Bill Gates often cites luck as a critical factor in his success with Microsoft.
Best-selling author Malcolm Gladwell famously developed the theme in Outliers, in which he argued that Gates and a few other tech titans were born in the right circumstances at the right time to strike it rich in the computer industry.
While Gladwell's point was about the social dependencies and very narrow launching windows of great historical fortunes, another thought-provoking, best-selling writer just finished a study looking at the case from another angle. Jim Collins, who wrote the business classic Good to Great, has wrapped up one of his data-based, multi-year research projects that culminate in books -- this one partly on the role of luck.
Collins and co-author Morten T. Hansen summarized the book, Great by Choice, in an article in The New York Times this weekend.
In the article, they recap the Gladwell argument on Gates:
He just happened to have been born into an upper-middle-class American family that had the resources to send him to a private school. His family happened to enroll him at Lakeside School in Seattle, which had a Teletype connection to a computer upon which he could learn to program -- something that was unusual for schools in the late 1960s and early '70s.
But Collins and Hansen go on to argue:
The difference between Mr. Gates and similarly advantaged people is not luck. Mr. Gates went further, taking a confluence of lucky circumstances and creating a huge return on his luck. And this is the important difference.
Bill Gates didn't just get a lucky break and cash in his chips. He kept pushing, driving, working -- and sustained that effort for more than two decades. That's not luck -- that's return on luck.
In other words, by historical accident, the opportunity to make $100 billion out of software was probably reserved for a few thousand people born in the right places in the mid-'50s. That said, looking closely at why some of those thousands made huge fortunes and others didn't is still a source of some pretty interesting business lessons.
Posted by Scott Bekker on October 31, 20111 comments
Microsoft pulled the switch today on a previously announced shuffle of competencies in the Microsoft Partner Network.
"Today, the [Unified Communications] competency has been officially retired and we officially launch the Messaging and Communications competencies," wrote Ian Hameroff, group product manager of Exchange Partner Marketing at Microsoft, in a blog post.
Microsoft announced in May that the competency shift would be coming. The move takes the 28-competency MPN structure up to 29 competencies.
By product, the Messaging competency is focused on Microsoft Exchange and the Communications competency is focused on Microsoft Lync. Assessments for the new competencies are scheduled to become available in English by December, with versions in other languages coming later. The assessments will be voluntary until May 2012, when they become mandatory.
Posted by Scott Bekker on October 31, 20110 comments
Here in the States it's Halloween, the day we all try to freak ourselves and each other out with scary costumes and scary movies. In the spirit of the holiday, I'll offer up my seven worst nightmares for Microsoft partners.
What would be the worst-case scenarios for solution providers who have made big bets on Microsoft technologies?
1. Windows Phone Drifts Into Oblivion
With an innovative smartphone operating system and with Nokia going all-in on Windows Phone, Microsoft believes it can build its market share from the current low single-digits into a credible third player in the smartphone market. Analysts at IDC and Gartner like Microsoft's chances and also believe the company could hit roughly 20 percent market share for Windows Phone by 2015. But if the platform's share continues to show zero growth, more partners than just Nokia will be left holding the bag. Any solution provider who invested development and other types of resources in the phone will be in trouble.
2. Windows 8 Becomes a Tombstone Instead of a Tablet
Microsoft made a huge bet on a Windows Phone-like interface for Windows 8, with a touch-first approach designed to win share on tablets. The move involves significant new industry partnerships around ARM processors -- it's no longer just Intel (and AMD) inside. Solution providers, too, are being encouraged to design solutions around Windows 8-based tablets. But what if users decide that they still like the iPad better? After all, that's what's happened to every other iPad killer on the market so far.
3. Windows 8 Sucks the Blood Out of Microsoft's Desktop Dominance
Scarier still on Windows 8: Microsoft is putting all its user interface eggs in the touch-first basket. Many observers think it's brilliant. But what if the naysayers are right -- that the tried-and-true, mouse-and-keyboard approach has worked for so long because it's how users want to interact with a PC? Could Microsoft Windows 8 catastrophically damage Microsoft's one-billion PC installed base? One other thing to note -- developers have already expressed unhappiness with some of the language and development tool decisions in the complex Windows 8 version matrix. Poor execution on the transition could alienate the developers that have made Microsoft dominant.
4. Internet Explorer Evaporates to a Shadow of Its Former Self
Windows' market share has been falling slowly, especially when you count tablets as PCs, as market research firm Canalys does. But Internet Explorer has been losing users at an extremely rapid clip. Microsoft's days of strict antitrust oversight are over, but will the company's slide in browser usage make the rekindled Windows-IE bundling possibilities irrelevant?
5. Microsoft Chainsaws Partners Out of the Cloud.
The first four scenarios involve potential Microsoft missteps, where partners are pulling for Microsoft's success because it contributes to their own success. But what about cases where Microsoft turns away from partners? Some evidence of friction is already apparent when it comes to Office 365/BPOS, where control of customer billing has been an issue. Clearly, partners need different business models to make good money in the cloud. But solution providers' bread-and-butter has been server installation and maintenance. As more and more of that infrastructure gets absorbed by large cloud providers, including Microsoft, more brutal battles could be coming.
6. Dynamics Changes Leave Small Partners in the Cold
Microsoft this month launched the Master VAR program, partially as an acknowledgement that the new Microsoft Partner Network leaves less room for small partners with stable, rather than fast-growing, practices in the business applications market. Partners who don't like the Master VAR model may find themselves with few places to turn -- at least in the Microsoft ecosystem.
7. Small Partners Become Ghosts in the Microsoft Partner Network
A common criticism of the year-old Microsoft Partner Network, which went fully live on Nov. 1, 2010, was that it's geared toward larger partner companies, not just in the Dynamics area but across the board. Requirements for minimum numbers of certified people to achieve gold and silver competencies mean companies with fewer than about 10 employees will have a very difficult time achieving competencies. Will those partners become the ghosts of the MPN -- still formally enrolled in Microsoft's program but looking to other vendors as their most strategic partners?
Will any of these nightmares come true? There's evidence of the last few taking place, although none of it is definitive or irreversible. As for Windows 8 and Windows Phone, there are a lot of reasons to be enthusiastic about Microsoft's recent strategy shifts. But talking about reasons for bullishness wouldn't be very much fun on Halloween. Check back with us on Thanksgiving.
Posted by Scott Bekker on October 31, 20110 comments
Every now and again Microsoft pulls product plans, R&D Division projects and a little creativity together to come up with a video showing what technology could allow in the near future.
A few years ago, a Microsoft video popped up at trade shows and on YouTube showing ubiquitous surface computing on walls, floors and windows, accompanied by credit card-sized handheld devices.
Microsoft went back to the future again this week with a new concept video.
Kurt DelBene, president of the Microsoft Office Division, explained the rationale for the videos in a blog post today:
We create these videos to help tell the story we see unfolding in technology, and how it will impact our lives in the future.
All of the ideas in the video are based on real technology. Some of the capabilities, such as speech recognition, real time collaboration and data visualization already exist today. Others are not yet available in specific products, but represent active research and development happening at Microsoft and other companies.
This video wasn't as stunning to me as the one from 2009. I think it's partly because the industry has come so far in the interim with tablets, smartphones, motion sensors and voice recognition, and partly because this video seems to be projecting only a few years into the future rather than a decade.
Still, it's well worth a six-minute, 17-second investment of time:
Posted by Scott Bekker on October 27, 20111 comments
Microsoft cited Office 365 as a bright spot in the otherwise lackluster quarterly earnings announced last week. For full coverage, see Kurt Mackie's story, "Bing Drags Down Microsoft's Q1 Earnings."
"The early success of Office 365 has surpassed our expectations. Businesses around the world, and of all sizes, are making the commitment to Microsoft's cloud services," CFO Peter Klein said during the earnings call.
Bill Koefoed, Microsoft's general manager for investor relations, added some detail about the cloud computing productivity suite, which formally launched at the very end of June, right around the start of Microsoft's current fiscal year.
"In the first 10 weeks of Office 365 availability, the number of new customers exceeded what took us over two years to build with the first version of our business productivity online service," Koefoed said.
A key difference for Office 365 is the ability for customers to purchase the full Office suite as part of the subscription, an option that wasn't available in the former Business Productivity Online Suite.
Koefoed also said Office 365 customers are buying more products and driving new revenue streams. "For example, when we've won a competitive bid in the enterprise for messaging and email, 80 percent of the new customers have bought SharePoint and Lync, in addition to Exchange," he said.
The expansive customer behavior extends to small businesses, which historically have only bought Office, Koefoed said: "Today with Office 365, 80 percent of the time, we've seen them buy the bundle of SharePoint, Lync and Exchange."
All that sounds good for the suite, as far as it goes. Microsoft has always been cagey about the number of customers buying BPOS -- the fact that Office 365 outsold it in 10 weeks underscores why. At the same time, the absence of a comprehensive advertising campaign behind Office 365 has been surprising.
The fact that Microsoft isn't yet sharing the numbers of Office 365 seats sold probably indicates that although it's exceeding Microsoft's expectations, those expectations may have been quite low.
Posted by Scott Bekker on October 27, 20112 comments
Details are emerging in a published report on how exactly Microsoft is entering the mix for a potential Yahoo Inc. acquisition.
The Wall Street Journal is reporting today that Microsoft is working with Silver Lake Partners and one of Silver Lake's investors, the Canada Pension Plan (CPP). Silver Lake and the CPP were co-investors in Skype, which Microsoft acquired earlier this year for $8.5 billion.
According to the WSJ, Microsoft has been wary of a solo offer for Yahoo after its $44.6 billion bid for the search company failed in 2008. Yahoo's value has fallen considerably since then. At the same time, the WSJ's unnamed sources claim that Microsoft's interest is primarily driven by a desire to protect the search-advertising partnership with Yahoo that has helped Microsoft Bing make gains against Google.
While the potential for Microsoft to get involved has been reported previously, the WSJ's reporting brings new details about the specifics. According to the story:
"Under the proposal being discussed, Microsoft would put up several billion dollars of funding, with additional financing being arranged by banks, the people said. Silver Lake and the CPP Investment Board would kick in the rest of the amount, which would be less than what Microsoft contributes, the people said."
Microsoft and its partners haven't decided if they'll proceed. They are also not alone in their interest in Yahoo; the newspaper said at least nine private equity firms have been looking at a Yahoo buyout.
Related:
Posted by Scott Bekker on October 20, 20111 comments
It shouldn't surprise anyone that Stuxnet's authors -- be they in the U.S., Israeli or other intelligence establishments -- are still toiling away to find virtual ways to do real-world damage.
What we do have now is tangible evidence that attackers are using the complex code of Stuxnet as a foundation for other attacks.
On its Security Response blog, Symantec this week posted an entry about a new threat called Duqu:
"Duqu is essentially the precursor to a future Stuxnet-like attack. The threat was written by the same authors (or those that have access to the Stuxnet source code) and appears to have been created since the last Stuxnet file was recovered. Duqu's purpose is to gather intelligence data and assets from entities, such as industrial control system manufacturers, in order to more easily conduct a future attack against another third party. The attackers are looking for information such as design documents that could help them mount a future attack on an industrial control facility."
What made Stuxnet stand out was that it appeared to have as its purpose the destruction of a real-world facility -- centrifuges at an Iranian nuclear facility -- making it the first known code used for real-world sabotage. What made Stuxnet stand out for Microsoft partners was that Stuxnet used four zero-day vulnerabilities in Windows and had at least two stolen digital signatures.
That Duqu seems to be information-collection malware rather than a code missile for causing real-world destruction makes it a more traditional form of threat. That the Stuxnet code is a foundation for future malware is a reminder -- if one were needed -- that Stuxnet won't be a unique event.
Related:
Posted by Scott Bekker on October 19, 20111 comments
Most of the focus surrounding Apple's earnings yesterday is on the dip in iPhone sales and Cupertino's whiff on financial analysts' expectations. It's got to be bracing to Tim Cook that his first two major public events as CEO -- the iPhone 4S launch and the quarterly earnings -- have come across as disappointments. At this point, though, it seems like a hiccup rather than a trend.
In any case, sales of the iPad, and company officials' comments about iPad in the earnings call, continue to validate the market for tablets as business -- not just personal -- devices.
First, the numbers. Apple sold 11.1 million iPads during the September quarter. That's a 166 percent increase from the 4.2 million sold in the year-ago quarter and a sequential gain of 20 percent over the 9.25 million iPads sold in the prior quarter.
The iPad business generated nearly $7 billion of revenue for Apple in the latest quarter, and CFO Peter Oppenheimer said business interest in the device is only increasing.
"It's been just 18 months since we introduced iPad and the pace at which businesses worldwide are adopting this technology is unprecedented," Oppenheimer said, according to a Seeking Alpha transcript of the earnings call. "Today, 92 percent of the Fortune 500 are testing or deploying iPad within their enterprises, up from 86 percent last year. Internationally, 52 percent of the Global 500 are testing or deploying iPad, up from 47 percent last quarter."
Oppenheimer's examples of enterprise iPad deployments included:
- United Continental Holdings replacing heavy, paper-based flight bags with iPads in every cockpit.
- All Nippon Airways using iPads in training programs for flight attendants.
- Sonic Automotive using iPads for customer check-in at the service department and also to provide analytics to regional managers.
- Internally developed apps for field sales teams at Aflac, Biogen and General Mills.
- Siemens Energy technicians taking iPads on wind turbine maintenance jobs.
Apple's iPad results validate Microsoft's intense focus on getting tablets right with Windows 8. There's a business market for tablets, slates or whatever you want to call them. Given Apple's iPad growth and the PC market's slow growth, the pressure is on to get Windows 8 not just right, but right quick.
In the meantime, the opportunity for Microsoft partners to meet customers demands for tablet-based solutions will continue to force them toward the iPad, at least until Microsoft ships Windows 8.
Related:
Posted by Scott Bekker on October 19, 20110 comments
It looks like Microsoft will have a tablet ally in Dell.
Speaking in a press and analyst Q&A at Dell World 2011 this week in Texas, CEO Michael Dell reportedly said, "We are very aligned with Microsoft around Windows 8. You'll hear more about Windows 8 from us and see a wide range of products released" (emphasis mine).
In an apparent reference to the company's Google Android tablet effort in the Dell Streak 7, Michael Dell said, "Android is certainly another opportunity as well, but that market has not developed to the expectations they would have had."
While Dell has been a reliable partner with Microsoft in many areas over the years, the company generally only throws its weight behind the Microsoft products that are going to lead to big revenues.
For example, Dell has become very quiet about its Windows Phone lineup after launching the Dell Venue Pro for Windows Phone 7. During the same Q&A, Michael Dell and other company executives suggested that the company's forays into consumer products, such as the Venue Pro and the Streak 7, are often more like market tests than major efforts.
They suggested that for Dell, the ballgame is the PC market and the corporate side. "Dell is much more focused on providing a complete set of solutions to customers, including the device, but we're not really focused on the device," Michael Dell was quoted as saying.
From that standpoint, a serious Dell push behind Microsoft's Windows 8 tablets has more strategic logic for the company than an Android tablet effort.
Posted by Scott Bekker on October 16, 20111 comments
A recurring theme here at Redmond Channel Partner is to highlight some of the best benefits of the Microsoft Partner Network. We've done that since we started in 2005 and update that info all the time. (See here for a story about where Microsoft caches Internal Use Rights for partners and here for one about how various benefits map to the cost of joining the MPN.)
Which is why we perked up and took notice when Jon Roskill, corporate vice president of the Microsoft Worldwide Partner Group, posted a blog about which of the benefits he thinks bring the best value to partners.
His top tip was to use Internal Use Rights. "Use the software to sell the software," Roskill wrote. "The added value here for partners is that by taking advantage of IURs you can run your business and test compatibility with your solutions, strengthen staff expertise with business and technical training and sell confidently the software you use yourself."
Roskill's other recommendations all surrounded the silver competency, the relatively new MPN competency level that Microsoft has been promoting aggressively for months. His silver benefits list included the expanded number of Internal Use Rights for silver, along with the 20 advisory hours, the support incident five-pack, free technical pre-sales on deals worth more than $3,000, practice accelerators, presentations, demos, financing and training.
Posted by Scott Bekker on October 13, 20110 comments
Has Windows Phone hit the bottom of the trough? Figures released this week by market watchers at comScore could be a good sign for the Microsoft smartphone platform.
Windows Phone faced a challenge familiar to anyone who takes a moderately successful product and sends it back to the whiteboard for a do-over. I'm sure many a PowerPoint presentation projected on many a Microsoft corporate meeting room wall showed optimistic forecasts of Windows Phone being additive to Windows Mobile market share, with overall Microsoft share marching up and to the right in a confident and orderly fashion on the charts.
As often happens, the reality hasn't matched the budget forecasts. Rather than building on Windows Mobile market share, Windows Phone seemed to subtract from Microsoft's piece of the pie. The phenomenon was most strikingly illustrated in the August comparisons by Gartner of Q2 2010 to Q2 2011. Gartner's figures showed Windows Mobile's worldwide share in Q2 2010 was 5 percent, while Windows Phone 7's share in Q2 2011 was 1.6 percent. Looked at by another measure, Microsoft managed to sell about 1.3 million fewer Windows-based smartphones in the quarter, despite a rapidly expanding overall market.
Now come comScore's latest numbers for U.S. mobile subscribers, released this week. They're abysmal for Microsoft, but less alarmingly so than before. ComScore measured the three-month average for the period ending in August and compared it to the three-month average for the period ending in May. While Google rose by 5.6 points of share to 43.7 percent and Apple rose by 0.7 points to 27.3 percent, Microsoft fell by 0.1 points to 5.7 percent of the market.
One of the reasons that it may be OK for Microsoft is that Research In Motion shed 5.0 points of share to hit 19.7 percent -- so Microsoft is doing better than someone. Another is that Microsoft's rate of market share loss is moving in the right direction. Previous comScore reports had Microsoft dropping 1.7 points of share in June and 1.0 points in July, so the 0.1 point loss is downright stable. At the same time, RIM's market share losses have accelerated from 3.7 points in June to 4.0 points in July to the previously mentioned 5.0 points in August.
With the Windows Phone 7.5 updates hitting Microsoft's user base and coming out on new phones in September, the stable market share could be a bottom that Microsoft can build from. Then again, this could just be a plateau before a new drop. Only the numbers will tell.
Related:
Posted by Scott Bekker on October 10, 20113 comments
It is hard to separate the incredible burst of creativity of Steve Jobs' last few years from the illnesses that consumed him before our eyes.
The iPod arrived a few years before the 2004 diagnosis of a rare form of pancreatic cancer and certainly followed a long career of innovation.
But Jobs' post-diagnosis period brought the iterative improvements to iPod that, to cite one small example, spurred my family to buy three in six years, and the breakthroughs of the iPhone and the iPad.
For someone who has said he always sensed death over his shoulder, knowing which of death's horsemen was most likely to catch him appeared to be incredibly motivating for Jobs. While many of us would be frazzled by constant bouts with life-threatening illness, Jobs seemed to find sharper focus and must have come to the realization that his life's work was, even in the end, the most important thing he could be doing.
No matter how inseparable his illness was from his last creative period, though, it's still like they say of the death of the young in war -- it's as if Jobs were doubly dead. We mourn his passing as well as what he had left to give.
The world has lost a visionary who could see a little further into the future than the rest of us and who chose to use that gift to fashion the beautiful things he found there.
Related:
Posted by Scott Bekker on October 07, 20113 comments