Thursday, November 10, 2005

Turn the Ship Around: The Gates/Ozzie Memos and Syndication

Can Microsoft adopt their product offerings to assume a leadership role in the world of Web 2.0? Will they create and deliver products and services to help the masses move from browse to search to subscribe? Can they stay relevant to their installed base?

The mainstream media and the blogosphere are all awash with buzz over leaked internal memos from Microsoft’s Bill Gates and Ray Ozzie. Calling web market behaviors “the next sea change” for Microsoft, the memos’ summarize Microsoft’s recognition of the need to harness the technology leviathan’s power in pursuing a new web strategy. Gates sums up the Microsoft leadership deficit saying: “to lead we need to do far more.

While InfoWorld has shared the full text of the Gates and Ozzie memos (certainly worth taking the time to read—and yes they are lengthy), I’ll defer to minds greater than my own to render commentary on the ‘macro’ impact of their content. Let’s focus on key comments about the role syndication will play in Microsoft’s moves.

Gates: “This coming ‘services wave’ will be very disruptive.

My take: “Disruption begets chaos. Chaos begets opportunity. Opportunity begets profits.”

Gates: “This next generation of the internet is being shaped by its ‘grassroots’ adoption and popularization model, and the cost-effective "seamless experiences" delivered through the intentional fusion of services, software and sometimes hardware.

My take: “Grassroots availability of syndication technologies is clearly part of this next generation internet. Organizations and individuals are bypassing and disrupting traditional media distribution outlets through syndication, creating personal reach into the customer base.”

Ozzie: “Computing and communications technologies have dramatically and progressively improved to enable the viability of a services-based model.

My take: “Syndication technologies are disruptive communications technologies. Using them gets us closer to the customer than traditional methods, and the only software the customer really needs to tap into this is a browser. That’s got to be a wake-up call for a company selling software facilitating any type of communication—not just Microsoft.”

Ozzie: “Businesses are increasingly considering what services-based economics of scale might do to help them reduce infrastructure costs or deploy solutions as-needed and on subscription basis.

My take: “Now I can die. The world’s largest software company tacitly admits software is a service.”

Ozzie: “This model has the potential to fundamentally impact how we and other developers build, deliver, and monetize innovations. No one yet knows what kind of software and in which markets this model will be embraced, and there is tremendous revenue potential in those where it ultimately is.

My take: “Translation: Our fundamental sources of revenue are being disrupted. Innovate or Microsoft will become a résumé factory.

Ozzie: “We’ve got amazing products in Office and our other IW offerings, having fully embraced standards such as XML, HTML, RSS and SIP.

My take: “What production Microsoft applications do you use to consume syndicated contents? Microsoft has followed, not led out in RSS technology application. They’ve been out-innovated here, and are feeling pain.”

Ozzie: “But for all our great progress, our efforts have not always led to the degree that perhaps they could have.

My take: “This reminds me of that great dialogue between Han Solo, Obi-Wan Kenobi and Luke Skywalker as the Millennium Falcon emerges from hyperspace on its way to the now destroyed Alderan. Solo wants to stop a ‘lone fighter’ from reporting the whereabouts of the Falcon when he says:

Han: "I think I can get him before he gets there. He's almost in range."

Obi-Wan: "That's no moon. It's a space station."

Han: "It's too big to be a space station."

Luke: "I have a very bad feeling about this."

Obi-Wan: "Turn the ship around."

Han: "Yeah, I think your right. Full reverse! Chewie, lock in the auxiliary power."

Ozzie: "RSS is the internet’s answer to the notification scenarios we’ve discussed and worked on for some time, and is filling a role as ‘the UNIX pipe of the internet’ as people use it to connect data and systems in unanticipated ways."

My take
: “Microsoft product managers take heed. You’d better figure out how RSS fits into your roadmaps like last year and deliver it to the market last quarter! You’re late, and late is very bad here.”

Ozzie: “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.

My take: “Hate to say ‘I told you so,’ but I will. See my posts from October 21st and October 24th.”

Ozzie: “Most all use RSS in one way or another for data sharing. Remixing and mashing of multiple web applications using XML, REST and WS is common; interesting mash-ups range from combining maps with apartment listings, to others that place RSS feeds on top of systems and data not originally intended for remixing.

My take: “Payday for individuals and companies that have pushed syndication beyond initially intended bounds. You’ve just been validated.”

Ozzie: “Many fund their sites using syndicated ads, but have a difficult time transforming their services into higher levels of commerce.

My take
: “Good observation here. Figuring out the monetizing of syndication is still up for grabs here. This is a textbook indicator of a disruptive wave. Who will lead this innovation?”

Ozzie: “But enabling grassroots adoption is not just a product design issue. Today’s web is fundamentally a self-service environment, and it is critical to design websites and product ‘landing pages’ with sophisticated closed-loop measurement and feedback systems.

My take: “A great tactical take-away for anyone responsible for web content here. Don’t over-invest in your home page to the exclusion of the rest of your site’s content. Each page must stand on its own, because customers will get to them less and less through the ‘hop, click and a jump’ from your home page.”

Ozzie: “What should we do to bring Office’s classic COM-based publish-and-subscribe capabilities to a world where RSS and XML have become the de facto publish-and-subscribe mechanisms?

My take: “While not an overnight event, Microsoft Office is (or at least the file formats are) in danger of becoming a legacy app. Goodbye .DOC, .XLS and .PPT and hello .XML.”

Ozzie: “I have created an internal blog that will be used to notify you of further plans as they emerge. There, I’ll point you to libraries of documents that you will find interesting to read, and I’ll be experimenting with ways that you can directly engage in the conversation.

My take: “Way to eat your own dog food, Microsoft. Glad to have you joining the rest of us.”

Ozzie: “The opportunities to deliver greater value to our customers, to our developer and partner communities, and to our shareholders are significant. I very much look forward to embarking on this journey with all of you.

My take: "Web services companies take heed. There’s a lot of money and a lot of people who’ve started working on stuff in your space. The ‘800 pound gorilla’ has entered the building."

All in all, I say kudos to Microsoft for a fairly intellectually honest look at itself.

And while I would never underestimate Microsoft, I am left with the nagging question: will what the memos set out to do be enough, or is it ‘too little, too late?’



At November 10, 2005 11:55 AM, Anonymous Ryan said...

Microsoft sucks!!! Oh wait, for a second there I thought I was on one of the mindless blogs that I see all over the place. It will be interesting to see if Microsoft can move quickly enough to get this new technology to mainstream users. If they can move quickly enough then I don't think that it will become a "resume factory" anytime soon. I am also interested to see how quickly other companies like Google get this technolgy to the masses.

I hope you make it though the night and that Microsoft doesn't send out the goon squad for this post.

At November 10, 2005 7:32 PM, Anonymous Anonymous said...

Are the Microsoft comments for real? Or are they to keep Microsoft's coporate customers from straying off the range for a while? I guess it doesn't matter when you think about it. If Gates and Ozzie's comments are vapor-service, then they've felt the pressure and had to say something publically about it. If they're concerns are real, then Gates and Ozzie have felt the pressure and had to say something about it.

Microsoft must be feeling the pressure.


At November 11, 2005 6:28 AM, Blogger Kip Meacham said...

If the comments are only an attempt to hold on to customers (which I don't believe they are), they'll be "found out" in short order. Microsoft product plans are the most fleeting of secrets, and the absence of product action against the memos will manifest itself quickly enough.

If the concerns voiced are real (which I believe they are), then yes, there must be serious pressure on multiple fronts including industry analysts, key accounts and shareholders--not to mention internal pressure from the forward-thinking rank and file of Microsoft.

Moving forward, being late to market is a luxury Microsoft will not have the luxury of enjoying anymore.


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