Saturday, February 09, 2008

What Microsoft needs is Focus

I couldn't agree more with this paragraph from an opinion piece in the latest Businessweek.
"Had Microsoft kept its focus on its core business, this might not have happened. Instead, your efforts on the Web have tended to focus more on bending the Web to your will than making your software enhance it.

Take Microsoft Office. If someone took it away from me, I could get by using a Web-based office suite like Google Docs and Spreadsheets, or Zoho and others like it. You should have had Office on the Web five years ago. Meanwhile, as Web-based upstarts were quietly invading this turf, you've been wasting time, effort, and attention trying to be a consumer electronics company, a digital media company, and now an online advertising company. Before long you'll probably want to sell me telephone and TV service, too. Enough with the identity crisis! Microsoft is a software company. Everything else is superfluous."
I wonder if the Steve that needs to listen is listening, or watching the other Steve that has taken his company to new heights. The only common trait of both Steves - they are both going to leave an indelible mark on the individual companies they spearhead. To continue quoting the article (it's very well written by the way)
Buy It and Spin It Off

It all sounds very misguided, how you say that by spending all that money on Yahoo you can grow so much bigger, when what you really need is to be smaller.

But since it's clear that I'm not going to change your mind about buying Yahoo, here's what you should do: Once you close the deal, package Yahoo with your online services division, the entertainment and devices division (yes, the Xbox, too), and spin the whole thing off.

Remember that bit about focus? This would help you get it back. Put all those things that Microsoft isn't very good at, put them in a box with Yahoo and cut the apron strings. Sure, keep an equity stake, even a majority. But this formidable new entity would function best outside the Windows-centric reservation. If this new company's plans don't coincide perfectly with some future set of features coming to Windows, so be it.

The alternative, if you force these businesses to fester within Microsoft, is that these businesses will always play second fiddle to Windows—and fail to meet their potential.

This new entity is going to have to be nimble to compete with Google, Facebook, and probably one, two, or five other companies we haven't heard of yet. With luck you'll have enough time to whip the whole thing into fighting shape before it's too late. That's assuming it's not too late already.

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