Microsoft and Its Future

There has been much talk about Microsoft since CEO Steve Ballmer announced, 2 weeks back, that he would step down. Much has been made of how the company's stock value has not increased, but this is worthless chatter by our financial lords. What is more to the point is how the company -- despite having so much research -- has failed to move forward past its twin monopolies in operating systems and office suites.

John C Dvorak has repeated his calls for the company to split itself into a few separate companies. He has thought this was a good path for MSFT since the 1990s. He might have a point. But I wonder.

The big question hanging over MSFT for the past 5 years has been this: If you get rid of Mr Ballmer, who do you get instead? If Mr Ballmer has been doing a bad job, who could do better? And few names spring to mind.

So Mr Dvorak's plan makes sense in that it would be much easier to imagine a better chief at Windows Inc, or Office Inc, or XBox Inc, than it would be to imagine an effective chief over the whole combine. Think of this: an independent Office company would have ported its programs to iOS years ago -- heck, it might have been one of the first partners for Apple and stood on stage beside Steve Jobs when he introduced the iPad. That would add up to 3+ years of big fat juicy profits for Office Inc., and it would have all but made sure the company's Word and Excel would have extended their monopoly into iOS. Then a year or so later we could have seen the Office apps ported to Android -- say on stage at Google IO when Android 4.0 was unveiled. And Word and Excel would monopolize the Android platform as well.

XBox as an independent company could have brought many games over to iOS and Android as well as OSX.

But, I wonder if it might not be better to do something absolutely different -- something that nobody has suggested as far as I can see: why not dissolve Microsoft as a company entirely?

Instead of one company, transform Microsoft into a holding company, and then let all the engineers in Redmond mix and match, form any sort of teams they want. Unleash the skunkworks as a business plan. Turn the campus into a miniature Silicon Valley, a hothouse of startups.

Each startup would have unfettered access in perpetuity, to the holding company's patents. Each startup would be owned say 60% by the parent Microsoft Holding Company. The holding company would have no say over what any of these startups do, it would merely collect 60% of revenues. Full control, and the rest of revenues, would go to the startup teams themselves. Patents and inventions of the startups would go to the parent holding company and in turn would be shared out with all the other startups at Redmond Valley.

Microsoft has developed lots of ideas over the years, but as a giant it has had a hard time bringing any of them to market. Inevitably brand-new ideas threaten the old monopoly core businesses, and get choked off. The company is often described as consisting of many small fiefdoms all at war with one another.

Dissolving it into Redmond Valley startup culture would solve this problem.

Mary Jo Foley has written over the years about various efforts within Microsoft to reinvent the operating system. There are at least two new operating systems that have been created there, but nothing has reached the market -- victims to the mindset that the Windows monopoly, as currently existing, must be protected at all costs.

But at Redmond Valley, these operating systems could have been polished, finished, and offered to the public and to manufacturing partners alike. These efforts would have an edge over the typical startup that begins from nothing but an idea: free use of the Microsoft patent and inventions. The new OS would not have to re-write the Internet Protocol stack, for example. Just pull up the stack the parent company owns.

It would be good for the company and it would solve the problem of a new MSFT CEO, whose position would devolve to the task of overseeing how the patchwork quilt of Redmond Valley is sewn together. And under this would be 1,000 startups with 1,000 CEOs, each intent on its own core ideas, competing with one another as fiercely as the company divisions do now, but at last able, each and all, to bring their own products to market and satisfy their own creative and engineering dreams.

Last built: Mon, Mar 17, 2014 at 9:41 AM

By SWP Pond, Monday, September 2, 2013 at 7:45 AM. You should never argue with a crazy man.