It’s the “dawn of a new day” at Microsoft with the announcement last month that Ray Ozzie would step down as the company’s chief software architect. But in a final treatise before his departure, Ozzie spoke of shifts in the device market and in the way consumers will look to access information, and he candidly admitted Microsoft was late to acknowledge this sea change.
In an Oct. 28 memo titled “Dawn of a New Day” to executive staff at Microsoft, Ozzie wrote, “Certain of our competitors’ products and their rapid advancement and refinement of new usage scenarios have been quite noteworthy. Our early and clear vision notwithstanding, their execution has surpassed our own in mobile experiences, in the seamless fusion of hardware and software and services, and in social networking and myriad new forms of Internet-centric social interaction.”
Ozzie went on to describe a “post-PC world” of cloud-based continuous services and appliance-like connected devices for interacting with those services. “Let there be no doubt that the big shifts occurring over the next five years ensure that this will absolutely be a time of great opportunity for those who put past technologies and successes into perspective, and envision all the transformational value that can be offered moving forward to individuals, businesses, governments and society,” he wrote.
Forrester analyst Jeffrey Hammond agreed with Ozzie’s vision, but wondered if Microsoft had the fortitude to completely embrace this post-PC world, which could pit those within Microsoft who cling to Windows against those pushing for service and mobile platforms.
“They have a real conundrum,” Hammond said. “Do they scale up Windows Phone 7 for the in-between form factors, or squeeze Windows down?”
Hammond said Ozzie is dead-on in his assessment of the future. Hammond told of going into meetings two or three years ago and doing a mental tally of who had a BlackBerry and who had an iPhone. “Back then, it was six BlackBerry devices for every one iPhone. Now, it’s two [BlackBerry devices] for every 10 iPhones.”
Today, he said, he does the same mental tally for laptops and tablet devices, such as the iPad. “Now, in a room of 20, you might see two iPads and 18 laptops. Already, 10% of the sample has shifted from laptop to tablet. And I think we’ll see the same shift.”
One impact of this shift, according to Hammond, is the end of Wintel—the computer systems based on Intel’s x86 processor and the Windows operating system. “This has been the assumed default client for the last 15 years,” he said. But the new devices are being built on ARM processors, which are low-power chips that power these instant-on devices. Intel, he said, has been trying to scale its power down for years but still has not achieved the level of ARM processors.
“The wild success of Wintel becomes a liability” in the new post-PC world, Hammond said. “It becomes the classic innovator’s problem. The challenge becomes, can you kill the golden goose in order to survive?”
Ozzie’s paper reflects the struggle Microsoft will face. On the one hand, he writes, “Our PC software has driven the creation of an amazing ecosystem, and is incredibly valuable to a world of customers and partners. And the PC and its ecosystem is going to keep growing, and growing, for a long time to come.”
Then, he adds, “Just as in the past, we must reflect upon what’s going on around us, and reflect upon our strengths, weaknesses and industry leadership responsibilities, and respond. As much as ever, it’s clear that if we fail to do so, our business as we know it is at risk.”
Compounding the problem is the fact that there is no “heir apparent” to Ozzie for the chief software architect role to guide Microsoft through this profound change. Steve Ballmer is not that leader, Hammond said. “Steve, for better or worse, is Windows more than anything. But they need to look forward at what can happen, not look back at what did happen, and not try to preserve what is. In the future, they won’t have the cash cow to fall back on.”
Hammond, though, downplayed the impact of Ozzie’s departure after five years at Microsoft. “They’re Microsoft. They’ll find new talent.”