The dominant news in the blogosphere yesterday was the Gates/Ozzie memos. The Wall Street Journal broke the story, the NY Times got it, then Dave Winer published the actual memos themselves. Watching Memeorandum’s tracking of the story was a fascinating study of how the story built. It was like a volcanic eruption — one line, three lines, ten lines, 20 lines… and this morning, a day later, it has vanished.
I didn’t read it yesterday. No time. A day later I’ve finally read the thing. You can see Ray Ozzie’s hand in this. I remember the Internet Tidal Wave memo, the Windows NGWS memos (which were the precursor to the .NET memos), and countless others in-between. The character of this piece is different from those.
1. It’s written with something for every part of the company. Ozzie has broken out three sections, one for each of the Entertainment, Platforms, and Businesses groups. In the past, individual leaders of the divisions would have written separate memos to be published later. What you see in this memo is the emergence of a new visionary voice within the company, which it has lacked since Paul Maritz left. Allchin was simply too divisive to be that voice. Apparently Ozzie can play that role.
2. It acknowledges the competition, but the paranoia which would have been there previously is missing. Google and Yahoo have illuminated the way. Ozzie thinks Microsoft can do better for developers by giving them a platform to develop from rather than the "raw internet". It’s a classic Microsoft play.
It’s also similar to previous memos. Microsoft leaders are especially good at distilling complex instructions into simple visionary themes that resonate throughout the company for all teams to mobilize around. The themes for this memo are the emergence of advertising as a viable business model, the effectiveness of release early and release often as a delivery model, and customer demand for integrated experiences that really work. What does that mean, then?
The Microsoft Live announcements have already given us a glimpse of where the company might go with advertising. Expect now to see ad supported models built into more than MSN - games, productivity applications, and reference products will likely all have ad supported versions. Expect to see sophisticated tools for creating and managing ad campaigns for end users, with hooks built back into database systems, Excel, and line-of-business apps like Great Plains. Look for developer hooks to allow creative new types, delivery systems, and measurement systems for advertising. You might even see the resurrection of an ad supported version of Windows, which was first talked about in 1995 with the active desktop, which emerged with desktop channels after that, and which was killed due to overwhelming consumer dis-interest.
For years Jim Allchin argued that corporate customers didn’t want frequent releases of Windows. He was right, and the "two year release cycle with quarterly service packs" methodology was the result. But two things have pushed Microsoft to change that position: security, and competitors. When a company like Michael Robertson’s SipPhone releases a new version of Gizmo Project every two weeks it puts real pressure on the Redmondians. Some will argue the quality isn’t there, but for the core group of enthusiast users that every tech company has to target, this is crack cocaine. Release early and release often cranks up the virtuous cycle of customer feedback to a fever pitch, while at the same time keeping the core group of evangelists for your company hyper-engaged. Microsoft knows this — indeed has always known it, as the huge beta tests around any major product release indicate — and has started down this path with delivery vehicles like Microsoft Update, and the Anti-Spyware products. The impact of more frequent, smaller releases? Obviously it will affect their own internal engineering systems. You should also look for a new marketing model. In the past, the company has relied on major releases, with expectation built to a fever pitch around these releases. If there aren’t going to be as many major releases, something will have to take it’s place –> I’m betting that blogs play a huge part.
And finally, Microsoft’s bête noire — seamless experiences across multiple products. It’s been talked about for nearly a decade. Suze Woolf and Pierre de Vries, who ran the Microsoft Home in the late 1990’s, put together a series of incredibly compelling scenarios with shared calendars, software integrated with household systems, entertainment, and productivity applications, which have largely never been realized. The company has been moderately successful doing this in the past within one product group. All Windows products have a similar experience. All Office products do too. But creating the fusion of internet based services with hardware and software so that "all the technology in your life ‘just works’" will be a major challenge. For me, this is the most exciting piece of the vision. It’s also an area where there are abundant opportunities for third parties. Look for the APIs allowing developers to tap into the Microsoft presence cloud, attach to the newly acquired Foldershare, and their communications platforms. Expect to see the build-out, or acquisition of identity-based applications like presence, and social networking tools. And we should all hope to see these leit-motif’s woven through all parts of the Microsoft product suites.
Microsoft is embracing Web 2.0. Either way, it’s a major shift — tectonic or cataclysmic remains to be seen. Depending on who you are, this is either tremendously exciting, or a little scary.
