It Had to Happen Sometime: Gates (Slowly) Passes the Torch
Everybody needs to calm down.
Sure, Bill Gates' announcement last week that he'll be leaving his day-to-day
responsibilities at Microsoft in 2008 is probably the biggest news to
ever come out of Redmond. After all, Gates is the architect and talisman
of the company, the public face not just of Microsoft but, for many, the
technology industry as a whole. All of that is obvious.
http://rcpmag.com/news/article.aspx?editorialsid=7536
And, there's an air of nervous anticipation among Microsoft watchers
regarding the ascent of Ray Ozzie to head technical guru and the restructuring
of the team that will take Microsoft forward on the technology front.
We get that, too.
http://rcpmag.com/news/article.aspx?editorialsid=7537
So, yeah, this is a big deal, no question. But check out some of the
reactions to Gates' announcement. Nobody seems quite sure what to make
of it. We've got those who have already started to talk about a "revolution":
http://weblog.infoworld.com/techwatch/archives/006812.html
...and those who don't expect too much of a change in the status quo:
http://seattletimes.nwsource.com/html/businesstechnology/
2003070379_brier19.html
Then we have those who just don't know what to think:
http://www.internetnews.com/bus-news/article.php/3614206
...and so their headlines end in question marks:
http://www.usatoday.com/tech/techinvestor/corporatenews/
2006-06-18-microsoft-future_x.htm?POE=TECISVA
You'll notice in all of these stories that the usual suspects -- analysts,
pundits and commentators -- are all over the place on this one, too. Gates'
decision, although not exactly a big surprise to many, has led to a general
freak-out, a sort of near-panic about the state of the company that is
so critical to the financial futures of so many players in the industry.
But that panic is ridiculous and unnecessary on several levels.
First of all, Gates has said for years that he couldn't see himself running
Microsoft at 50. Well, he's 50 now. Second, Gates has slowly been distancing
himself from running Microsoft for years. He turned the CEO role over
to Steve Ballmer six years ago, and it's obvious that he's been spending
more and more time over the last few years working with his charitable
foundation. Third, when Microsoft acquired Ozzie's Groove Networks last
year, the buzz was that Ozzie would eventually become the new Gates --
or at least head of a team to replace Gates -- on the technical side.
Fourth, Gates' departure from his day-to-day role is still two years away,
which signals that Microsoft has learned something about leadership transitions
after the somewhat uncomfortable Gates-Ballmer CEO handoff. Gates isn't
walking out the door tomorrow.
What will Gates' departure and Ozzie's takeover mean for Microsoft from
a technology perspective? What course will the company set for its future?
Right now, despite all the speculation, nobody knows for sure. And that's
OK because we don't have to know right now. You'll notice that Wall Street
reacted coolly to Gates' announcement; Microsoft's stock price barely
budged the next day. We should all take a cue from the button-down types.
Partners, customers and observers have a couple of years to watch the
Microsoft transition -- one that obviously has a plan behind it -- and
to offer their input on it, which, we hope, Microsoft's new brain trust
will receive with an open mind. So, there's no need to panic...for now.
What should be the first thing on Ray Ozzie's agenda as chief software
architect at Microsoft? What do you think of Bill Gates' decision to step
down? Tell me at [email protected]
Should Ballmer Go Next?
News of Gates' eventual departure has opened up a pretty interesting little
"State of Microsoft" debate among lots of observers and analysts.
A few opportunists are suggesting that Steve Ballmer should follow Gates
into the sunset and step down as CEO. One is even lining up potential
replacements.
http://money.cnn.com/2006/06/15/technology/business2_workingtech_0615/
index.htm?section=money_technology
Granted, it's been a tough year for Ballmer and Microsoft on Wall Street,
but surely his departure would just cause too much upheaval in Redmond.
Besides, he's still a link to the company's origins and a pit bull of
a fighter with a lot of life left in him. Plus, some financial analysts
say Microsoft's outlook is getting better.
http://www.forbes.com/markets/2006/06/19/microsoft-0619markets11.html
There's Just No Way It'll Be Cool as the Original
...because if there's something Microsoft isn't, it's cool. Apple still
has the market cornered there. Nevertheless, and despite its money-losing
foray into video-game systems, the rumors that Redmond is planning a rival
to the iconic iPod (the xPod, maybe?) appear to be true.
http://www.foxnews.com/story/0,2933,199814,00.html
What name would you give Microsoft's iPod rival? Tell me at [email protected]
Your Say: Microsoft, Adobe and Courtroom Battles
Faithful readers will remember an edition of the newsletter a couple of
weeks ago that mentioned Adobe potentially suing Microsoft over a spat
concerning the removal of the "save to PDF" function from Office
2007. You might remember that it was Microsoft that wanted to include
a "save to PDF" feature, but Adobe said no -- and then things
got a little ugly.
http://rcpmag.com/reports/article.aspx?editorialsid=157
Well, apparently, Adobe is still mulling over the option of taking Microsoft
to court and hasn't ruled it out.
http://www.publish.com/article2/0,1895,1977293,00.asp
You all had some intriguing thoughts about Adobe, PDF and XPS (Microsoft's
portable document format, a PDF competitor) as well as about companies
that battle Microsoft in the legal system. A sampling:
J Fast won't be switching to XPS anytime soon and doesn't seem too enthused
about Microsoft in general. Not much ambiguity here:
"Not one thing M$ ever developed has been of their own creativity;
bought, stolen, borrowed then stolen is their motto isn't it? I am glad
the EU is taking a stronger stance against the behemoth of Microsoft than
the Department of Justice ever did and hope Adobe considers also going
in for the fight as well. I would love to see Microsoft broken up as the
DOJ had originally intended into separate companies with completely different
ownership for each. Long Live the Penguin!!!"
A lot more support, though, came down on the side of Microsoft and XPS.
Steven wrote to say that he would switch to XPS from PDF "in a heartbeat,"
and he wasn't alone. Most of you who wrote to me felt as though Adobe
was making a mistake by asking Microsoft to remove the "save as PDF"
feature.
Mark wrote:
"Wow, I just read your article on this, and I am really disappointed
to hear that Microsoft is going to remove 'save as PDF' from Office 2007.
I am using the beta of that now and love this feature. Adobe just shot
themselves in the foot on this one. I hope Microsoft presents XPS to whatever
standards bodies are needed to make it the de facto standard in both the
U.S. and in Europe. Make XPS a standard and offer it free to the world.
Provide free tools for it and see how far Acrobat drops in price!"
And an entirely different Mark wrote to express his frustration with
PDF in general:
"I'm tired of Adobe software. It takes forever to load, acts like
it is single-threaded (lots of wait states), and is brittle. I wish Adobe
would quit adding functionality and make what they've got run better."
As for companies that take Microsoft to court, you weren't overly impressed
with most of them either. Kevin offered this very thoughtful e-mail on
the topic in general and the Adobe situation in particular:
"No one likes it when a company or individual acts like they have
a 'right' to a market. If someone comes up with a new product that is
new, or just different, why do you have the right to your existing market
share? Isn't that anti-competitive in itself? I understand the complaint
that Microsoft is a monopoly; however, Adobe knew that before getting
in to the game, and that is why they chose to be compatible with Windows.
Can they really be shocked that Microsoft, or some other company, would
come up with a competitive format?
As far as the 'Save as PDF' functionality, well, I think they have an
argument there. Did they notice that SQL Server Reporting Services has
been offering this functionality since its release? I can see that Office
is more of a threat though. If their tactic is to make money I'd suggest
waiting until Office 2007 is released and then throwing a lawsuit for
licensing fees...that'd be more lucrative. If Adobe is just trying to
protect their market share, well, I believe it will cost them much more
than it ends up being worth. It seems to be fighting a loser's battle
versus innovating to win. In the end, I think they should take Microsoft
up on their concessions; they don't offer those very often and it speaks
volumes of Adobe's position."
Jason also made some thought-provoking points here, summing up what I've
always felt about government or regulatory intervention into the technology
industry:
"Obviously, everyone has the right to protect their intellectual
property, but I think many of these guys think that the court room is
an "easier" way (as opposed to Microsoft-like innovation) to
fight and receive heavy settlements than it is to battle it out on the
marketing field. Let's face it; watch dogs like the European Union, etc.
don't have enough of a root understanding of the technology that they
are screaming over in the first place. Their cry is all too often, "We're
protecting the consumer, etc.," but tell me why having save as PDF
in Office products, built in virus checkers, etc. is bad for the consumer?
Oh yes, it's actually bad for the competitor. As we go forward, so-called
specialized programs are going to become mainstream and will be included,
whether the competitors or EU like it or not."
Jerome is in the same camp: "If Microsoft has a dominant market
position on the desktop, they have the right to bundle and put whatever
technology they see fit in their operating systems."
...and Steph thinks it all comes down to jealousy:
"My little rant about the whole situation is I personally believe
that it boils down to envy. Other companies wish they can be Microsoft.
Adobe is acting like a whiney child in the grocery store when his mother
tells him he can't have that piece of candy by the checkout register.
Microsoft has complied with what (Adobe) have asked for and actually made
some compromises with them… I am sorry I am sick and tired of all
this petty...[um, let's just say "stuff"--LP] that goes on between
these larger companies all because they feel like Microsoft is a monopoly."
Hey, Steph, you're not alone. Dan's ready to chuck the whole business:
"I agree with you that Adobe's move could be a shot in the foot.
I also agree that they missed a great marketing opportunity by demanding
that MS remove the save to PDF feature. The industry just keeps rolling
along on litigation and sitting on its duff twiddling around with old
technology. It's not surprising I can't wait for retirement to get out
of IT."
Dan, enjoy your last days in the lion's den. And, to everybody else who
has written to me but hasn't been featured in the newsletter yet -- never
fear, I'm getting to you. Thanks again for reading and taking the time
to write. I love hearing from you.
Got anything else to add? Drop me a line anytime: [email protected]
Posted by Lee Pender on June 19, 2006