Keep Trying

Wednesday, November 09, 2005

Understanding the Microsoft Gorilla

Dave Winer points to two recent memos from Bill Gates and Ray Ozzie. Scoble is still reeling from their significance. Personally, I'm trying to keep from falling asleep as I read them.

To understand what is going on at Microsoft, it might be helpful to refer back to a quote from this article by the legendary strategic marketing expert Geoffrey Moore: "Companies that have proprietary architectural control over a product that has high switching costs are gorillas". And as Moore points out in the article and his book the Gorilla Game, "the market confers a tremendous competitive advantage on that vendor".

For Microsoft, Office enables the production of Word Documents and Excel spreadsheets which is why Microsoft can't switch to open formats. The Windows API (and now the .NET api) enables the creation of client software, which is why Microsoft is pushing so hard to keep the client relevant.

Open standards, the browser and Web Services are changing what matters and if Microsoft can not lock the world in with a proprietary and enabling architecture they will lose big time. In addition, the Office cash cow is coming under relentless attack from open document standards and cheaper tools like Open Office.

What they need is a Ruby on Rails for Web Services, which could possibly induce developers to lock themselves into Microsoft, but I think the problem space is too big and complex to provide a simple enough solution.

So the bottom line is Microsoft seems cooked regardless of their current product pipeline, which is drawing tremendous yawns from the community. The only question left is whether it is proper to be joyful as we watch the mighty and arrogant giant descend.