September 21, 2007

thoughts on microsoft


[A view from the London Microsoft offices, taken earlier today. Westminster Cathedral in the background, McDonald's in the foreground. N.B. I first ate at this McDonald's when I was twelve years old, with my dad and my sister, the first time I ever visited London. We stayed in a hotel just up the street, so every time I'm in this neighborhood the memories come flooding back to me, for this is the first neighborhood in the city I became familiar with. Somehow visiting Microsoft today seemed to make everything come around full circle, from that Big Mac & Fries all those years ago.]

I was visiting some folk at Microsoft UK today, talking about all things to do with Blue Monsters and social objects. I even brought along a bottle of Blue Monster wine. Though I can't talk about what the meeting was about, here are some general thoughts I came away with, in no particular order:

1. "Agents of Calcification". This is a rather snarky term I recently coined to describe the folks in a big company- any big company, not necessarily Microsoft- whose role isn't to invent, make, or sell stuff, but to maintain and enhance the apparatus of bureaucracy, even at the expense of the business itself. Though these agents can serve a legitimate organizational purpose, when any company has too many of these people, you sadly end up with this cartoon [i.e. a "Big Lump o' Death"]. The bigger the company gets, the more energy anybody trying to get anything interesting done will have to spend, trying to navigate around these folk. These folk are why I never take on salaried positions at big companies- I've never been very good at handling them. Despite what Frederick Winslow Taylor may have said, people are not machines. Form NEVER follows function.

2. The Blue Monster came from a simple observation I made early on in my career as a Microsoft watcher: That most people I've met who work there could be making more money elsewhere, and taking a lot less grief from the general public and the media. So what motivates them? The answer to this, in spite of all the baggage that comes with it, is what makes the company so interesting for me.

3. So what happens if the Simon Phipps's of the world are right? So what happens if the future of software is indeed Open Source? How will Microsoft keep its shareholders happy? What if this recent article is right, and the unavoidable future is free software, and paid software is an equally unavoidable thing of the past? What then? Who has the answers? Do the answers actually exist yet? [N.B. I had the distinct pleasure of meeting Simon Phipps this summer at a dinner party, and I found him delightful company. Though his job is working with Open Source at Sun Microsystems, he also had a lot of nice things to say about Microsoft. A true gentleman.]

4. Are people [both inside and outside the company] ready to start seeing Microsoft not primarily as a software company, but as a media company? And if Microsoft's business model turns away from paid software, towards advertising and free software, who will be the winners? Who will be the losers?

5. Calling Microsoft "Evil" is too easy. An adjective used by the incurious and intellectually lazy.

6. I find it re-assuring that most Microsofties I meet don't seem too phased by the fact that I use a MacBook, not a PC. As Bill Gates said recently, "We like Apple, they buy a lot of software from us."

7. A few weeks ago, I was having lunch with somebody very high up the global Digital Advertising foodchain. He was telling me about how once he was pitching for a ten million dollar account with a large international client. The client basically said, "I love the idea. Let's do it. But... can you scale it to a hundred million dollar spend?" My friend sadly had to confess that his idea did not scale that large. My takeaway: Advertising clients are lining up to give talented folk their money. The only problem is, this brave new world is still in its infancy, much the same way TV advertising was in its infancy fifty years ago. Unlike traditional advertising media, demand for services exceeds supply. There lies the opportunity, but even the smartest minds in the business are still having a hard time figuring it out.

8. Though Google may be a fierce competitor of my friends in Redmond, in many ways what they're doing actually makes Microsoft's job a whole lot easier. Google broke a lot of ice when it came to creating a viable mass market for advertisers [understatement]. Thanks to Google, people ARE willing to spend money on online advertising in a way they simply weren't before AdSense came along. If Microsoft [or any other company] can add something to the party, with ever more increasingly sophisticated offerings, they stand to gain on a massive scale. The clients are there, ready and willing to spend the big money. But now the onus is on Microsoft et al to provide a good enough reason.

9. As wonderful and interesting as "Web 2.0" has been to both me and a lot of my friends, the fact is, again, it's still early days. Again, even the smartest people I know in this space have little idea about what's going to happen next. Again, like TV advertising in the 1950s, we're basically making it up as we go along. But that's what makes it so exciting.

10. I still happily stand by what I said about Microsoft, late last year:

For too long, Microsoft has allowed other people- the media, the competition and their detractors, especially- to tell their story on their behalf, instead of doing a better job of it themselves.

We firmly believe that Microsoft must start articulating their story better- what they do, why they do it, and why it matters- if they're to remain happy and prosperous long-term.

Let me put it another way: The future of Microsoft, and how Microsoft talks to people in the future, are one and the same. Yes, Virginia, the future of Microsoft is "Conversation."

Posted by hugh macleod at September 21, 2007 5:32 PM | TrackBack

The Cluetrainian conversation is not about who Microsoft imagines themselves to be, it is about who they really are. This is defined by their *behavior*, not just "how they talk to people".

When Microsoft "tells a story" --one that they no longer allow others to tell for them-- the result is not a conversation.

It is a soliloquy.

Posted by: Maggie Leber at September 22, 2007 12:19 AM

If you get TOO literal, Maggie, you kinda start missing the point. How one communicates and how one behaves are actually quite related.

Secondly, I think it's rather naughty of you to keep coming in here, naysaying Microsoft, without disclosing your professional interest in Sun Microsystems

Posted by: hugh macleod at September 22, 2007 12:32 AM

Lovely post Hugh. I expect it will be read and forwarded by a lot of people and I'm quite sure it will be some kind of really cry for those Microsoftians who want to be part of an internal revolution that changes the inside and outside environment.

Posted by: Damien Mulley at September 22, 2007 12:42 AM

Visual Studio 2008 Beta2 Professional is available. We use this tool to make software. This is how we eat. Any other conversation is irrelevant.

Posted by: Dave Armstrong at September 22, 2007 12:47 AM

Chris Brogan recently wrote about the furor over Microsoft's signing up to attend PodCamp Boston. There is, undeniably, a nameless, unreasoning, but only half-unjustified fear towards them and everything they do. The truth is, Gates et el. have, since their garage days, never really been comfortable with the idea of Open Source (see "Open Letter to Hobbyists"). This stance has always seemed strange because of how much of their early successes came from, essentially, selling to consumers what geeks were trading for free. If this stubborness does them in, then it's their own fault. However, just as they don't mind you using a Mac, their enemies certainly don't seem to mind using--and bootstraping off of--Microsoft products. And it's also undeniable the tremendous force for good the company has been in creating/wiring the world we now live in, this just wouldn't have happened if computers had remained the sole domain of University Clubs and purist coders. In the end, they're going to adapt or die, but if it's the latter, I wonder/fear what will happen to all the great-minds their currently nurturing.

Posted by: Seth E at September 22, 2007 1:50 AM

My big clients are dropping big money into the 2.0 space now. Not all, but the bolder ones are. Last year they were just dipping their toes in. And the strategies include internal resistance. It's the wild west.

Posted by: BAM at September 22, 2007 2:53 AM

Finally, someone who talks about Microsoft with a little respect, if not with a little sympathy, and inspiration.

"Two Thumbs Up", on this post Mr Macleod. With the world the way it is today, it is hard to find anybody who talks "good" about anything. Especially about Microsoft as it is seen as the "Great Satan" of American capitalism. And while I myself, am not a great fan of Microsoft. I am a fan of this post, and of your attitude, and do intend to promote both. (with your permission, of course.) TD

Posted by: The Trash Dispatch! at September 22, 2007 5:31 AM

This post is really helpful, Hugh - not least for the fact that I walk down that street every day, and had no idea that the Microsoft Offices were there!

My studio is round the corner in Great Peter Street (near Channel 4) - drop in, if you're ever around...!

Posted by: Mike R at September 22, 2007 8:48 AM

I'm kinda torn on this one. There seems to be no way for large corps (whichever they may be) to overcome the calcification you talk about. I use a different term when thinking about how this manifests itself in the real world - crap telco/ name it service: in need of angioplasty. Amounts to the same thing - a furring up of the arteries that prevents all sorts of simple thing (well I think they're simple) to happen.

On the Evil Empire schtick. That one's dead and not quite buried. MSFT still manages to banana skin itself in lots of ways and because of its past will catch an emotional response. Long may that continue. But I'm wondering whether the company hasn't leaned too much the other way and is afraid of its own shadow.

On the face of it, your solution sounds simple but then MSFT has so many legs, it's like trying to get your arms around a centipede. It has multiple stories and one kind ain't going to fit all.

But of one thing I am sure - MSFTs future is not ad networks alone as is implied here. Totally misses the open source point. Only an ad man would believe that. (Hold this as a prediction with which to shoot me down later.)

Posted by: Dennis Howlett at September 22, 2007 5:01 PM

Secondly, I think it's rather naughty of you to keep coming in here, naysaying Microsoft, without disclosing your professional interest in Sun Microsystems

Not the first time you've impled that the fact that I'm a Java developer these days (about 1/3 of a 35 year career in computing) somehow creates an impeachable interest in Sun Micro.

The fact is that me doing engineering using Java technology doesn't marry me to Sun any more than it marries me to IBM, BEA, Teracotta, Jetbrains, Thoughtworks, TIBCO, or anybody else who's part of the Java community... (see: )

That's not so true if you build with Microsoft tech...which is kind of the point.

It's true that how one communicates and how one behaves are *related*. But your claim seemed to me to be that they're identical...and they're not.

Changing the story you tell (or who you "let" tell if that were really under your control) doesn't really significantly change who you are, whether you're cartooning in a bar or number 49 in the Fortune 50.

On the other hand, genuinely changing who you are will inevitably change your story, unless your story is totally disconnected.

One vital aspect of corporate behavior is how the overt corporate message meshes with the overall behavior. If there's a disconnect, the real Cluetrain conversation will mercilessly shed light on it.

The salient characteristic of a conversation is that there's more than one participant. Cutting people *out* of telling the story if they're not *in*side the corporate walls or singing from the company songbook (*) is the exact opposite of what Cluetrain says is inevitable going forward.


So, if we're doing disclosure here, I'll paste my professional email sig...Facebook or Linkedin would tell anybody as much.

Margaret Leber CCP, SCJP, SCWCD

(* -- IBM used to actually have a company songbook back in the day, but after MSFT cleaned their clock in the marketplace back in the 90's they learned a lesson or two)

Posted by: Maggie Leber at September 22, 2007 7:33 PM

"So what happens if the future of software is indeed Open Source? How will Microsoft keep its shareholders happy? What if this recent article is right, and the unavoidable future is free software, and paid software is an equally unavoidable thing of the past? What then?"

Open source remains the greatest opportunity Microsoft has. It something they could embrace, if only they had the imagination. It's not about "free".

But there is a problem with their conversation. The culture is set from the top of the org. If the top of the org refuses to have the conversation, then it will always be broken:

Oh -- and full disclosure. I've worked 27 years. Five of them were for Microsoft, leaving 3 years ago. I consult now, and they are a client.

Posted by: Stephen R. Walli at September 23, 2007 5:45 AM

Hi Hugh

I love the idea of Microsoft people sitting around chatting with you about the web with their latte but here is a little reality check they may wish to discuss.

In the UK its search query market share is below 4% i.e irrelvant compared to Google's 67% - fact

In the US it is 7% and falling - fact So having the best ad serving technology platform is pointless if now one uses it.

When was the last time you used to search for anything? Equally even if you do its result relevancy compared to Goolge and Yahoo is worse - fact. Try it?

Microsoft cannot even decide on its own internet brand. Is it OSG (Group name), Live(.com), Microsoft (Ad Center) or MSN(.com) - check all exist. Maybe the first Microsoft conversation should be what is our brand and who is our customer?

The second conversation should be why are we even in this business given Microsoft has five (very old) cash cows - Windows, Office, Enterprise, Dev Tools and Xbox the internet side of the company is not a rising star but a big fat question mark (using the BCG Matrix terms) which needs billions even to jumpstart it.

So if you or anyone else thinks Microsoft is about to go opensource or give software away for free supported by ads you really have no idea how Microsoft actually works.

They are making record revenue returns (5 times that of Google) from selling license upgrades to their enterprise/legacy customers. Google is not even in this enterprise marketspace, so why would they make it free.

The real conversation and the only one that matters is in Seattle between Ozzie and Ballmer, the new v old and while Ballmer remains top dog the old wins and that means enterprise. Ballmer even said Microsoft's biggest competitor is IBM not Google.

Microsoft is no longer evil, it's more like a toothless confused old granny not sure which way to turn. Little Red Riding you are save in Seattle.

And finally Hugh on disclosure I cannot see anything about your paid relationship to Microsoft or the benefit you are getting for Stormhoek by working with Microsoft.

Disclosure: I worked for Microsoft and MSN in the past.

Posted by: Sam Sethi at September 23, 2007 11:17 AM

Sam, I have no paid relationship with Microsoft, at time of writing. I do this because it genuinely interests me. As for how it benefits Stormhoek, who knows.

Posted by: hugh macleod at September 23, 2007 11:23 AM

I work for Microsoft (so no-one gets upset about my point of view). I also work for my partners and until very recently, very actively in the small business and regional development communities.

I agree that MS has many feet and that trying to tell a "One Microsoft" story is almost impossible, but how would you describe many other large organisations. Is Google telling people it is just advertising, or search, or office apps.... Is British Gas just a Gas (or even Energy) supplier?

However, many people only tell stories on one half of Microsoft - the dirty laundry half. Most big companies do some things which others do not like. I remember working with some reporters from one of the world's most respected news agency. They told me they loved a story that kicked Microsoft - it tripled their readership. They didn't like "good stuff" from Microsoft as it had no impact.

I was recently at a charity dinner and when I asked one reporter if they would report on the good work of MS that evening he said "why? Everyone expects them to be doing good stuff... it isn't news". I think this is the lack of balance that Microsoft needs to correct in it and others telling the story.

Yes MS has many business units and sometimes they step on each others toes. So what! Given that no-one knows what the future holds sometimes you need to try a couple of different approaches and see which one works. You can't always plan these to not overlap, so you have to accept it or only ever try one thing.

Sun used to say their success was "all the wood behind one arrow" - Microsoft has never been that and perhaps its ability to not end up in a niche like Sun shows the difference between the two organisation.

Microsoft, like most companies wants people to use its software and get paid for it, like almost any business that produces open source software - they still need to pay the bills! Even the good and great IBM makes 10's of billions from software and not long ago announced that it made billions from open source, so while some say it is the future, all it does is change where the money goes, not the fact that people pay for it one way or another.

Finally, MS has always had millions of lines of code available to developers (MSDN, Codeplex, Software Development Kits) and strongly supports them in their efforts - open, shareware or commercial. If the MS tools are not worth the price, people wouldn't buy them.

I often find that people are amazed that I "help" people because I like doing so AND I work for Microsoft - as if the two were not possible. This perception needs to be made more honest to reality.

Finally, on the calcification inside an organisation - in a previous company we used to call them the "order prevention team". I see the biggest calcification inside any business being its previous success - it often ends up being the competition against new ideas, but as has been stated, Microsoft needs to either accept the new world or go home :-) Having said that, since most of Microsoft's success is through development and implementation partners, unless they are brought on the journey, nothing will happen. I see Microsoft giving fair warning to partners that the change is coming... and I see Microsoft partners responding and using the newer MS tools to help re-tool their business. If both groups get it right, the market is in for a tough time trying to stop 750,000 Microsoft partners and great products from winning through. That is a very large IF though.

As always a great thought prevoking blog posting ... some day I will get to writing about you on my blog and some time I will get Mr C to introduce us :-)



Posted by: David Overton at September 24, 2007 12:55 PM

Wow, people who end their points with Fact remind me of the youth wings of political parties. Point of order!!!! Jeez Sam.

Posted by: Damien Mulley at September 24, 2007 4:25 PM

Point taken Damien I was trying to counter the fiction but realise it may not have read well.

Posted by: Sam Sethi at September 25, 2007 3:05 AM

Point 1 definitely rings true for me, working for a large organisation as I do. My first manager once told me that people trend towards one end of an axis: employer or employee. You strike me as very much at the employer end of that axis hugh, hence your concern about working within such a behemoth.

Those "agents of Calcification" are at the extreme of the employee end - maintaining their own existence through what they perceive is maintaining the mother ship.

On a separate point @ Sam - Xbox as a cash cow?? I don't know much about the issue, but Microsoft's Devices division lost $1.89 billion last year.

Think the question about why they are even in the business might be pertinent here too?

Posted by: Robin at September 25, 2007 9:14 AM

Nice to see all this vigorous debate going on [which, of course, is all part of my evil plan buah ha ha ha ha...].

Posted by: hugh macleod at September 25, 2007 12:07 PM


I'd like to ask what's bad about working for Sun Microsystems and expressing an opinion about Microsoft?

Disclosure: Unlike Ms Leber, I *do* work for Sun Microsystems and have done so for 15 years, and I am not aware of Ms Leber being an employee ever - albeit that her website exhibits a Sun logo by dint of having once sat a Java Certification course.

That no more constitutes a "professional interest" than my having attended a BMW motorcycle servicing course means that I have a professional interest in BMW.

So I would like to ask: what's the beef with occasional Microsoft-naysayers?

And [especially if it were the case] why should being from Sun be a disqualifier from having an opinion?

You know that the two companies are good buddies nowadays?

Posted by: Alec Muffett at September 25, 2007 5:44 PM

Let's assume that even if history doesn't repeat it sure as heck rhymes nicely.

After a year of almost total silence from Ozzie and almost nothing to visibly show for his leadership plus Gates purportedly a lame duck (does anyone believe that?) the only way this mother changes is by doing the equivalent of an IBM or a GE and bringing in someone with brass balls and a sense of destiny.

To @Sam's point: Don't you think that conversation was done and dusted a long time ago? Ballmer won. Watching his performance at Convergence was cringeworthy in the extent to which the man is out of touch with anything other than milking the cows.

Viewed in that light, Hugh's message is more or less on target though I'd likely rephrase it.

Posted by: Dennis Howlett at September 26, 2007 3:32 AM

Thank-you for the kind words, Hugh. I've a long record of association, observation and then competition with Microsoft, and it's my conviction that they need to rapidly transition to a position of peace with the concept and community of open source since it is reaching its "tipping point" because of the emerging dominance of the non-US market for them.

I've spent three years trying to make Sun behave in ways that make the community-of-communities trust Sun; it seems to me this has not yet become a priority for Microsoft.

Also, unlike Alec, I wouldn't use the word "buddies" of Sun and Microsoft yet. I'd rather say they have moved to a position of communicating via market-standard co-opetition rather than via the courts.

Posted by: Simon Phipps at September 26, 2007 4:15 AM

I have worked as a consultant with Microsoft and seen great products developed by samll teams like Windows Home Server and other products developed by large teams with lots of problems. I have been disappointed with Vista, speciifically support HD video editing and photography and will but a new MacBook Pro when next OSx ships. I will still have XP pro and Vista computers and dual boot with the Mac. I think you bring out some important issues in your post and that MSFT success in the future will require rearchitecting how they work together and build great products. Thye need to create more teams like Bungee and set the innovation of smart employees loose in smaller nimbler teams..

Posted by: John Clifford at September 26, 2007 4:34 AM

Kudos to Sam Sethi for this line: "They are making record revenue returns (5 times that of Google) from selling license upgrades to their enterprise/legacy customers", wherein lies the problem, I think.

Microsoft does not talk to people because people are not it's customer. People do not go to the shop to buy Microsoft software, they find it preinstalled both at home and at work.

But thanks to internet, people is being upgraded from "user/consumer" to "client/player": they have voice and power, they pretend.

My two cents: Microsoft seems utterly unprepared to face that. But I wish them good luck, of course.

(disclosure: I use MSFT software for a living)

Posted by: Gaspar at September 27, 2007 9:54 AM