Bill Gates is not afraid.

OK, this is doing my nut. There is an advertising campaign I keep seeing on the internet from a company trying to hawk a report on a new company who is “terrifying” Bill Gates because they are set to “take over from Microsoft” within the year.

Microsoft - someone is creeping up on you!

Let’s get one thing straight for a start.  I am not going to buy industry analysis from a company who doesn’t even realise Bill Gates doesn’t run Microsoft any more.  He doesn’t even work there.  Bill’s day job is running the Bill & Melinda Gates Foundation, a philanthropic body.  OK, he still owns a chunk of Microsoft (internet says 8%) but then so do a lot of people, mostly investment banks and we all know what we all think of them for a start. 

Contrary to being terrified, I think Bill Gates is probably kinda chilled out.  Like I would be if I were in my mid 50s with no real job and enough money to keep a central African nation debt free for the next half a century.  I can see the appeal of that lifestyle.

Bill Gates is happy.

No, let’s be honest if there is a company which terrifies Microsoft then it is Microsoft itself.  If Microsoft were a person, it would wake up in the morning, shuffle over to the mirror, take a long hard look at itself and wonder when it was that it got so fat and grey and old looking.  And when did its knees start to ache so?  Funny, Microsoft and I are broadly similar ages...  Oh, the empathy!  But now Microsoft looks to much of the world like IBM did maybe 15 years ago when Microsoft was doing unto others what others are now starting to do unto Microsoft.

Microsoft is run by a guy called Steve Ballmer.  His name presents a few moderate opportunities for punning in much the same way as former Labour Education Secretary Ed Balls does.  And sadly for Steve and for those of you who may hold stock in the great Satan, sorry, the world’s premier software house those puns on his name probably aren’t too far from the truth.

Steve Ballmer - doesn' t look so happy.

Y’see this isn’t about being good with money, which Ballmer is.  He’s all about lowering Microsoft’s cost of operations and all that good corporate governance stuff (he’s former money man of the outfit so you’d expect that).  It’s not that he isn’t focused on the customer – under Ballmer we’ve seen more consultation and focus groups and quality development than ever.  In fact they’ve built entire products based on what Microsoft customers like you and I have been feeding back to them.  The thing is Microsoft (much like Nokia who are in a similar position) have proven you cannot innovate by committee.  You can’t have a crowdsource on how to be leading edge. If you try and build an operating system with every feature everybody wants you end up with Vista.  (disclaimer:  I have no beef with Vista you XP lovin’ weenies!)

Say what you like about Microsoft in the 80s and 90s, and believe me, I did, but back then those guys were turning profit and they were going gung-ho for growth.  They innovated and they pretty much led the pack.  OK, some of the ways they did that may have seemed somewhere between “questionable” and “objectionable” to a lot of folk but Gates led from the front, shot from the hip, and became a billionaire with the biggest success story in town.  The guy had (or has, he’s not dead yet) leadership.  Now this may sound like I’m eulogising the guy, which I’m not.  Leadership is not intrinsically good whatever that management manual you’re reading may say.  Pol Pot had “leadership” as much as did the Buddha.  Steve Ballmer on the other hand has “administrative skills”.  See the difference?  The market does.

This man does not run Microsoft

Now Apple Computer is valued higher than Microsoft as a company by Wall Street.  Which kinda shows that analysts base their opinions more on the cool factor of their new iPad than nice solid stuff like sales, profitability, reserves, assets, etc. all of which are way higher in Microsoft’s account than Apple’s.  So why is Apple the “more valuable”?

Well, overheating iPads and iPhone4 Antennagate apart, Apple is innovating and growing highly consumer-visible technology which the general population then regards as being “good”.  Every foray Microsoft takes into that kind of market seems to end in failure.  Despite Apple’s OS X having more flaws, failures, security exploits and so forth in its first year of release than Vista did, ask any dude in the street which is the “better” and they’ll say Apple.  Unless you ask me in which case, well, you know.  Or if you ask my dad, because he won’t have a clue what you are talking about.  But you get my point.  Microsoft is writing its own bad press here.

Ballmer again. I'm not sure I'd call that look "happy"

To the commercial faux pas of Vista check out Zune, Windows Mobile (aka Windows Phone), Xbox 360 red ring of death, the Hotmail problems they suggest you use Chrome to fix...  Let’s not even mention the KIN, from launch to embarrassing shuttering in like 2 months...  Ballmer mutters that “Microsoft has lost a whole generation” and seems to think the platitude fixes the underlying problem.  More of a problem is multiple divisions within the belly of the beast all trying to bring competing products to market.  For mobile devices do we go with WinCE, Windows Phone or a “lite” version of Windows 7?  Or some new Live! based monstrosity?  I’m a consumer and I am confused.  I bought Android.  According to Gartner, so did pretty much everybody else who’s not got a Blackberry deal.

Now this is a shame.  You see I am a fan of Longhorn-era Microsoft product.  I can say that without feeling dirty.  Now we have the best, most reliable, most secure, stable, interoperable Microsoft software ever.  You know how we used to bitch about how MS stuff was junk but buy it anyway?  Well now the gear is good and the buyers are staying away.  Part of this is to do with the recession, sure, but part of it is because, well, things are just changing. 

Running Microsoft is physically demanding work.

We don’t even want to be PC-centric (whether that’s a Windows PC or a Mac or a Linux computer running your favourite distribution’s remix).  We don’t want software on a single box.  We are into the cloud, SaaS, virtualised desktops, accessing data from a range of devices like handhelds, phones, next gen car dashboards and even bathroom scales and toasters I see are now internet-ready.  Microsoft is still thrashing away in its comfort zone of Office, Server, Windows, etc.  But we aren’t really so interested in that.   Stuff like BPOS seems unconvincing against GoogleAps but is probably a far better product and doesn’t come from a company under investigation in just about every jurisdiction in the world for data protection violations.  Some will say OpenSource is dealing the killer blow, but with NetApps reporting a less than 1% market share for Linux of all flavours I don’t share that opinion just yet.

I’m reminded of the difference between Kodak and Polaroid.  Remember Polaroid?  If you are like 20s or younger then you need to know Polaroid was a HUGE manufacturer and brand leader in cameras, film, photography stuff, sun glasses and more.  Back in the day they made a decision to be top of the field in film. They were pleased to see Kodak diversifying into digital. This was taking Kodak’s focus off film where Polaroid would then excel and get huge market share.  Oh, what market?

This has to be what is terrifying Steve Ballmer, waking him in the night in a sweaty nightmare (I apologise unreservedly for the image that must have put in your mind).  Microsoft won’t be killed by Apple, or Google or Canonical.  It will implode like the Roman Empire and maybe reinvent itself like IBM did.  And if it fails it will do so because it lacks the Ballmers to ditch all the focus groups and just bring out strong, innovative cutting edge products which will deliver to business and appeal to consumers and fit within a defined strategy for their own business. 

Mr Ballmer, if you are reading this, that counts as consultancy and you owe me $1000.00 plus tax.  I take PayPal...