Steve Ballmer Steps Down: My Take On The Forces In Play

I don't know Steve Ballmer. I've only met him once. (I've met with Bill Gates more often than that.) But let's face it, he had tremendous impact as a leader. And it's now a good time for him to step aside.

When Steve took over from Bill as CEO of Microsoft in 2000, the company's revenues were $21B and the business was led by desktop software. Under Steve's guidance, Microsoft made massive inroads into enterprise server software and tools while investing but not really winning in consumer services and certainly not in mobile devices. And in recent years, Steve listened to lieutenants like Ray Ozzie and Bob Muglia to turn the Redmond juggernaut towards cloud computing, mobile devices, and software+services.

At the same time, the world has moved faster than Microsoft's licensed software business model could respond. Apple, Google, and Amazon have become enterprise suppliers. Salesforce.com and Amazon are accelerating the shift to cloud computing. Dropbox has grown from zero to 175 million users in five years. So even as Microsoft's revenue more than tripled to $73B in 2012, things didn't feel good.

I think it's a good decision for Steve to step down and pass control to someone else, probably an outsider. Microsoft will then face its IBM or GE moment: Keep the company together or break it apart? Lou Gerstner kept IBM together and that decision had paid off handsomely. Then again, IBM relentlessly focused on a single enterprise market, shedding its PC and other low-margin businesses.

So what's next for Microsoft? I see three forces colliding to drive that decision:

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Mobile Engagement Providers Are A New $32.4 Billion Market By 2018

My colleague and friend John McCarthy and I have just published a new report on the emergence of a new category of vendors we call “mobile engagement providers” that help firms build excellent mobile experiences. I’ll unpack the report in a series of posts over the next few weeks. You can also read a lengthy post in the Wall Street Journal highlighting the report and Forrester clients can read the full report.
 
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Building and delivering great mobile experiences will be the beating heart of your customer engagement strategy for the next 10 years. The challenge of making a simple, intuitive app that fronts a complex system of engagement will stretch the abilities and swamp the resources of most firms. For help, firms increasingly turn to vendors that possess a connected portfolio of engagement competencies and management skills. 
 
The result will be a new market for mobile engagement providers that will grow to $32.4 billion by 2018 (see the Figure 1). No vendor can do all of this today, but suppliers from six categories — digital agencies, management consultancies, mobile specialists, product development specialists, systems integrators, and telcos — are chasing the prize. The payoff for vendors that make this investment will be to earn a seat at your table as a long-term partner in your engagement success.
 
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Wanted: Mobile Engagement Providers

Pal John McCarthy and I published a report on a new category of vendors that we call mobile engagement providers that have a "complete portfolio of engagement competencies and management skills to help you build and deliver great mobile experiences at global scale." This market will grow to $32.4 billion by 2018.

The Wall Street Journal's CIO Journal published this post from us today. It's long, but captures the key points.

I'll have more say later in the week. But for now, enjoy the post on WSJ!

Forrester Wave On The File Sync And Share Market In 2013

File sync and share is the hottest technology category since social networking. Dropbox alone now has 175 million registered users, up from 110 million just nine months ago. Dozens of vendors are going after the business version of Dropbox. There are enough disruptive forces in play -- cloud delivery, mobile devices, and partner collaboration to name just three -- that it's possible for a new entrant like Box or EMC Syncplicity or Dropbox itself to become a major new document collaboration platform.

To help CIOs and the entire industry focus on the right things and create the best short list, Rob Koplowitz and I, assisted by Andrew Smith, evaluated 16 file sync and share platforms on 26 different criteria. We interviewed the vendors and their customers to build a comprehensive view of their solutions and published it in a new Forrester Wave.

Some highlights:

  • We evaluated Accellion, Acronis, AirWatch, Alfresco, Box, Citrix, Dropbox, Egnyte, EMC, Google, Hightail (formerly known as YouSendIt), IBM, Microsoft, Novell, Salesforce.com, and WatchDox on factors like mobile support, security, links to systems of record, organizational commitment, market experience, and deployment architecture to give you the decision tools to create the right shortlist for your particular environment and scenarios.
  • In addition to these criteria, we recommend that you think carefully about whether you can use the cloud (better for mobile support and partner collaboration), whether you want to deploy now with a startup or wait until your next upgrade with a major platform player, and whether you can afford to give every employee a license or subscription to the service.
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The Inexorable Rise Of Nginx And Why CIOs Should Care: It's About Mobile Engagement

The techologist in me loves getting the monthly Web server report from Netcraft.com. Astounding statistics like the number of registered public Web sites (673 million in June, up from 23,000 in 1995) and active Web sites (188 million) put into the context of history shows simply and directly just how penetrating the Internet has become in our lives over the last 18 years.

But I've also been noticing the steady rise of a relatively new open source Web server called nginx (pronounced engine-x) (see the figure below, complements of Netcraft). Nginx is now the number two Web server of active Web sites at 24.3 million sites. For reference, the open source Apache Web server has 101.9 million active sites and Microsoft has 20.9 million. (The numbers always wiggle around a little month to month, so track the trend rather than the monthly changes.)

Figure 1 Netcraft's June 2013 Web Server Report Shows The Steady Rise Of Nginx

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Should Companies Allow Employees To Use Cloud-Hosted File Sync/Share Solutions? Yes, With Precautions.

 

The Wall Street Journal published a point-counterpoint article on cloud-hosted file sync/share solutions like Dropbox, Google Docs, and myriad others. They chose a title I wouldn't have used myself, but there you have it.
 
I took the pro side. You can read the whole article here.
 
My side of the argument is here:
 
Yes: Employees Are Doing What's Best for the Company
By Ted Schadler
 
Why do employees use cloud-based solutions like Dropbox, Box and SugarSync to sync and share files? As well over 100 million Dropbox customers have learned, it's because these services make it a cinch to move files from a computer to a tablet to a smartphone to another computer and back again. And it's a much better solution than email for sharing a bucket of files with others.
 
These services began life with a focus on home scenarios. But it didn't take savvy employees long to realize that these services also solve three big productivity problems at work: 1) getting all your work files on every device you use for work; 2) sharing files with colleagues; and 3) sharing files with trusted partners and customers.
 
So, should IT organizations allow employees to use these cloud-based services? That question is patently absurd. Why should an IT organization dictate what employees do to get their work done? Who made IT responsible for policing employee behavior and tools?
 
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Enough Already With The "Death Of The PC Era" Garbage

(updated 10:10 ET 4/11/2013 for clarity)

The Death Of The PC Era. Pah.

As my friend John McCarthy is fond of saying, "that does not qualify as analysis." PCs, like cars and shoes and dishwashers, are here to stay. However, it is true that PC shipment numbers will decline or be stagnant as people fill out their multi-device toolkits. And some markets may never see the personal computer dominate as it has done in the industrial nations. But few people will abandon their computers altogether.

Let's start with some data and facts:

  • Two thirds of US consumers go online from 2 or more devices, including multiple computers in many cases.
  • 53% of global information workers use 3 or more devices for work. Computers (often two of them) are front and center in this statistic.
  • Computers wear out. Just as cars and shoes and dishwashers do. Intel & Microsoft brilliantly played a planned obsolescence game for decades: Bigger software needed bigger chips, which ran bigger software. Intel & Microsoft made billions. People got better tools. But even without this planned obsolescence, computers get tired.
  • People want the best tool for the job. Typing a blog, running a spreadsheet model, creating a presentation, closing the books, surfing the Internet are all (still) easier on a computer than a tablet, LapPhablet, smartphone, or TV. (Though checking for rain showers with Dark Skies or playing Words with Friends is better on a mobile device.)
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Enough Already With The LapPhablet Straddle -- The Future Is About Specialized Devices

Mature markets thrive because of specialization, not in spite of it. Think of shoes. How many pairs do you own? How many do you really need? Or kitchen pots. How many pots do you own? How many do you need? Or cars. How many different types are out there? How many do we really need?

The answer is, as many as they want to make. We want specialty shoes because there's a real difference between road biking shoes and mountain biking shoes. Between brown shoes and cordovan shoes and black shoes. Between dress shoes and party shoes. And those differences matter. Riding 35 miles in your dress shoes makes no sense.

And we want the best pot for the polenta or risotto or Bolognese we're making. We want the car that best suits the way we drive and live and schlep stuff. We want the right tool for the job. The same is true for computers or tablets or smartphones. We want the right tool for the job.

Source: Hallomall.com

When you show me a spork or a rubber soled dress shoe or an El Camino, I think, "that's neither spoon nor fork, neither practical nor dressy, neither car nor truck." So when you show me Windows 8 on the new Dell XPS 12, I think spork, not specialized. It's a straddle. And straddles don't win.

The future of devices (call it post-PC if you like; I just think of it as the right tool for the job) is specialized: the right tool for the job, and a steady evolution to the right tool. The logic is simple:

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What Is Your Mobile Engagement Communications Strategy? A List Of Symptoms & Request For Help.

In our research and in our work with clients on their mobile intiatives, one problem comes up again and again: the very people the app is designed for don't know what it does or why they should use it. Here are some symptoms of a communications gap -- and they show up just as frequently in employee projects as they do in customer initiatives:

  • Your target audience doesn't know why they should use the app you've given them.
  • Your call center or help desk is inundated with basic questions.
  • Your key stakeholders are forever pinging you to find out what's going on.
  • People in the company don't know what you've been up to.
  • You don't know what your target audience really needs from the app.
  • When people get a new or updated app, they don't use the new features.

If any of these ring true for you, then it's time to implement or re-evaluate your communications strategy. We'd like to help, which is why we are initiating a research project into communications strategy for your mobile initiatives. My colleague Simon Yates and I are diving into this important topic to publish new research findings to help you build the most effective communications strategy.

You can help us by completing a short survey on your own communications strategy. You'll get a summary of the results and can ask for a conversation if you want to dig deeper with us.

Thanks for filling out this 3-minute survey on your communications strategy!

Skype + Lync and Microsoft Skype President Tony Bates' Coming Out Party

Sadly, I'm not in San Diego this week to hear Tony Bates' keynote coming out speech in person. (Well, happily, actually, as I'm skiing with family in Vermont -- great snow today!)

But I do have context on this announcement as I've been analyzing both the consumerization brand, Skype, and the enterprise brand, Lync, for years now. When Microsoft did the Skype deal going on two years ago, I posted on Microsoft's opportunity to bring Skype values to Lync customers and deployments as it has acquired a consumerization brand, a cloud service to sell, and a chance to do B2B communications properly.

At a glance from afar, it looks as if almost two years later, Microsoft under Microsoft Skype president, Bates, has kept its eye on this prize. What I see from Vermont is that Microsoft is in fact:

  • Re-humanizing business communications, a good and much-needed thing. (Okay, I like the phrase re-humanizing. It must stem from having played rock n' roll fulltime in the Police-laden "rehumanize yourself"'80s.) If people can't easily use the tools, then they won't bother. This is the essense of consumerization: people using readily available and affordable technology on their own to get work done. Microsoft appears to be understanding and focusing on the consumerization values of Skype. We'll wait to see the Lync-meets-Skype experience, but it sounds good on paper, anyway.
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