The Next Decade For Microsoft

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Two days ago I was talking about products soliciting strong opinions. A decade ago Microsoft was an opinionated company. People loved to hate them and other people were in love with them. Just the mention of Microsoft could solicit a fight among friends. But the last decade hasn’t been kind to Microsoft. As the market fight has shifted from desktop to mobile, the world has stopped talking about Microsoft. Marco Arment said something quite profound about the difference between the two companies:

Apple’s products say, “You can’t do that because we think it would suck.” Microsoft’s products say, “We’ll let you try to do anything on anything if you really want to, even if it sucks.”

Enter Windows 8. Enter the Windows 8 RT tablet. Enter the punditry suddenly discussing Microsoft again. In fact, it isn’t just the technorati discussing them. I haven’t heard this much discussion of Microsoft among the Apple community in ages.

Here’s the bottom line for the new Windows tablets: they are worth a discussion. The devices are interesting, the keyboards are interesting, the development tools are interesting. It is the first Windows computer in 10 years that would make me look twice at Microsoft’s world.

The Apple community wants to make this a battle between Apple and Microsoft, between Windows 8 and iOS. But that’s not what Microsoft is doing here and I understand that completely now. For Microsoft this is a battle between Windows XP and Windows 8. This is a battle between the old world of CRT monitors and the modern world of portable computing. Windows 8 is meant to be the next generation computing device for the 1 billion Windows installed base; not the competitor to 100 million iPad and Mac computers. It doesn’t need to have a million apps today and doesn’t need to have the perfect Office installation. It needs to have enough to keep people paying attention, talking about Microsoft, and make those who were going to upgrade stay with Microsoft.

Window 8 RT is a very interesting device. It does more than enough to make those who primarily want a notebook computer pay attention. I think it is going to be a big success and will keep Microsoft among the technology elite for the foreseeable future.

Searching For A New Doctrine

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The election is tonight and many of us will be watching the outcome with baited breath. I, for one, don’t care all that much who wins. It’s not because I’m not political and could care less about the process. It’s that, with minor differences, we will get a president that is in the mold of the past 9 or so presidents and I feel what we desperately need is a new framework to think about the country.

The current frameworks were put in place in the 1960s. The way we think about economic issues and social issues were almost all formed in that time period. But that was 50 years ago and nothing about this world has stood still. Yet we keep spitting out politicians who look an awful lot like Lyndon Johnson and Barry Goldwater.

So I spent the last months listening to President Obama and Governor Romney, hoping to hear a hint of breaking with the past. I haven’t heard it. So for four more years we will fight the same fights again with the usual cast of characters.

And that’s why Clayton Christensen’s article in the New York Times from Sunday jumped out at me. In it he outlines a way of looking at the economy, rethinking the tired approaches that are no longer working, outlining a plan to invest in the areas of the economy that will fuel growth for the next generation of Americans.

The Doctrine of New Finance helped create this situation. The Republican intellectual George F. Gilder taught us that we should husband resources that are scarce and costly, but can waste resources that are abundant and cheap. When the doctrine emerged in stages between the 1930s and the ‘50s, capital was relatively scarce in our economy. So we taught our students how to magnify every dollar put into a company, to get the most revenue and profit per dollar of capital deployed.

But we’ve never taught our apprentices that when capital is abundant and certain new skills are scarce, the same rules are the wrong rules. Continuing to measure the efficiency of capital prevents investment in empowering innovations that would create the new growth we need.

It’s as if our leaders in Washington, all highly credentialed, are standing on a beach holding their fire hoses full open, pouring more capital into an ocean of capital. We are trying to solve the wrong problem.

I’m not pessimistic about it. It is what it is. But it’s going to take a new generation of thinkers to unstick us. I’ll continue looking for those people to emerge.

Opinionated

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I received an email from a friend yesterday who was testing our Android version of powerOne. He was effusive about our templates but felt our RPN implementation was lacking, preferring the way the HP calculators did it. Our approach isn’t that different but he is used to their approach so when it came to pure calculator functions he used a different product, but always switched to ours for anything template-related. Some people love our RPN and calculator implementations; others don’t.

It reminded me once again how important opinionated products are. RPN, because of HP, was like that. Some people loved it and some people hated it but few were indifferent. Apple is really good at this, too. To some, Apple’s products are over-priced pieces of garbage that force you into someone else’s way of doing things. And to others they are minimalist products that generally just work. Apple’s products aren’t for all people, they are for some people, and Apple is very clear about this distinction.

That’s the holy grail for every product really. If it isn’t soliciting an opinion — a very strong opinion — than it probably isn’t doing much in the market. The problem for apps is when they cost $5 ($3 to the developer) there isn’t much room to market and sell. App stores are self-reinforcing anyway. The better you do the easier you are to find. So word of mouth is critical. And no one talks about products they don’t have a strong opinion about.

Indiana Jones Denied Tenure

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According to Timothy McSweeney, Indiana Jones has tenure problems:

Dr. Jones:

As chairman of the Committee on Promotion and Tenure, I regret to inform you that your recent application for tenure has been denied by a vote of 6 to 1. Following past policies and procedures, proceedings from the committee’s deliberations that were pertinent to our decision have been summarized below according to the assessment criteria.

I guess he can always go to work for Disney Corporation.

The Law of New Media

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Horace Dediu writes about the law of new media: “Once you change the method of distribution, the product has to change.”

Fundamentally, you can’t move an existing media to a new network. You have to think of it as a deeply rooted-in system, and it’s just not going to like moving to another environment. You have to uproot this huge tree, and it just won’t come out and if it did it will not take root in a new place.

The only way to create this new value network around new distribution is to plant a new tree.

I have never seen it put this way before but makes me think about all the products that were dominant in the PC era, of which handhelds were literally just a shrinking of, to today’s world of ultra-connected, always on, pocketable computing. How do products like Word and Excel work in this new world? Is Google’s strategy of moving very similar copies into the cloud resolve the “product change” problem? How about using them on tablets and smartphones? The same UI, as Microsoft is proving with Windows 8, doesn’t work. Do these products need to be re-invented from the ground up? Or are the products fine but need a different business model?

When I say “shrinking,” by the way, I don’t mean this from a product design perspective. I mean this from a distribution and business model perspective. Handhelds were sold the same way PCs were sold and handheld software was basically sold the same way desktop software was sold. This began to change with the rise of cellphones and smartphones, starting with the carriers taking control of both and eventually app stores dominating software sales. The method of software distribution has changed.

When I read Horace’s best work, I’m often confronted with more questions then answers, not just about the technology market but specifically about my own business. This post resonates with me very strongly.