microsoft | Paul Wallbank - Communications Professional

Standing up to the giants – why the big software companies don’t always win

The survival of QNX illustrates how big companies don’t always prevail on the internet

In the latest Networked Globe post I have an interview with QNX founder Dan Dodge on how BlackBerry wants to be at the heart of the Internet of Things.

One of the things Dodge discusses is how twenty years ago Microsoft told QNX they would be driven out of business by the software giant’s Windows CE operating system.

As it turned out Microsoft failed dismally.

QNX’s survival in face of a big competitor is similar to Google’s failed attempts to enter various industries. Everyone assumes Google will succeed against the smaller players because they are rich and smart.

Often however the rich player doesn’t win because the smaller incumbent is savvy, focused and knows their market well.

Sometimes bigger is not always better in the software industry.

Restructuring Microsoft

Will losing 5,000 jobs make Microsoft a nimble competitor?

After last week’s long memo from CEO Satya Nadilla, it was inevitable Microsoft would have to restructure around the company’s new direction.

Bloomberg now reports Microsoft will be laying off thousands of employees – possibly more than the 5,800 laid off in the recessionary depths of 2009.

With 127, 000 employees Microsoft could almost certainly do with a cull, to make the company as nimble as it needs to be may take more than 5,000 jobs.

Satya Nadella’s grand vision

Microsoft CEO Satya Nadella lays out the company’s strategic future

From a PC on every desktop to a services and devices company and now “productivity and platform company for the mobile-first and cloud-first world.”

Microsoft CEO Satya Nadella’s long missive lays out where he’s taking the company.

It’s a radical shift from the company of the Gates and Ballmer years.

In order to deliver the experiences our customers need for the mobile-first and cloud-first world, we will modernize our engineering processes to be customer-obsessed, data-driven, speed-oriented and quality-focused. We will be more effective in predicting and understanding what our customers need and more nimble in adjusting to information we get from the market.

This describes a very different company from five years ago; it implies an end to bureaucracy and management conveniences like stack ranking; if Microsoft is really going to be more nimble, then it means a smaller, more focused management.

In 1995, Bill Gates turned Microsoft around in a few months when he realised the strategic mistake he’d made in underestimating the impact of the Internet, so the company has adapted quickly to dramatically changed times in the past.

Whether Microsoft can adapt and maintain its position in a computing world very different to the one it once dominated will be among the great business studies of our time.

Microsoft’s third attempt at tablet computing

Microsoft launches the third release of the Surface tablet. Will it be the successful version?

At the time Microsoft launched the second version of its Surface tablet, I suggested the company was hobbled by its reputation for taking three attempts to get things right.

Yesterday, Microsoft launched its third version of the Surface.

We’ll now see how well they do.

Microsoft and home automation

Microsoft play catch up in the home automation market with their Insteon partnership

An major Internet of Things story this week was Microsoft’s partnership with home automation vendor Insteon.

This is a fascinating development for Microsoft, particularly given the lukewarm market adoption of Windows tablets and phones.

While Microsoft have some substantial advantages with their internet of things offering for the industrial and commercial markets, home automation is a crowded field where the company is playing catch up.

For Insteon, a partnership with Microsoft doesn’t matter while they have open standards along with support for both iOS and Android, for Microsoft though they have a lot way to go to make a dent in a market that a decade ago many thought they would have dominated.

Microsoft and the Internet of Your Things

Microsoft has come the IoT party with the ‘Internet of Your Things’ tagline

Microsoft has come late to the Internet of Things party, but it is has a good angle with it’s ‘Internet of Your Things’ tagline.

General Manager of Microsoft’s embedded systems division, Barb Edson, spoke with Decoding The New Economy about the company’s strategy with the Internet of Things.

For Microsoft, the emphasis is on the enterprise side of the business with Edson describing their strategy of “B2B2C” where the value in the IoT lies in managing the data for the businesses providing consumer services.

Most notable is the company’s IoT tagline, as Edson says; “from Microsoft’s perspective we view the Internet of Things as ‘the internet of your things.”

“Lots of companies out there talking about the Internet of Everything that there’s 212 billion devices, why do you care as business executive. You care about your things.”

Microsoft’s strategy is based on leveraging their own assets such as Azure cloud services, SQL Server and Dynamics along their customers’ existing infrastructure.

This retrofitting the internet of things to existing infrastructure is illustrated by Microsoft’s using the London Underground as its main reference site.

Connecting all 270 stations of London’s 150 year old Tube network to the IoT is a massive undertaking and one that can only be done by retrofitting existing monitoring and SCADA systems.

Interestingly the case study only look at Phase One of what appears to be pilot project in selected locations, the Microsoft spokespeople were a little unclear on this when asked.

The London Underground is only one example of millions of organisations that will grapple with adding existing equipment to the internet of things in coming years; it’s an opportunity that Microsoft has been smart to identify.

Edson however is clear on how Microsoft intends to help companies deal with the information overload facing managers, “I think the most exciting thing is we’re seeing real business problems being solved.”

Microsoft’s not like everybody else

The first advert for Microsoft’s Nokia phones is a little mysterious and worrying

“Not like everybody else” proclaims Microsoft’s first ad for its newly acquired Nokia phone division.

In what way the Microsoft-Nokia product isn’t like its Apple and Android competitors isn’t clear from the ad, but hopefully they’ll tell us.

The real concern with the Microsoft ad is that it again appears the business is being left behind in a marketplace shift as Google, Samsung, Apple and all the other smartphone leaders move to integrate their phones with smarthomes, fridges and even football stadiums.

Sadly it might turn out that, once again, Microsoft isn’t like everybody else.

Windows XP and patches

The Heartbleed security certificate bug is an illustration of how tough life is going to become for Windows XP users in the near future.

It’s notable that the long flagged end of Microsoft’s support for Windows XP happened the day before the Heartbleed bug, one of the most worrying security flaws we’ve seen was publicly revealed.

One of the questions that has bugged many of us in the industry – pardon the pun – is whether Microsoft would back down on its insistence they would not issue security patches for Windows XP when a major exploit became public.

With between 15 and 30% of the world’s desktop computers still running XP and 6,000 websites reportedly running on the superseded system, it’s hard not to see how Microsoft could justify not sending out an update should an exploit the size of the Heartbleed bug become apparent.

As it is, there may be some argument for updating some of the security certificates in the Windows XP and the older versions of Internet Explorer in the light of the Heartbleed bug, we’ll wait to see on that.

While Heartbleed doesn’t directly affect Windows XP computers, it’s still a reminder that life is going to get tough for those running an unpatchable operating system.

Holy wars and internet empires

Steve Jobs declared Apple would wage Holy War on Google in 2011 in an effort to secure an online empire

A regular topic of this blog has been the rise of the internet empires that want to lock users into their kingdoms.

On the edges of these empires things can get ugly as the competing groups fight for supremacy and to capture users.

In these wars, no-one was capable of getting uglier that Steve Jobs.

Which makes Steve Jobs’ declaration that 2011 would be a year of Holy War with Google unsurprising.

The statement typical Jobsian hyperbole, but we should under estimate just how serious Apple’s staff would take such a statement.

Apple’s intention to wage ‘holy war’ illustrates just how high the stakes as the online empires try to capture users.

Those Holy Wars and the reason they are being fought is something all of us should keep in mind when we’re asked to choose between Apple, Google or Microsoft.

Bill Gates and the fight for trustworthy computing

Microsoft’s task of securing its software was a huge undertaking, one that isn’t over yet.

One of the great, and possibly under recognised, business achievements of the computer age was Bill Gates’ recognition that Microsoft’s online strategy was flawed shortly after releasing Windows 95. A few years later he had to repeat the task when the company found its products were almost dangerously insecure.

In a sprawling account of the company’s response to the security problems at the turn of the century, Life In The Digital Crosshairs, describes how Microsoft’s engineers responded to their then CEO’s call for Trustworthy Computing.

The problems at the time were vast, compounded by Microsoft’s failure to take security seriously – the first version of Windows XP came out without a firewall which ensured thousands of users were quickly infected by the computer worms rampant on many ISPs networks at the time.

As the story tells, it was a long difficult task for Microsoft to change complex and interdependent computer code involving 8,500 of the company’s engineers.

One suspects the cultural challenges were even greater in getting the managers supervising the army of engineers to understand just how serious the security threat was to Microsoft’s users.

The biggest challenge though was Microsoft’s own product line; because the company hadn’t ‘baked’ security into its software, key products like Microsoft Office relied on lax security practices to work properly.

Office and Windows also had the problem of legacy code and applications; one of Microsoft’s selling points over Apple and other competitor systems was that the company took pride in supporting older hardware and software, this in itself creates security risks when programs designed in the MS-DOS days still want to write to the system kernel.

For Microsoft the journey isn’t over, although the shift to cloud computing has changed – and simplified – the company’s security quest by making legacy issues in Office and Windows less important.

Microsoft and Gates’ success in seeing off the threats posed by the internet gave the company another decade of computer industry dominance, however dealing with security issues was nowhere near successful.

In the end however it wasn’t security issues that saw Microsoft lose its dominance; the internet eventually prevailed as Apple revolutionised mobile computing while Amazon and Google improved cloud services.

With Bill Gates reportedly finding himself getting more involved in the company he founded, the challenges of both the internet and security are two that he’s going to be very familiar with. It will be interesting to see what we write about Microsoft in 2022.

Disrupting the smartphone market

The Tizen and Firefox smartphone systems threaten to disrupt the entire industry and ruin the plans of both Apple and Google.

It’s been a long time since we’ve had a three or four way war in the technology industry, with most sectors settling down into a two way fight between alternatives.

Mozilla’s promised $25 smartphone project threatens to open the mobile industry into a three way battle just as it appeared the market had comfortably settled down into an Android and iOS duopoly.

Now we see a three way race and possibly four if Samsung can get traction with its Tizen operating system that it’s bundling into the latest version of the Gear smartwatch.

One positive aspect of the four way battle is that three of the participants – Firefox, Tizen and Android are relatively open so compatibility between them isn’t impossible.

For Google and Apple though, this four way tussle presents a problem to their business plans.

Apple’s iOS ambitions of putting the software in smarthomes, connected cars and, possibly most lucratively of all, into retailing with iBeacon are threatened by a fragmented market and a rapidly eroding market share.

For Google, both Firefox and Tizen threaten the dominant position of their Android operating system that forms a plank in the company’s ambition to control the planet’s data and become an ‘identity service’.

Worse still for Google’s information ambitions, Firefox is working with Deutsche Telekom on a security initiative that will lock away users’ data.

So the stakes are high in the smartphone operating systems wars.

It’s early days to forecast the demise of either Android or Apple iOS, which is unlikely in the short term, but if Firefox’s operating system does take hold it will mean the smartphone industry is about to become a lot more complex.