Steve Ballmer
Microsoft
1 Microsoft Way
Redmond, WA 98052-8300

Dear Mr. Ballmer:

I am concerned about Microsoft. The last decade has not been good to the company. Sure, it still owns the desktop operating system business, dominates the office suite and makes big money on servers and development environments. But there is something missing. To be honest with you, I think Microsoft has lost its way, it mojo so to speak. And I can tell because the developer community is no longer afraid of you.

Your business is assaulted from every direction. Linux has grabbed hold of IT departments. Google has become the thought leader on the web, destroying you on search and starting to challenge you in office suites. Open source is providing a bevy of development environments, all for free. Firefox is eating away at your dominant browser position. Apple has wrestled design and thought leadership away on mobile devices and laptops. Amazon is winning the race to be the web’s “operating system.” Nintendo outplayed you in game console systems.

Once upon a time, Microsoft was a visionary company. You took a concept like email and incorporated it as one piece in a grand vision to organize and manage personal information. That changed the game and wiped out Eudora, the market leader at the time. I think you can do the same kind of thing now, change the rules of the game and bring computing power to the masses, only this time on the web.

The strategy I am proposing here is perfect for Microsoft as it all relates to your existing businesses. Only this time, it’s on the web:

1. It’s about data. I am end-user and have data everywhere. I have it on cell phones used by everyone in my house and business, I have it on multiple computers, I have it on a personal server, I have it across the web. What I need is someone who knows how to extract all this information, put it in one secure central place so it can all be accessed on the web and on all the devices. Microsoft can do this. And it just so happens that you have a head start: you already have the technology to do this. Exchange works with all kinds of computers, servers and mobile devices. But what we need is not Exchange for IT pros but Exchange for the rest of us. I want to be able to enter an appointment on my BlackBerry and see it appear on our family’s web site calendar and my business calendar and on my business partner’s BlackBerry so she knows not to schedule that phone meeting then. And I want to buy a new song and have it appear on my wife’s laptop without having to think about it. And the same for pictures and video and every other piece of personal information. There’s plenty of money here. And that should make your shareholders happy.

2. It’s about developers. What was amazing about Windows is that it made operating systems useful for all of us, not just the nerds in the IT department. I don’t have to remember obscure keystrokes to make it work, it just works. This time it is not about end-users, though, but about people with ideas, whether they are developers or bloggers or just need to promote themselves. The web is still a bit like DOS. I have to know how to set up a server, databases, load balancing, run-time environments and such. It’s a real pain. And, of course, then I have to keep it running and make sure I don’t run out of server space or bandwidth or… I think you get the idea. I don’t really want to deal with this stuff. I want to create amazingly cool web apps. I want to share my ideas. I don’t want to be a systems administrator, as the current web provider’s require me to be. Microsoft could be the infrastucture for the world wide web, providing a platform for developers who wish to pay (think monthly fees) or don’t (think search placements).

3. It’s about business. It used to be that when you needed an application to run your business, you turned to Microsoft. But this is going to change as apps move online unless Microsoft moves too. Let’s face it, today this web-only approach by Google and others doesn’t work all that well. It’s slow and a little painful to use and I have to worry about working on my spreadsheets on the airplane. What they are really good at, though, is getting feedback on something as the web makes a great place for collaboration. You are uniquely positioned to offer online and offline versions of the products every business relies on. I know you risk cannibalizing your business, but for $50 a year you could charge for Word, Excel, PowerPoint and Outlook, giving users both an online account and the software to load locally on their Windows or Mac computer. Anything I do locally automatically syncs to the server and others — with permission of course — can review and make changes and share their thoughts, wiki or subversion-style, all of which gets synced back locally. Now, I never have to worry about being out-of-date on my software and you have taken a big headache out of my daily life: sharing and soliciting feedback happens automatically.

One thing Microsoft has been amazing about in the past is re-inventing itself. It did this with operating systems, dropping DOS line entry system for a Windows interface. It did this with browsers. This, of course, is a bigger transformation than what the Company has done before. But it’s time, before we in high-tech start thinking about Microsoft like the rest of the country thinks about General Motors.

I hope you will take my suggestions seriously. After all, the last thing we need now is only one behemoth, destroying innovation and taking advantage of small companies. With both you and Google at each others throats, fighting like Mothra and Godzilla over dominance of the web, we’ll all be a little better off.

Godspeed.

Elia Freedman