The Battle for Microsoft's Soul

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So much of this long protracted struggle for political change has rubbed off on the tech community. In the partisan windup to this long election process, we’ve become almost inured to the fact that as much as things will continue to be the same, already the “choice” between the two candidates has produced one sure thing. That is, either of the two candidates represents fundamental change from the status quo, no matter how much you want to differentiate further.

So it is with the shift to the Cloud. Whether you’re betting on Google, or Amazon, or Microsoft, or less obviously Apple, IBM, Oracle, or Cisco, the sure thing is that Web services has gone main stream. If this is a horse race at the vendor level, it’s about each company’s ability to harness its innate strengths and migrate its weaknesses. Put another way, the battle is within, not between.

So it is with Microsoft, mere months into Bill Gates’ retirement. Though my friend Dan Farber and others raise the specter of Gates returning to lead Microsoft at some climactic point, more likely Gates has already weighed in and signed off on the strategy unveiled at the PDC in Los Angeles this past week. Steve Ballmer’s leaked memo could easily have been written by Ray Ozzie, with its methodical restating of the software plus services case and the surprising (for Ballmer) summoning of Live Mesh at the end as Azure’s secret sauce:

Live Mesh hints at how our lives will be transformed as the barriers between devices disappear and the option to connect instantly to people, devices, programs, and information becomes a reality.

Who is Ballmer speaking to? Ostensibly customers, the target of subscribers to Executive Emails from Microsoft. But really the refactored executive team inside the company, and in no uncertain terms, the power structure built largely by Gates and managed by Ballmer. To a Steven Sinofsky, “the barriers between devices” speaks differently than to a Bob Muglia, David Thompson, Scott Guthrie, or David Treadwell. That’s because Sinofsky owns only one leg of that PC-Web-Phone stool that the Azure Services Platform rests on.

The second day keynote also hinted at the new political alignment in the company. While the first day introduced the cloud strategy, the second spoke as much to the Palace Guard as it did to the developers. Sinofsky’s Windows 7 brought the first significant developer applause of the week, perhaps a reflection of the sense that the OS would indeed survive the OS/X challenge with its Touch feature set, multi-monitor support, and screen management tools. As a Mac user, I had the odd sensation of feeling like Microsoft was trying to reengage with switchers, a point Ray Ozzie joked about in a later conversation.

But to the Microsoft rank and file, another message was clear. Sinofsky stayed completely away from the rest of the Azure announcements, hewing closely to the fundamental keep-the-trains-running-on-time reassurance that Vista (and by implication Longhorn) were mistakes of the previous regime. But wait, that was Bill’s regime, and Sinofsky is partially running against himself this time out. His former job as Office boss is now owned by Stephen Elop, who did not speak, instead handing that task to junior executives for the Office Online demo.

By contrast, Bob Muglia, who controls the Server group with its burgeoning revenue gusher, straddles both old and new Microsoft. A wily tactician who survived the DOJ meltdown where others didn’t, seems poised to inherit the mantle of Allchin in the new reworked Redmond. To him, the 3-legged stool is all upside “and the option to connect instantly to people, devices, programs, and information becomes” not only “a reality” but an annuity.

Scott Guthrie continued the subtle shift from old to new, highlighting Windows 7 features such as jump lists exposed to developers via Windows Presentation Foundation, a new WPF Toolkit with support for the same Visual State Manager and controls shipped two weeks earlier for Silverlight. .The <net 4 Framework was also previewed, including multi-touch features and the deep zoom technology also shipping with Silverlight. In other words, Silverlight is the first place we're seeing key technologies of the new Azure stack.

Silverlight gives .Net developers real skin in the cloud game without undermining the open nature of Mesh and Azure's REST and RSS/Atom gateways. Ozzie's challenge is not to convince developers of the power of the Cloud, but to leverage Microsoft's legacy cash cows without letting the people who own those groups stifle innovation as they have done for years. The loudest applause line of the two major keynotes was for the BBC's Anthony Rose and his BBC iPlayer demo, where Silverlight and Live Mesh Services harnessed social graph and user behavior that went several steps beyond anything from competitors including Google, Facebook, or Apple.

Now, what’s really interesting here is because this is Mesh-ified, this information is going off to all my devices. So, if I’m in the office and I’ve watched a program halfway through, and I’m now going out for lunch, I can take out my cell phone, and when I go on my cell phone, that program has been synched to the cell phone. And it’s not just the information, the metadata, but through the cloud the actual program is on the phone and the program, in fact, will resume playing from exactly where I left off on my desktop computer.

The PDC developers could smell money, and this was with live code orchestrated by a customer. This makes the questions about pricing and timing moot: Microsoft has the money to get this out there, and the timing is real soon now for a tech community looking to rebound from the tough times ahead. But the developers, though comforted by the Windows 7 snapshot and mildly enthusiastic about the online Office pitch, were voting with their applause for the Silverlight/Mesh/Azure triumvirate as the way forward.

Office for the Web may pan out as just a leg of the stool for collaborative purposes, but the Silverlight Office has never seemed more disruptive. Significantly, no Outlook Web version was shown, suggesting that Ozzie is keeping his powder dry while giving Mesh time to ripen along with its PubSub router underpinnings. Again, from Anthony Rose:

[MSN] Messenger is the largest IM network in the UK. So, for the BBC this is a huge viral opportunity. Imagine all of my friends just a click away, I can share my iPlayer programs and activity feed with them.

We’re looking at the next Outlook, and it’s going to be hard to stop inside Microsoft’s executive war room. The biggest single sound we heard at the Azure rollout was that of silence – a three year incubation period where very little of what Ray Ozzie has been building leaked out, and that which did was couched in terms that gave the old guard little to attack or slow down. Now that it’s here and endorsed by Ballmer in such unequivocal terms, the war for Microsoft’s soul is over. By opening the platform to standards forged in large part by scripters, hackers, and especially competitors, Microsoft has leapfrogged into the lead for mindshare where it counts: inside the company.

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