Okay, did I catch your attention with that title? Let me set the record straight. No, I don’t think Microsoft will fail anytime soon. Sometimes, as I’m thinking about the business or deals that I am working on, I often wonder what is going on behind the scenes at Microsoft and why they make certain decisions? In this post I’m going to try and answer some of the top questions that people ask me around why Microsoft makes some of the decisions that they do.
Why the Push to Office 365?
On the surface the answer to this question seems simple. Microsoft wants to control your infrastructure; they want to make sure you are hooked… but I really don’t think it was this simple internally at Microsoft. My guess is, there was a massive amount of real debate about a push to Office 365 (and I’m guessing it was not always a polite conversation).
Office 365 to me, was an answer to a problem Microsoft has had since the invention of Software Assurance, it was a way to force customers to upgrade. The biggest threat Microsoft has to its traditional recurring (ie. Software Assurance) revenue stream, is clients that do not renew (all or part) of the Enterprise Agreement (EA).
If you really think about it, Exchange as an online service – makes sense. SharePoint as an online service – only sort of make sense (think of all the customization that may not be easily achieved in a multi-tenant type deployment), Skype in the cloud – not sure it makes sense (ok I will give IM and presence, but Voice? I’m still not sure VOIP quality comes close to the landline) but Office in the cloud – huh? Yes they have the Office Apps but are they really much more than a glorified viewer (which were free?).
I think just looking at Office pretty much provides the full picture here. People were dropping the SA on Office, as they only deploy the product every 6 or so years. Microsoft realized this and the natural answer – push people to Office365 and make it dependent on a new version of Office. Now at this point I can see someone in the product team in Seattle going AND OH if we make a new version of Office we can force those updates on people.
Why the Push to Upgrade?
Upgrades have always been the nemesis of Microsoft. It started with Windows XP (no I don’t want to get into arguments about how bad Vista really was). No one wanted to move. Microsoft of course never understood this. I always love the comments you hear from sales reps, this customer moved in 90 days why can’t you?
Taking the clients view on this, I truly see it. Honestly, what value can they add into Windows or Office for that matter to provide business value to do the upgrade. I sometimes wonder how many people would still be running Windows XP if it was still supported, which by the way is the number one reason people upgrade these two products – end of life support! Not a good reason in my opinion (completely off topic but, if anyone from Rimini or Spinnaker reads this, please, please, PLEASE!! take on Microsoft support).
I think Microsoft’s issue has always been that, they do not see the clients’ world. Their view is so myopic of their own desires they can’t see it. The reason people can’t move (beyond finding business value) is the cost to do all the application compatibility is so cost prohibitive. End of story. Microsoft’s first attempt at address this – App-V. Virtualize guys, contain the old apps in an image and your good to go. When that didn’t work, they came up with plan B. Force it on them with Office 365.
Not a bad plan if you are a shareholder of Microsoft’s. Get them and keep them forever. The problem is, I don’t believe this plan will work. As much as Microsoft technology is important to people, I do think some unforeseen force will catch them (maybe it’s Google or Amazon or someone we haven’t seen yet) The problem for Microsoft and why I think they will fail is….. They are upsetting all their clients. Organizations are tired of the Microsoft games (Pushing products that aren’t needed into bundles and increasing prices, not negotiating in good faith, auditing and pushing unfair findings on them, etc). Eventually when someone catches them, I think the exodus could be fast. Just ask Novell (remember Netware), IBM (bye, bye Lotus Notes), Corel (WordPerfect) Perhaps someone should ask the crew from Netscape or Blackberry what happens when you take clients and your dominance for granted.