Microsoft — Innovator Or Aggregator?

Vanity Fair ran a terrific article in its recent August issue, entitled "Microsoft’s Lost Decade." The gist of the article is that since 2000, Microsoft, under the guidance of CEO Steve Ballmer, has fallen flat and failed in most new arenas it’s tried to enter: e-books, music, search, social networking, etc. It also highlights that in recent years, Microsoft has been much more of a follower than an innovator. So it should be no surprise then that at our recent Forrester Research sourcing and vendor management Forums, I found that the one vendor that inspired most discussion, disagreements, and polarized opinion amongst the attendees was Microsoft.

Why? The theme of our Forums was "innovation," and this question repeatedly arose: Is Microsoft ready to take back a position as a leading innovator? It certainly dominates the market, and its huge revenues always cause mutterings of discontent (or is it jealousy?) from others in the market, but when it comes down to innovation — and to paraphrase Monty Python — just what has Microsoft ever given us?

Let me give you a straw poll of comments overheard at our recent Forums:

·         Various operating systems for the fledgling PC market had been around before IBM handed the golden goose to Microsoft to deliver an operating system for its entry into the PC market place.

·         On the desktop, Lotus 123 was the first good spreadsheet and WordPerfect was the first good word processing program. Both were crushed when MS Office came along offering what many at the time thought were inferior products in Excel and Word, but which enjoyed the benefits of being bundled into one integrated suite.

·         Internet Explorer (IE) was not the first browser on the scene, and it only became the blockbuster when Microsoft muscled past its main competitive player Netscape by bundling IE with Windows. Such bundling was subsequently frowned on by regulators who insisted customers must be given a choice, but by then it was too late for Netscape and for the other early browsers.

·         Microsoft only finds innovation by acquiring other companies or aggregating other market ideas.

I could go on, but I think you see where this is going: Microsoft undoubtedly has great business acumen and has made vast fortunes. But is it an innovator or simply an ideas aggregator? I’m of the opinion that Microsoft has been in the innovation doldrums for years, but it has strong potential and smart people, so it’s well positioned to make a “comeback” like IBM did in the 1990s or Apple did in the 2000s. Maybe this decade will belong to Microsoft if only it can do something that dramatically changes the way we work, play, and socialise.

Microsoft has many of the capabilities that are required to take a leading position in innovation:  smart people, great technology expertise, and expert marketing.  But to achieve an innovation status, its leadership needs to show more courage. It needs to break down internal bureaucracies that come with its size and keep investing in new opportunities like the Office 365 product — even if it means cannibalizing existing revenues and changing the way it licenses its products.

Tweaks and enhancements are always appreciated, but it only needs one great innovative product to change the world. Introducing another tablet into a congested marketplace is not innovation. Neither is saying, "Adopt the Cloud," as that’s the mantra of many other companies already.

Come on Microsoft; do something really innovative. Amaze us. Use some of those smart people you’ve got and invest some of those huge revenues you enjoy. Seek out new innovations we can like. Boldly go where no one else has gone before.

Comments

Yes....

I believe that Microsoft is an innovation giant and therefore is both innovator and aggregator. The good news for Microsoft is that it's also a very humble down-to-earth company. Which bodes very well for it's future. Despite Microsoft's prolific success, I don't believe complacency is anywhere near the Microsoft HQ. Quite the opposite.

We interviewed Microsofts CMO in UK and as you can see authenticity shines through.

http://leadersin.com/programmes/philippa-snare-on-what-microsoft-does-to...

Also Mark your spot on about their willingness to cannibalize existing products to bring in the new, we asked Philippa this exact question, here's what she said:

http://leadersin.com/programmes/philippa-snare-on-why-innovative-product...

Hi Anthony, Thanks for your

Hi Anthony,

Thanks for your comments. I agree that Microsoft is not complacent but I'm not convinced of their self awarded 'innovator' badge. Philippa talks about staff having the freedom to pursue innovative ideas when they see them; it's just that we the public don't seem to see much real innovation from Microsoft at the end of the day. Sure there are lots of tweaks and updates that copy others, but no real world changing innovation. As an example of innovation, Philippa mentions the Connect control by using body movements instead of a hand-held controller, but this existed in games available from other companies (such as i-Toy on Sony Playstation) long before Microsoft brought it out.

Back in its early days, Microsoft helped change the world and delivered computing to the desktop. Since then, I've struggle to see real innovation. I wonder if its size is actually holding it back? Sometimes you can be so big and so driven to keep existing revenues rolling that your real innovators don't get heard or find a platform (and funding) to be genuinely different.