An ex-Microsoft Insider Speaks

Seattle Weekly has an article by Jeff Reifman who says that “addiction to Windows revenue, mediocre products, and missed opportunities could doom the company.” Jeff “began using Microsoft products 23 years ago, at age 11, and I worked for Microsoft from 1991 to 1999 as a technology manager.”

Over the past year, my frustration with Windows grew, as did my envy of Apples cool new products. Finally, last month I went out and bought an Apple Macintosh G5 and began using the new Mac operating system, OS X. It had been years since Id used a Macintosh. Until recently, I dismissed those who did as impractical, elitist hipsters, and I mocked the Mac switch ads on TV.

But in the first five minutes on my new Mac, I was surfing the Internet, sending e-mail, and ripping a CD. OS X has been a breath of badly needed fresh air after Windows.

This made me wonder about Microsofts willingness to innovate and compete. Why are Microsoft products still so difficult to use and so unreliable? Why is the company improving them so slowly? Is Microsoft losing its competitive edge? Has the company seen its best days?

The Webs phenomenal growth has driven a number of fundamental changes. And from my vantage, at least, Microsoft seems to have overlooked the most important of those trends. It made a series of missteps, and its not clear if it has learned from them. In protecting Windows and Office revenues, Microsoft has innovated less quickly than it could have. The company relies on the same strategy that helped it years ago come to dominate the personal-computer market with the Windows operating system, despite mounting evidence that its customers are looking for a new approach. Competitors such as Linux and Google are gaining, and Microsoft seems unprepared for the road ahead.

My take: I think that if Microsoft starts looking at the emerging markets aggressively from a local viewpoint (and not based in Redmond), there are infinitely more growth opportunities. Growth and large opportunities are what Microsoft needs, and its not going to get them easily in the developed markets. With a $56 billion cash hoard (growing at $1/month), there is a lot it can do. I think Bill Gates and some of the senior management team should actually spend some time in India/China and see the pain points of people living there – these are very different from the developed markets. Then, create technology solutions which can make a difference rather than trying to thrust what’s available.

On a related note, Technology Review has an article on Microsoft’s Beijing Lab, dubbing it the “world’s hottest computer lab.”

With 150 full-time researchers and more than $80 million from its parent company since opening in 1998, Microsoft Research Asia has become a powerhouse of infotech R&D. Far faster than even Microsofts top brass expected, the Beijing research outpost is influencing the companys global business. More than 70 technologies it developed are already used in Microsoft products, including software for Windows operating systems and graphics packages for Xbox video games. More of the labs latest software is slated for the next version of Windows (code-named Longhorn), due out in 2006.

The Beijing lab is a key part of Microsofts effort to ensure its global future through research. Its interesting how much of the research directed at the Asian marketplace turns out to be generally applicable, says Rick Rashid, senior vice president of Microsoft Research, which besides its main facility in Redmond, WA, also runs labs in San Francisco, Mountain View, CA, and Cambridge, England. Theyll often attack a problem differently from what would happen in Europe or the U.S., because they come from a different perspective. They often find solutions that are different, and in some cases different turns out to be better.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.