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It’s A Dark Time To Be A Consumer In The Cloud

Doc Searls captures something valuable on the occasion of his 40th birthday. No, he’s not 40. He’s 65. But when you’re lucky enough to reach that time, you discover a version of what you learned at 40, namely that you feel remarkably like that time long ago when you first started acting your age.

Namely that age is invisible until you look in the mirror, and even then if you look into the eyes. They see you the same way, full of hope and arrogance and doubt and everything all wrapped together. The eyes are the giveaway to 40, and 65, and 12 for that matter. All of which reminded me of something when I read about Microsoft in Vanity Fair.

The usual obvious stuff was there: Microsoft was the richest failure of the modern age, all dressed up with nowhere to go as Google and Apple and Amazon and whatnot sucked up all the juice and left nothing but rind for Redmond. But what wasn’t so obvious was the carefully constructed attack on the Windows company’s ability to compete. Stack ranking, it turns out, is a cancer eating away at Microsoft’s ability to save itself.

What happens when you pit executives against each other for promotions, bonuses, and what used to be called Bill-time, is that every action the company takes is predicated on preserving some version of the status quo. There’s plenty of that in the Redmond DNA, what with the wildly successful Windows, Office, and Server Tools groups, both status and quo. Steve Sinofsky saved Windows from the Longhorn/Vista debacle by shipping something that promised and delivered. Coming from the Office group and its success at wiping out both WordPerfect and Lotus productivity suites, Sinofsky is now the putative heir to the throne once Ballmer fades.

But the undercurrent of the Vanity Fair analysis is that the toxic anti-innovation culture of the company trumps even Bill Gates’ unlikely return to the throne. Unlike a salesforce.com where each passing day engenders innovation as a way of validating the subscription model, Microsoft is a victim of its own success at the hands of its most successful. According to the article, executives withhold just enough vital information to maintain their own position of unique value. Where social is a requirement in a system that lives on innovation, Microsoft is forced to go against the grain to share in realtime.

Even its brilliant head of communication Frank Shaw finds it oddly difficult to work his way out of the box they’re in. He debunks the article with big numbers and the promise of Xbox, Kinect, and by implication but not direct attribution the Surface Tablet. He doesn’t answer the logical followup, wondering how much more innovation there could have been if the culture hadn’t crushed so much of the opportunity in the first place.

Instead, Frank’s data points have the opposite effect of reinforcing the central thesis of the article. If the Vanity Fair author got the context of C# wrong and understated the company’s growth through the so-called Lost Decade, Shaw left unchallenged the central logic of the article and its implications moving forward. Even more tellingly, the very tone and audacity of the article, its mainstream non-tech audience, would never have occurred in the past. Microsoft presented such momentum, clout, and inevitability, along with serious ad dollars, to make such a negative attack very dangerous to the health of media companies.

With October looming large as the locus of a shipping Windows 8, Surface Tablet, and Windows Phone, there should be plenty of marketing dollars in the pipeline. Why aren’t the media companies afraid of rocking the boat? Probably because Microsoft needs them more than the other way around, what with new product coming from Apple, Google, Amazon, and possibly social players. And analysts have to be careful not to overestimate Microsoft impact in the marketplace should miscalculation come back to haunt them the way Ballmer’s predictions about the viability of the iPhone did him.

What does Microsoft see when it looks in the mirror? Surely the bluster from Ballmer comes from that same well of hope, arrogance, and doubt, the confidence that Windows and Office and the Server division will finance eventual success in the innovation race. But the legacy revenue is an albatross difficult to shake off, with its devastating impact on the new thinking required to understand the new realtime mobile world.

Windows 8 may well stem the mind share drain brought on by the iPad, but subtle clues suggest otherwise. When Bill Gates pushed tablets into the marketplace 10 years ago, OneNote, the one application that took advantage of the interface, was hamstrung by the failure to provide a free runtime. It’s ironic but not surprising that OneNote today is the only Office application shipping for the iPad. The implementation was not perfect, but the underlying innovation was on target. The economic imperative of the Microsoft tax prevented the synergy of hardware and software from being realized.

As I type these words on a Bluetooth keyboard propping up an iPad, my 11-year old daughter asks me what I’m writing about. Microsoft, I say, and cool, she says. She means, yeah, Dad, whatever. She hasn’t and doesn’t use “Microsoft”, but rather “Apple.” Actually she does use Microsoft, as in XBox, and Skype as in her main communications channel while playing Mindcraft. And Google to research “everything.”

And in another post, Doc Searls broaches the idea of using Wikipedia as a ubiquitous storage point for blog posts, a place we can feel confident of persisting as a result of its canonical and increasingly authoritative momentum. Google honors it at or near the top of searches, taking the “everything” of a 12 year old to its next logical conclusion, and in the process skipping right over Microsoft’s window into the next generation. My 18-year old daughter is reported to be actually using email to communicate with a workgroup in college, but Exchange and Outlook it’s not. Gmail and GTalk video are merging into Google + and Hangouts. Facetime is the competition; Microsoft is odd man out.

Young at heart. Experienced at mind. It’s at the intersection of passion and wisdom where innovation occurs. As Vanity Fair provoked, the numbers don’t lie but they may not tell the truth. No matter how cool the Surface may be, and cool it is even in my vernacular, what’s cooler is smaller as the Nexus 7 is, and enterprise-ready as iPhone/iPad is, and push notification as Android and iOS are. As each platform matures, they move toward the center where notifications live.

On the next Gillmor Gang, I ask the musical question, “Can we predict the success or failure of tech companies and their products?” Can we look at RIM in the context of the iPhone and iPad double whammy and predict failure? Yes we can. Can we look at the Nexus 7 and predict growing success for Google +? Yes we can. Can we see the DNA of Microsoft undermining great products, huge revenue, and a legacy of inevitability? No we can’t. But stacked ranking is another story, one Ballmer can’t afford to let linger.