a deer in the headlights. They are stuck on software and computer stuff. They can’t move. There are much more interesting growth opportunities out there.”

Full article, including much about Net Neutrality and the idea that “making almost any regulation specifically to hinder OR HELP the Internet can only make things worse,” here.

MacDailyNews Take: Microsoft has never been a maker of great, inspired, elegant, innovative, original software. The best Microsoft products have been bought or copied/stolen. Ideas generated inside of the Redmond behemoth are… well, two words: Microsoft Bob. Maybe Microsoft should take their billions and do something else with it; something more useful, at which they might prove to be more adept?

For example — forget Cringely’s electric cars: electric, schlmetric — GM has so far invested “hundreds of millions of dollars” in hydrogen fuel cell research. Imagine what Microsoft could do in that field with their many billions? Gather the best scientists and engineers in the field, pay them extremely well, and let them get to work. Certainly, leading the world into a hydrogen economy and a truly sustainable future is a better use of their big sweaty piles of cash than slipping and then finally shipping another bloated, ugly, counterintuitive, inelegant Windows operating system along with an equally affected office suite and other software products?

Although, it would take a good bit of PR to reconcile “Microsoft+Hydrogen” (see: Hindenburg), such an endeavor might even be more profitable than floundering around in software trying desperately to cling to “backwards compatibility” to maintain their market position. One thng: just focus on the fuel cell technology, Microsoft, and let Apple handle the vehicle control software and the user interface, okay?

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Related MacDailyNews articles:
What Microsoft has chopped from Windows Vista, and when – June 27, 2006
Windows Vista rips-off Mac OS X at great hardware cost (and Apple gains in the end) – June 13, 2006
Computerworld: Microsoft Windows Vista a distant second-best to Apple Mac OS X – June 02, 2006
How to delete a shortcut in Windows Vista in just 7 steps – June 01, 2006
Microsoft botches another copy job: Windows Vista Flip3D vs. Apple Mac OS X Exposé – June 26, 2006
Thurrott: Microsoft collapsing under its own weight, Gates has driven Windows Vista into the ground – April 20, 2006
Windows Vista to be Microsoft’s last operating system? – April 21, 2006
What’s the difference between Mac OS X and Vista? Microsoft employees are excited about Mac OS X – March 22, 2006
Thurrott: Microsoft going to get eaten alive over Windows Vista’s resemblance to Apple’s Mac OS X – March 09, 2006

93 Comments

  1. Microsoft is a disease.

    Only with young small companies can you get any innovation now a days.

    Even Apple copies a lot. Mac OS X is a botch job on top of a solid Unix foundation.

    The iPod is a ripoff of a MP3 player.

    Where is the innovation from Apple and their “billions”?

    The only thing we are seeing is some great stuff in colleges.

  2. Macsweep,

    Electric vehicles are typical liberal Ed Begley, Jr. bullshit. Feel good, knee jerk stupidity. As they plug in their cars, the morons conveniently ignore that the electric power with which they are “saving the environment” was produced at the electric plant that burns tons of dirty coal and emits the remains into the atmosphere.

    As MDN states so concisely: “electric, schlmetric.”

    That said, I do wonder if Microsoft could make a workable hydrogen fuel cell vehicle if they wanted to do so. That would truly change the world.

    Heck, just dropping Windows and having everyone switch to Mac OS X would send world productivity skyrocketing.

  3. In his acclaimed book on investing, “One up on Wall Street,” investment genius Peter Lynch warned against profitable companies following a policy of “deworseification” – a slap at diversification. Lynch astutely observed that companies that move away from what they do best typically squander profits badly, and that the operations they expand into usually fail.

    An example: General Mills once moved away from their core grain milling, commodities, cake mix and cereal business, by acquiring clothing lines like Chemise Lacoste, clothing stores like Talbots and Eddie Bauer, and restaurant chains like Darden Restaurants (Red Lobster and Olive Garden). Under the management of General Mills, these businesses floundered, and became a drag on corporate earnings.

    Fortunately, the executives at General Mills (no doubt prompted by shareholders) saw the light. The company sold off these businesses and focused on what they do best. The result: General Mills became more profitable, and the individual businesses they sold off flourished.

    The lesson: they could have put the money lost in these ventures to much better use.

    I love reading Cringely, but I would not make business or investment decisions based on his thoughts. It’s what makes Mac Daily News fun. But for all the purported news about things Macintosh that we see here that gets us all worked up, if you step back, you realize that about 95 percent is little more than NOISE. Real and impactful news is very far and few between. The article above is yet another example of what I mean.

    But I read it anyway.

  4. Carson Busses,

    If companies should stay focused on what they do best, then Microsoft should keep copying Apple innovations, pretending that they invented them, and illegally leveraging their monopolies.

    Software can’t be what Microsoft does best. No company can be that incompetent.

  5. Puhleeeeze.

    With their tens of billions of dollars, how about if Microsoft just built a secure crash-free OS at a reasonable price, or a quality and affordable (non-bloated) Office productivity suite, or a game box that didn’t catch on fire, or… you get the idea.

    Their core business is Windows and Office, and they can’t get those right. Why would we think they could go into a completely different business and do well to anyone’s benefit (other than give me a couple of billion for “research”)?

    Uh, sorry. My bad. Microsoft’s “core business” is cut-throat FUD and illegal, unethical business practices, at which they excel.

    I could be in a coma for weeks and still figure out that Microsoft will always be a paranoid snake of a company, and all that they have of value is money. Nothing else.

    Wait. I’ve actually been in a coma, and that’s what I figured out about Microsoft while unconscious. See?

    Cringley writes the most compelling and thoughtful phrase ever about Microsoft:

    “It is too early to predict the fall of the Microsoft Empire. Does Microsoft have the leaders and generals who can lead the company into the future? Who knows? In the software world there is nothing else to conquer or plunder. In other markets it will be hard, if not impossible, for Microsoft to dominate whole industries as it has in the past. Microsoft now needs to act like a responsible company, work well with others, and grow through cooperation and teamwork. This will be hard for Microsoft…”

    Exactly. It won’t happen with Gates and Ballmer anywhere near the top of the totem pole. It may not happen at all. As to the end of the Empire, the only thing left to figure out is when, not if.

    I’m sleepy now…

    Tera Patricks
    Tera Talks

  6. As they plug in their cars, the morons conveniently ignore that the electric power with which they are “saving the environment” was produced at the electric plant that burns tons of dirty coal.

    What about nuclear plants, the Pandora’s Boxes with a byproduct that must be carefully stored & guarded forever? (Sorry, the “only 10,000 years” argument sounds like forever to me). Coal isn’t great, but at least the plants stop polluting when you shut them down.

  7. MDN’s take is just a wee bit off-target and shows a lack of knowledge about how business works. Microsoft will never give up “backwards-compatibility”, because they’re signing their own death warrant if they do so. Of course, this is probably what MDN secretly desires, so that OSX can then displace Windows in the workplace. Face it–that’s not going to happen. Too many legacy apps, too many billions of dollars necessary to port over to a new platform. Heck, we still have COBOL apps running!

  8. They could be making a great electric car, or great new medications

    OMFG!! NO!!!

    One reason MS has survived is because, for the most part, their lousy products haven’t killed anybody.

    Would you really want to entrust your life to the company that gave us Windows, Clippy, and Steve Ballmer?

    If MS diversifies, it’ll have to be into areas where their usual boobed product design & execution won’t hurt anyone. Maybe MS can fund independent research or something; just keep it well clear of MS meddling.

  9. old fogey,

    Read it again. MDN clearly explained that Microsoft clings to backwards compatibility in order to “maintain their market position.”

    So, who really has a “lack of knowledge?” I vote for the old fogey who can’t read and comprehend.

  10. The only way to save Microsoft is to destroy it. Microsoft’s current leadership is blinded by lack of vision, shackled by adoration of historical precedence, restrained by adherence to mediocrity, and committed to the pathological practice of suppressing corporate rivals through economic leverage rather than intellectual competition. Getting rid of people who conform to this corporate culture and creed of greed is the first step in the right direction.

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