Bill Gates’ decision to give up his day-to-day role at
Microsoft from July 2008, and to relinquish some of his key tasks
immediately, comes at a crucial time for the company he
co-founded.
Gates and Microsoft revolutionised the way software was
produced, used and sold, but the company is facing criticism from
corporate users that it has lost focus on the products they need.
It is also grappling with competition from younger, more nimble
rivals.
According to analyst group Gartner, Microsoft is facing one of
its greatest challenges yet. “Recent trends such as Web 2.0,
software as a service and open source software are increasingly
threatening the company’s pre-eminence within the IT industry.
Google represents the most obvious challenge.”
The response to this challenge will be led by chief technology
officer Craig Mundie, who will take on Gates’ research and strategy
responsibilities, and Ray Ozzie, who will become chief software
architect.
Both have a background in developing business technologies.
Ozzie headed up Lotus and founded collaborative technology company
Groove Networks, while Mundie played a major role in the
development of Microsoft’s Windows Mobile strategy.
Commenting on the change, George Kalorkoti, group chief
information officer at solicitors Herbert Smith, said, “Microsoft
is at the stage in its evolution where a fresh set of directions,
in response to the business challenges it faces from the likes of
Google, Linux and the EU (competition issues), is going to benefit
it and its customers.”
How much focus Mundie and Ozzie put on the needs of corporate
users will be watched anxiously over the coming months, but
analysts are clear that Microsoft will increasingly align its
products to the web.
Forrester Research is predicting that Microsoft will look at
offering services like desktop management, mirroring the shift in
focus to services that occurred at IBM when Lou Gerstner headed the
company. Forrester said it was even possible that Microsoft would
change its stance on Linux by porting SQL Server and other products
to Linux.
Gartner also believes there will be a move into services. “While
competitors like Google pose a new threat to Microsoft’s successful
Windows and Office franchises, Microsoft will bring a number of
online, desktop and server assets to this challenge.”
Microsoft has already signalled its intent to invest more than
£1bn in research and development to adapt to Web 2.0. Gartner also
highlighted the importance of Ozzie’s “Live” vision, which combines
Microsoft software with software as a service-based services to
deliver what Microsoft considers to be an optimum IT environment
for the next generation of computing.
Microsoft has spent considerable time and effort telling users
why open source technology is not an alternative to its products.
However, many users and commentators feel it has so far missed the
challenge of the increasingly compelling alternative software now
available from Google.
Peter Leahy, head of IT at Endsleigh Insurance Services, wants
Microsoft to create an overall framework, both technologically and
commercially, where users can select a service and run it from a
suitable hardware device, for the time that they want.
Leahy suggested that all computer applications should have the
potential to be delivered on an on-demand basis, in a similar way
to mobile phone services.
While individual companies would continue to need developer
tools and platforms to create their own software, he expects mass
market applications such as e-mail, document storage and instant
messaging would be run by specialist service providers.
Pressure for Microsoft to move in this direction is increasing
due to the delay of Vista, the next desktop Windows operating
system, and investors’ concerns over its Q3 2006 results, said
Forrester.
“Microsoft is crawling into the future of concise internet
services burdened by its bloated, over-engineered, pay-by-the-CAL
[client access licence], one-size-fits-all software model. It must
now face the future of ad-supported or subscription-based on-demand
software,” Forrester said.
This is compounded by the widespread reluctance of users to
migrate to the latest Microsoft software. A recent board meeting of
the Corporate IT Forum, whose members represent the IT departments
of many blue-chip companies in the UK, agreed unanimously that they
would not rush to migrate to Vista when it was released in
2007.
According to the forum’s services board, “Many organisations are
only now migrating fully to XP. As far as most of those with large
PC estates are concerned, the technology needs to be established,
stable and probably have at least the first service pack available
and deployable.
“We expect that during 2007 organisations will observe this
technology (Vista) closely and have pilot implementations under
evaluation. The board would be surprised if many large
organisations were migrating before 2009.”
One of the great achievements of Microsoft has been to offer a
standard platform on which enterprise applications can be
developed.
“Bill’s greatest legacy to the corporate world is
interoperability. Microsoft’s success in the past two decades under
Bill Gates was undoubtedly based on creating a lingua franca, via
application interfaces, that positively shaped technology
management and provided a much-needed platform for skills,” said
interim IT director Colin Beveridge.
However, Tim Jennings, research director at analyst firm Butler
Group, said IT directors would be disappointed if they wanted more
focus from Microsoft on enhancing IT infrastructure and
platforms.
“Had the appointments been reversed – Mundie to lead the here
and now architecture and Ozzie to lead the future research – then
there might have been more evidence of a shift towards enterprise
IT. But as it is, I believe Ozzie’s attention will primarily be on
moving towards IT as a service, rather than on building enterprise
infrastructure,” he said.
Ozzie’s experience developing Lotus Notes, the breakthrough
collaborative technology now owned by IBM, could help Microsoft put
collaboration at the heart of a new enterprise software focus.
It is a prospect that excites some users. David Tidey, head of
information systems at The Royal Borough of Kensington and Chelsea,
said, “We are now working to phase out Lotus Notes. It was only
ever used as an application environment, not a collaboration
environment. We are replacing it with a . net MS development.”
Ray Titcombe, chairman of the Strategic Supplier Relationship
Group, a consortium of 11 user groups, added, “Microsoft has a
perfect opportunity and is ideally placed to move collaborative
technology forward.”
The Trustworthy Computing Initiative
Microsoft has fought a long, debilitating battle to ensure the
security of its software. The Trustworthy Computing Initiat ive –
the 2002 announcement by Bill Gates that the company was to make
security a top priority in its product development – proved far
tougher than the Microsoft founder envisaged.
However, it does seem to be working, according to Paul Dory,
vice-president of digital security at BP. “I do not expect a major
change in security strategy in Microsoft from the direction that
Bill framed in his famous security direction memo of 2002 and
subsequent follow-ups,” he said.
“I have had the opportunity to speak with both Craig Mundie and
Ray Ozzie and it is clear that safe and trusted computing is front
of mind for them,” he added.
Microsoft has never been just about Bill Gates >>