Ozzie's memo, titled Dawn of a New Day, describes the challenges he believes Microsoft faces in the next five years and beyond. The core of those challenges, he writes, is that we're entering a "post-PC" world, in which mobile phones, tablets, "appliance-like connected devices," and Web sites and services are key, while PCs and big, client-based programs are of secondary importance. He writes:
As we've begun to embrace todays incredibly powerful app-capable phones and pads into our daily lives, and as we've embraced myriad innovative services & websites, the early adopters among us have decidedly begun to move away from mentally associating our computing activities with the hardware/software artifacts of our past such as PC's, CD-installed programs, desktops, folders & files.The problem for Microsoft is that the biggest chunk of its profits come from those "hardware/software artifacts of our past" --- Windows and Office. Microsoft still hasn't figured out how to make money from mobile, Web sites, or Web services, while its competitors have. Earlier in the memo, Ozzie notes:
Certain of our competitors' products and their rapid advancement & refinement of new usage scenarios have been quite noteworthy. Our early and clear vision notwithstanding, their execution has surpassed our own in mobile experiences, in the seamless fusion of hardware & software & services, and in social networking & myriad new forms of internet-centric social interaction.As a company, Microsoft is organized around building very big, complex pieces of software that take immense amounts of time, effort, and coordination, and that contain massive amounts of code --- in other words, complex software like Windows. Here's what Ozzie has to say about such complexity in his memo:
Complexity kills. Complexity sucks the life out of users, developers and IT. Complexity makes products difficult to plan, build, test and use. Complexity introduces security challenges. Complexity causes administrator frustration.The future, he says, belongs to simplicity:
There's one key difference in tomorrow's devices: they're relatively simple and fundamentally appliance-like by design, from birth. They're instantly usable, interchangeable, and trivially replaceable without loss. But being appliance-like doesnt mean that they're not also quite capable in terms of storage; rather, it just means that storage has shifted to being more cloud-centric than device-centric. A world of content both personal and published is streamed, cached or synchronized with a world of cloud-based continuous services.Microsoft, at this point, simply isn't organized to build appliance-like devices or cloud-based services. Its time and resources are devoted largely to big-bang operating systems and office suites that takes years to build. This causes a myriad of problems, and key among them is that it means that Microsoft can't respond quickly to user demand or changes in the market.
Contrast that with Android, which Google continually updates, and which is then automatically updated on consumer's phones. Since a little over a year ago, beginning in September 2009, Android has gone through versions 1.6, 2.0, 2.1, and 2.2, with version 2.3 expected some time in the fourth quarter of the year, version 3.0 expected in early 2011, and version 4.0 rumored to ready some time around the middle of 2011.
Making the equivalent changes to Windows could take close to a decade. Working that slowly simply doesn't work anymore; technology and the world change too fast.
Obviously, Microsoft can't actually kill Windows and forgo those billions of dollars in revenue. But if the company continues to be organized around building a big-bang, complex, operating system, rather than software that can be quickly updated as the world and technology changes, its days of big growth may be likely over. That's the hidden message in Ozzie's memo. The question is whether Microsoft will heed it.