It would be a huge mistake for
any strategist to think that Microsoft is a company whose relevance to
software is over. The world is increasingly driven by software, as
Microsoft knows, and the future could show that the company’s run, far
from being over, has barely begun.
Denis Pombriant in his article, SAP, Agassi, and the future,
illustrates the contemporary situation as one in which “smaller, more
nimble companies armed with new technologies and platforms as well as
an army of partners” could end up driving major vendors such as SAP
and Oracle into irrelevancy. He says it depends how well the majors
fight the newcomers, and he believes the war is fought and lost on the
SaaS battlefield. Microsoft, of course, could take a piece of these
companies’ business as well as any startup, if it displays the same
nimble thinking.
The company is big enough that it shows
up in a number of games, appearing for the moment to be winning in
some, losing in others. Currently Microsoft is lagging far behind in
search, which creates the popular image of Microsoft in a fight to the
death with Google. But despite Google’s foray into Office-like
capabilities with its Google Docs, Microsoft may show that it’s surging
ahead in desktop productivity.
Business intelligence is mission-critical for enterprise survival, and as we noted last week the humble spreadsheet is coming to resemble the little engine that can. And Forrester concludes from its study of the spreadsheet’s importance in business intelligence that Microsoft will remain the 800-pound gorilla in the space for some time.
In the new world of web services,
the Office suite is fitting as well today as it did throughout the
desktop publishing decades. Microsoft is increasingly exposing Office
services in XML formats that the rest of the business computing infrastructure can use.
We
suggested yesterday that the enterprise value chain is its network, and
in the same way the world’s value chain is coming to be nominated on
the global network – the Internet. Against this backdrop, differences
in nature fade between once exclusively online operators like Amazon
and Google, and originally land-based operators like Microsoft and
Oracle.
Consider IBM, once
perceived as being eclipsed by more nimble operators in a changing
computing environment, only to reinvent itself a quantum leap further
along the curve with ecommerce and online development mastery. Consider
Apple Computers, currently eclipsing Microsoft, not in the operating
system world, but in the cash-filled world of popular music.
Consider
now Microsoft, rapidly rolling out architecture and services that may
well take it a quantum leap along the curve, eventually perhaps to
surpass players who didn’t appear to be in the contest at first. What
if Microsoft ends up winning against major CRM
vendors, for example, or perhaps eclipsing entire verticals, while
everybody thought it was fighting with Google? Perhaps the contest with
Google, seeming so pivotal now, will fade away as each company settles
into its natural constituencies of services consumers.
Microsoft’s
chief software architect, Ray Ozzie, says that where the entire
software industry is going is to services. To him the appearance of
Google Docs competing in the spreadsheet space “gives us the
opportunity to revisit what belongs on the service and what doesn’t.”
It’s
very important to grasp what Microsoft sees as the venue nowadays: the
desktop and the “cloud” of online services are equally viable venues,
interchangeable at will according to user and program situation. Of
other developers, Ozzie says:
“we come at it from a history of the desktop coming
up to the web. They are coming from a history of being on the web and
going down to the desktop, but the endpoint is the same.”
Tomorrow we’ll look more closely at that endpoint.
