Sunday, August 25, 2013

An Open Letter To MSFT's New CEO

Dear Sir or Madame:

Congratulations on your new job as the CEO!  Microsoft is an amazing company and I truly wish you all the best.

As a twelve year veteran (1996-2008) of MSFT, I still consider my self a "softie" even though I've been gone for quite some time.  In point of fact, I still consider "My Microsoft" to be the way the company was in the late '90's.  The shambling wreck of a technology powerhouse that existed when I left really wasn't the company that I joined.

And that's a shame...

The reality is that Microsoft, like so many other proud companies has lost her way over the years.  Instead of the amazingly innovative "take no prisoners" company that I joined in 1996, the current company is overly bureaucratic, slow and boring.  Honestly, today's Microsoft feels more like IBM or HP.

Here are just a few things that have changed over the years:

1)  The stock was doubling every 18 months.  The reality is that kind of stock growth is unsustainable and everyone knows that.  However, it went on for many years and it really drove our culture.  We were willing to work hard and make personal sacrifices because we knew we were going to be rewarded if things went well.

2)  It was a true "meritocracy."  I know that this has been debated and discussed many times, but I was there and I can honestly say that you rose based on your merits.  Everyone in the company was stack ranked and I always knew where I stood.  It was brutal, competitive and perhaps not the most "nurturing" of environments but it make us stronger and leaner than our competitors.  

3)  We were empowered.  Everyone was way to busy to go and ask permission to do the right thing.  As a new employee, I actually sent a mail to my director asking if I should violate policy to help my customer with a particular bug they were experiencing (I wanted to give them a dev build to see if that fixed the problem which was not normally allowed).  The answer I got back was very short:  "Why are you asking me for permission to do the right thing?  Just do it and let me know if anyone tries to stop you."

4)  We were relentless.  It really didn't matter who tried to compete with us, we were young and arrogant and we knew we could beat them.  Whether it was Novell, Netscape or Lotus.  We were better than them and we knew it.  Naturally, that wasn't actually true but we had a swagger that allowed us to "punch above our weight."  Note that those guys are mostly gone or out of the enterprise software business (yes, I'm aware that IBM is still around but when was the last time you saw someone using Lotus Notes or 123 for God's sake?).

Ah, the good old days.

Well, that's not going to come back.  And honestly, most people would be aghast at the idea that MSFT might start acting like the arrogant bully that we used to be.  Honestly, I don't know if it would even be possible to remake the company like it used to be and I don't think it would be desirable either.

On the other hand.....

There are tons of things that Microsoft can and should do RIGHT NOW to kick some butt and regain your luster.

1)  Double down on Skype.  The really amazing thing to me is that I still have a phone on my desk.  Do you have any idea how silly that is?  Buying Skype was one of the smartest things Steve ever did.  You should make "Skype for Business" by immediately merging Skype and Lync.  Then sell the crap out of it for peanuts.  Kill off all the existing VOIP players.  The PBX guys are on their last legs anyway.  The thing that makes Lync struggle is PSTN connectivity.  That should be automatic.  Enter your credit card and your Lync server is instantly a Skype gateway to the PSTN.  Similarly, there is no reason why my Lync client can't connect to the Skype backend, right?  No more PBX.  Make "Lync For Business" free with Office 365 and then charge for the PSTN gateway only.  OMG.

2)  Become a VC.  Take that massive cash hoard and become your own VC.  Fund interesting guys to write apps for Windows Phone, Azure and .NET.  Yes, I know you're doing that now, but I'm talking about taking ALL OF IT and spending it on your platform.  Holy Crap.  That would terrorize Amazon!  Then you can buy the interesting and successful ones and add them to the MSFT family.  The reality is that you're way to big to do that kind of innovation in house.  No problem, just seed some cash and let others do it for you!  Yes, most of these ventures will fail, but if a real VC can make a profit doing it then you can also.  For that matter, just hire Fred Wilson or someone else amazing to run it.

3)  Bring back the stack rank.  People love to complain about the stack ranking system.  However, it was this culture of extreme competition within MSFT that made the company great.  MSFT will never be a touchy feely company like Netflix.  That's OK.  Go with your strength.  Think Tina Fey when she said "Bitch is the new black." 

4)  Don't buy Blackberry.  For God's sake.   Just don't do it.  Hardware is a chump's game.  Besides, Blackberry does zero to help you compete with iPhone and Android.  Ask the sidekick guys about that.

5)  Kill off the windows hawks.  Windows has too much power in the organization.  You need to allow office and other divisions to make money on other platforms.  Office for iOS is OK, but it feels like it was intentionally crippled to keep the windows guys happy.  Let them off the leash.  Make every division give you a plan for multi-platform in mobile or just fire up a whole new mobile apps team that's separate from the platform team.  Give them a goal of being the #1 ISV on both Android and iOS.  MSFT was the #1 ISV on the Mac years ago.  No reason why you can't do it again.

That's all you get for free.  If you want more, I do consulting at pretty reasonable rates.

Enjoy your new job!!  I'm sure it will be a rough ride.


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