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How Microsoft Can Become More Innovative

Posted By Barry Ritholtz On July 31, 2007 @ 11:15 am In Corporate Management,R&D,Web/Tech | Comments Disabled

How could I not love this page one WSJ article [1] about Microsoft-the-innovator [2]

"Throughout its history, Microsoft has been slow to grasp some of the
computer industry’s biggest technology shifts and business changes.
When it decides to embrace an innovation, the company has often
succeeded in chasing down the leaders, as it did years ago with Lotus
Development Corp. on spreadsheets that allow users to organize data,
and a decade ago with Netscape Communications Corp. on Web browsers
that transformed the experience of using the Internet. For years, this
catch-up-and-surpass approach worked well.

Early this decade, however, companies such as Google Inc. and Apple
Inc. exposed holes in the approach. Microsoft was slow to see the
potential in Web search and online advertising, and despite heavy
investments, has so far failed to catch industry leaders Google and Yahoo
Inc. It also was late coming to market with its own music player, and
despite a push, remains far behind Apple. Today, a host of Web-based
software services from Google and others threaten to reduce the
importance of Microsoft’s personal-computer software."

What is the solution? Craig Mundie, the man designated to replace Bill Gates, has quite the challenge on his hands:

"Mr. Mundie says advances in technology that represent "fundamental change" or "whole new business opportunities" are "more disruptive, and so people aren’t as focused on them" at Microsoft as they are on developing new features for existing products. "When they encounter them, they are naturally a bit more skeptical."

Microsoft’s product groups — business units built around products such as Windows and Office that produce much of the company’s cash — have long had enormous clout in its corporate culture. Star product-group managers, the company’s so-called shippers, get the big, profitable products like Windows out the door year after year. For them, meeting deadlines is all-important; longer-term thinking about technology isn’t.

Mr. Mundie is trying to help shift some clout to the company’s long-term thinkers and to gain more attention for new technologies and businesses. He nurtures small groups in areas he considers promising long-term bets for Microsoft, such as health care, education and super-fast "quantum" computers. During the past year, to attract foreign talent, he has opened more than 50 small research centers in such distant locations as Egypt, Chile, Malaysia and Russia."

Essentially, the approach is to tear a page from the R&D wizards at Google, and
encourage greater creativity from the non-product groups (product
groups are Windows, Office, Internet services, X-Box, etc.) to anticipate the next major
shift in computing technology.

In other words, Microsoft, in seeking to become more innovative, is copying Google’s model.

How Classic is that!


Behind Microsoft’s Bid To Gain Cutting Edge: A History of Catch-Up [1]
Mundie Follows Gates As Long-Term Thinker;
WSJ, July 30, 2007; Page A1

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2007/07/how-microsoft-can-become-more-innovative/

URLs in this post:

[1] page one WSJ article: http://online.wsj.com/article/SB118575380139081784.html

[2] Microsoft-the-innovator: http://www.google.com/search?hl=en&c2coff=1&domains=http%3A%2F%2Fbigpicture.typepad.com%2F&q=Microsoft+the+innovator&btnG=Search&sitesearch=http%3A%2F%2Fbigpicture.typepad.com%2F

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