Recently a Microsoft memo was supposedly "leaked". It seems pretty obvious to everyone that it was actually deliberately released, but never mind that. The real question is whether the memo was written with an eye toward the planned release or was a genuine internal document that they then decided to throw out to the press.
Knowing Microsoft, you'd bet on the former.
But on the other hand.. do they really believe this stuff? Entitled "The Internet Services Disruption", the memo paints Microsoft as a prescient innovator. For example,
When we reflected upon our dreams just five years later in 1995, the impetus for our new center of gravity came from the then-nascent web. With a clear view upon the challenges and opportunities it presented, the entire company pivoted to focus on the internet to pursue that fully connected dream with support for internet standards throughout our product line: a web browser, server and development tools, and a service in MSN that was transformed into a web portal. Many things we developed in that era continue to fuel the growth of todays internet: the technologies of AJAX DHTML and XMLHTTP were created in 1998 and used in products such as OWA.
Yeah. Funny how the rest of us remember Microsoft ignoring the web, especially ignoring TCP/IP and only coming into that whole market way late. I sat in a meeting in 1993 where I suggested that Microsoft needed to embrace TCP/IP both for the Internet and for general network integration. The consensus of the other attendees and the meeting's leader (a large VAR) was that I was a fruitcake, Microsoft would kill TCP/IP and the Internet was unimportant except to (fruitcake) geeks like me. Those opinions could have been found just about anywhere back then, and although I never sat in a Microsoft meeting, I bet I would have been labeled as a fruitcake there also. Well, OK, I am a fruitcake. But that's not the point, is it?
Well, here it is twelve years later, and Microsoft is feeling the pressure from web services. Web services don't necessarily need Microsoft operating systems, a fact that Bill and the boys surely must realize, and yet they say:
Most challenging and promising to our business, though, is that a new business model has emerged in the form of advertising-supported services and software. This model has the potential to fundamentally impact how we and other developers build, deliver, and monetize innovations. No one yet knows what kind of software and in which markets this model will be embraced, and there is tremendous revenue potential in those where it ultimately is.
Promising? Are you kidding?
And that tremendous revenue potential is from advertising? This is the part that raised my eyebrows:
Online advertising has emerged as a significant new means by which to directly and indirectly fund the creation and delivery of software and services. In some cases, it may be possible for one to obtain more revenue through the advertising model than through a traditional licensing model. Only in its earliest stages, no one yet knows the limits of what categories of hardware, software and services, in what markets, will ultimately be funded through this model. And no one yet knows how much of the worlds online advertising revenues should or will flow to large software and service providers, medium sized or tail providers, or even users themselves.
More revenue than traditional licensing? Seems bloody unlikely to me. Not that its anything to be sneered at, of course. But there is just no way that ads in otherwise free applications are going to match the income stream of selling a monopoly operating system. Microsoft is used to a rich, creamy revenue flow; this is water with a little added milk powder by comparison. Not that Microsoft has much choice here: if they don't do it, they'll be the only ones who aren't. But as they suck hungrily at the teat that just cannot provide the volume they are accustomed to, what then?
Nastiness and more nastiness, of course. This isn't taking a bottle away from a helpless baby; this is a big nasty lion crouched over its prey. The great mass of jackals and buzzards interested in the spoils may ulimately win, but that doesn't mean a few of them won't get swept away by large claws. The memo says:
We will compete energetically but also responsibly and with recognition of our high legal responsibilities. We will design and license Windows and our internet-based services as separate products, so customers can choose Windows with or without Microsofts services. We'll design and license Windows and our services on terms that provide third parties with the same ability to benefit from the Windows platform that Microsofts services enjoy. Our services innovations will include tight integration with the Windows client via documented interfaces, so that competing services can plug into Windows in the same manner as Microsofts services. We will compete hard and responsibly in services on the basis of software innovation and price and on that basis we will offer consumers and businesses the best value in the market.
Um, sure you will.
You can't read that and not wonder just how many lawyers are gainfully employed right now looking for the ways and means to do exactly none of that, and how many friendly politicians are getting nice little campaign donations in hopes that they will better understand the vital necessity of a dominant Microsoft. You know, "documented interfaces" could be a national security threat, couldn't they? Loose lips sink ships. Won't someone think of the children?
Ahem. Windows twentieth anniversary was November 20th. Happy birthday, Bill. I have to wonder whether you'll see a thirtieth. I've said that in public a few times recently, and of course once again I'm a fruitcake. Agreed. Microsoft Windows almost certainly will see a thirtieth anniversary.. but the cake will probably be a lot smaller and have no frosting.
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More Articles by Anthony Lawrence © 2011-03-19 Anthony Lawrence