Yahoo and Danger Acquisitions Emphasize Change at Microsoft

Rob Enderle

I find it fascinating that people generally view Microsoft through not only their own personal view of the firm, which most often has to do with Windows, but with a view based on the way the company was in the '90s.


Folks either don't see the very real differences, both across the company or year over year, and seem surprised when it seems, at times, incredibly schizophrenic. This is the nature of both a complex company and one transitioning though a retirement-based executive change. Let's chat about that and the problems it represents with regard to predicting Microsoft's next moves.


Industrial-Strength Multiple-Personality Disorder


I'm using the term "schizophrenia," which in humans is a bad thing, to describe Microsoft because we tend to look at companies like we do people. We expect them to behave consistently. This may be good or bad depending on the way we have been treated or seen others treated by the company, but it's a huge shortcoming when trying to assess a large corporation.


Our interactions with a company usually determine our view of it. Yet its people come and go. With Microsoft, most of us don't deal with it directly, but through service providers, hardware OEMs and retail outlets that either sell solutions using Microsoft products or sell its shrink-wrapped products. And, given that, our views of the company are limited to what we see.


A state that seems like a multiple-personality disorder in humans actually represents the norm for most large, complex corporations. Microsoft remains one of the most complex, and therefore, difficult to fully understand.


The Cause of Changing Personalities


Even if Microsoft remained unchanged, folks still would see it in a broad spectrum of ways. I used to survey on this and Microsoft was the only company that was so diverse that it had a largely polarized group of IT folks that all thought they knew the company. It may surprise some of you that Microsoft is actually both one of the most trusted (it typically fell in the top three or four) and one of the least trusted (OK, it tended to "win" this category every time) companies in technology, according to these surveys.


I no longer do the surveys, but I can tell we are just beginning to see huge changes in the company. Whether you view these changes as good or bad largely will depend on how you touch and view the company now.


The retirement and movement of key executives is driving that change. The Windows team is largely new, the back-office team has received a steady influx of open source types, Operations and Finance leadership have changed, and even the mobile and entertainment spaces are being altered dramatically.


I've never seen this much change at one time in a company that isn't in deep financial trouble. The Microsoft you think you knew is dead and a new company has, and will continue to be, built from the ashes.


So What Does this Mean?


Kicking back and making assumptions about what Microsoft will do based on what it has done in the past won't work. The Yahoo and Danger moves are great examples. For much of this decade, Microsoft has done little in acquisitions and suddenly it's contemplating a hostile takeover of Yahoo, a move more like Oracle than traditional Microsoft.


Are these changes good or bad? All we can say at this point is they represent major changes. Its server and desktop OS look improved to me, though on the desktop we won't know for sure until Windows 7. Mobile needed to fix its user interface and Danger has a good one, so if those skills transfer -- and it comes from a different code base so "if" is a big word -- we should see a big improvement there. Because Yahoo is Web-based, I don't expect much near-term impact, but long term it will depend on which Yahoo and Microsoft executives go where and, for most of you, that probably won't make any difference until next decade anyway.


In the end, we all need to start looking at Microsoft more like a closely grouped set of companies under a corporate umbrella. They might, or might not, have a lot to do with each other depending on what they do. We'll hope this doesn't go the way of Sony earlier this decade and instead mirrors the improvements we've seen in HP. But all we can say for sure is that the company is, and will increasingly be, different.


If it wasn't clear before, this means that if you are working with Microsoft, you need to stay close and get to know the new executives you depend on, because assumptions based on past experience will be virtually worthless.

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