The Great Microsoft Decoy

I’m sure everyone’s heard about the now infamous, leaked (*cough*) Microsoft memos. At first glance, it’s a huge validation and a victory for grassroots, platform-agnostic development. Microsoft is actually worried about being perceived as irrelevent by this wave of application “services” that are rendering the buy/download/install/update model archaic.

Soon after Mark Lucovsky jumped ship from Microsoft to Google, he wrote a well known post about how Microsoft has forgotten how to ship software. It may not have resonated then, but it sure as hell is resonating now.

Are we really headed for an advertising-driven world where you just “visit” applications hosted on different URL’s? Are the days of shrink-wrapped CD-ROM software coming to an end?’s Marc Benioff seems to think so. The status quo, according to many, is about to face a very serious challenge.

Digging a bit deeper though, I can’t help but be a bit skeptical about the true sincerity of these memos. I do think Microsoft has work to do to re-establish themselves as a player in a newly-formed space. It’s a perception problem, and they can fix that. Just as they positioned themselves to battle Netscape years ago, they’re being asked to rally the troops yet again.

When Netscape posed a “threat” to Microsoft, they shifted a massive number of resources and relentlessly focused on Internet Explorer. Eventually, IE actually became a better browser. More importantly, it was free. It helped Microsoft re-establish itself as a viable player. But IE was just a means to an end. All the while, their real cash cows were making…cash: Office, SQL and other server products, and of course, their operating systems.

And now, the alarms have been sounded again. According to Gates and Ozzie, Microsoft is about to be challenged yet again and they need to reinvent themselves yet again.

Or do they?

Looking back on the Netscape battle, Microsoft didn’t reinvent itself at all. It simply responded to a perceived threat, crushed them, and then returned to business as usual: making licensed software. IE never showed up on their bottom line. It was a means to an end. It enhanced perception and provided upsell (sort of) to the real money makers.

The story today is that their actual core business, licensed platform and application software, is being threatened by this wave of ad-supported services sent over the wire.

I’m just not buying it. Here’s why:

  • “Who Said I Want To Download A Word Processor?” The real tangible value of delivering applications over the web, beyond the “wow” factor, is actually pretty limited. While it’s cool to play with a word processor-like application in a browser, it’s real value isn’t in how it was delivered. Once you “download” that applicaton, how often is it going to change? Not very often. While installing an Office suite is a bit annoying, you only do it once. The real value lies in where your data is stored – centrally. A rich application to consume that data, while cool to have delivered seamlessly over the web, isn’t that big of a deal. FeedDemon is a great example of this marriage. It’s a Windows application that syncs up with Newsgator services to keep your feeds’ status (read, unread, etc.) intact no matter where you are. The sweet spot is rich, client applications nicely wired to services. And rest assured, Microsoft is going to make sure it nails this one.

  • “My Desktop Looks Like Times Square.” Would you tolerate ads on your desktop? On your spreadsheet application? On your word processor? Even on your chat client? I wouldn’t. I’m ok with ads living in a browser and out of my life. As desktops and devices
    become directly wired to services, the need to go to a URL in a browser to do things is going to diminish. The URL Destination as we know it is going to become less relevant. As it should. We can create more seamless experiences if we can inject data into the right places rather than just the browser. But where do the ads go?

  • “My Stuff Is Stored Where?” While few would doubt the convenience of having your data centrally stored, many will not tolerate it. For businesses that value their data, that option simply isn’t viable (and an enormous chunk of Microsoft’s revenue comes from those businesses). Beyond where it’s stored, the notion that this data will be combed over so a service provider can generate relevant ads is a bit…well…creepy.

  • Um, enough with the maps mash-ups already” I like maps. I like how they zoom and stuff. Google Maps is great. Yahoo Maps is even better. And people are doing some pretty cool things with them. But let’s relax ourselves folks. Beyond the fun/geek factor, what are we supposed to do with all this? I commute from home to work in New York City. I can only stare at the bus schedule in Vancouver for so long before I conclude “Ok. Now what.” What other “mash-ups” are out there that don’t have anything to do with maps? Even more importantly, how are they useful to the general user population (and no, that doesn’t include people who go to Foo Camps and Bar Camps and Hyper Camps).

Looking back on the memos, I can’t help but feel that Microsoft is snickering at us as it joins this party. They know the difference between hype and making money. They also know the value of making sure they are never perceived as becoming irrelevent. One thing Microsoft knows how to do well is adapt.

Beyond Microsoft though, I think it’s important for the community in general to stay focused on what reallv matters: creating rich, intuitive experiences that are less about technology and more about delivering value. We’ve stumbled on a great set of tools in our hands to do some awesome things. Let’s not screw it up (and that goes for you too Microsoft).

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