Sack Ballmer? Break Up the Company? How Microsoft Could Innovate

Outside of official circles in Redmond, WA, the term “Microsoft innovation” is often thought of as an oxymoron, sort of like “Army intelligence.” People have been actively debating the issue of whether and how Microsoft can truly innovate in the tech world for at least the past decade.

Enter Dick Brass (great name), who was a Microsoft vice president from 1997 to 2004. His op-ed in the New York Times yesterday sharply criticized Microsoft’s lack of innovation and has stirred the pot considerably, even prompting Microsoft to post a response. But I haven’t seen many people talking constructively about how to fix the problems. And Microsoft doesn’t seem to admit that there are any problems, at least officially.

Brass used the peg of Apple’s iPad tablet announcement to highlight what he sees as Microsoft’s failings in tablet PCs, e-books, digital music, and mobile software. He calls Microsoft “a clumsy, uncompetitive innovator” that is “failing, even as it reports record earnings.” And he points to two problems with the company’s culture—problems that threaten Microsoft’s future, if not its present.

One is widespread political infighting that can doom innovative people and products that compete in some way with existing product groups. (The current Ray Ozzie situation comes to mind.) I’m sure there are benefits to this kind of competition, but you have to wonder whether the volatile mix of personalities and agendas at the company is stifling some of its more creative projects.

The other problem is a software mindset that Brass says is stuck in the 1970s. “Part of the problem is a historic preference to develop (highly profitable) software without undertaking (highly risky) hardware,” he writes. “This made economic sense when the company was founded in 1975, but now makes it far more difficult to create tightly integrated, beautifully designed products like an iPhone or TiVo.”

In his response, Frank Shaw, Microsoft’s vice president of corporate communications, gave the usual spiel about “innovation at scale”—the idea that the company reaches a huge … Next Page »

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4 responses to “Sack Ballmer? Break Up the Company? How Microsoft Could Innovate”

  1. Army Intelligence? Indeed! Can’t you come up with a stereotype that is actually true? It’s clear that you use the metaphor loosely without any personal experience to support your comment.

  2. Blue Swan says:

    I would spin off all business units into separate entities.

    Microsoft would then become a conglomerate like the old ITT.

    I would end dividends entirely and instead use profits to invest in Web 3.0 startups.