This article was published in PC Plus issue 151 (May 99), and is reproduced here for information purposes only. This is the original copy which was sent to the magazine, not the subbed version which appeared on the page. |
Paul Stephens column, PC Plus issue 151 (May 99)This one gave my view on some plans dreamed up by Steve Ballmer for reorganising Microsoft along market sector lines. Was 'Mad Dog' Ballmer crazy? Not necessarily, in my view.
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[BEGINS]
<strap> Has Microsoft
gone crazy? On the face of it, perhaps, but Paul thinks there may be some
very clever method in its madness. <callout> Upheavals like
these are normally a sure sign that the marketing people have taken over
the asylum. <body - 927
words> I knew things
were tough for Microsoft at the moment, what with the U.S. Anti-Trust case
going badly and Linux sprouting up everywhere like a public-domain
mushroom. However I didn't realise things had got so bad that it was
considering the textbook desperate manoeuvre of the Firm that's Lost Its
Way, a strategic reorganisation along market sector lines. Yet that's
exactly what it's reported to be doing.
The plan, apparently, is for Microsoft to be re-jigged into four
divisions, each one aimed at a particular customer group. The targets of
this re-focussing would be Consumers, Enterprise customers, Developers and
'Knowledge Workers', the latter a category which I'd have thought covers
anyone who uses a computer for anything more serious than interfacing with
their Barney toy. Normally this kind of reshuffle is harmless enough, a part of the
Marketing Division evolutionary process which results in the fittest
getting bigger offices and the weakest no offices at all. But Microsoft
isn't just talking about its marketing teams here; these divisions would
include responsibility for product development, so there would be
developers creating products for Consumers, others creating them for
people who worked in Enterprises, and yet others toiling away on behalf of
people who Work with Knowledge. The idea of having developers creating products for other developers is a
good one, and pretty much the way Microsoft already does it. However you
don't have to be Henry Ford to spot the major flaw in the rest of the
plan. It is that the most important of Microsoft's systems and
applications products - particularly Windows and Office - straddle the
three target customer groups, and that focussing development and marketing
on just one of them would make the others feel poorly served. This would
neatly destroy the pan-market product strength which has put Microsoft
where it is today. A brief glance at the company's own definitions of its target groups
shows just how muddled things are at the outset, even before the market
melting pot has had a few stirs. Consumers would, apparently, include
Windows (the cheap variety), online and Internet customers, which leaves
me wondering which operating system will be used by the Knowledge Workers,
who include home-office, small-business and mobile professionals, and
which parallel communications universe they'll inhabit instead of the Net.
The Knowledge brigade will also, apparently, include office workers who
use Office word-processing, spreadsheet and other software, which is going
to make them difficult to distinguish from the people who work in the
offices of Enterprise customers. One difference is that the Enterprise
users will, apparently, be running Windows 2000 (the expensive version
formerly known as NT) - but then so might small business users who don't
like their systems crashing on a regular basis, as well as quite a few
developers (most of them, in fact), which puts us right back at square
one. What Microsoft seems to have forgotten is that it's part of a
technology-driven industry, which has grown at an explosive rate precisely
because people came up with product developments first, and thought about
how to use them later. We have 450Mhz processors and 12Gbyte disks today
not because a marketing man said that his customers needed them, but
because chip and disk manufacturers exist in a state of perpetual panic
about staying ahead of the field. We'll have voice-controlled PCs and
photographic quality live-action games tomorrow because we've got 450Mhz
processors and 12Gbyte disks today, and so it goes on. If Microsoft loses
its focus on staying ahead in pure technology terms, it could be in big
trouble. For proof of that, it only needs to look at the firm it pushed
aside in the late 1980s to gain dominance of the PC world - IBM, the
archetypal marketing-led corporation for whom technology has always taken
second place to business strategy.
As so often with Microsoft though, things may not be quite as they
seem. Upheavals like these are normally a sure sign that the marketing
people have taken over the asylum, using their finely-honed persuasive
skills to convince top management that future prosperity - nay, survival -
can only be won by giving pre-eminence to their finely-honed persuasive
skills, and putting those scruffy product development oiks firmly in their
place at the bottom of the pecking order. This view would appear to be
supported by the fact that the Microsoft plan's chief architect is
newly-installed Company President Steve Ballmer, an ex-Proctor and Gamble
man who on occasions likes to pretend that he's a lunatic. In truth,
however, Mr. Ballmer is an extremely clever and shrewd operator, and as a
last-ditch defence against Microsoft's worst nightmare, the
crazy-divisions plan could prove very effective.
It looks increasingly likely that the U.S. Government will come to
see splitting Microsoft up as the only way of breaking its dominance while
retaining a free computing market. It would be a popular move, and there's
a legal and financial precedent in the Bell Telephone Company, which was
successfully broken into 'Baby Bells'. At the moment Microsoft is
particularly vulnerable to such a plan because it would at split very
neatly along technology lines, into three companies selling systems,
developer tools and applications. Mix those technologies up, however, in
divisions which are responsible for Windows 2000 and Excel, or Windows CE
and Barney, then make sure there's plenty of overlap, so that the Barney
division also has an interest in Win 98 for its post-teen customers, and
you've got a mess that's much harder to sort out. Madness then perhaps, but with more than hint of method. [ENDS] (C) Paul Stephens 1999. All rights reserved.
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