At Microsoft, internal competition has created a "dysfunctional corporate culture" that thwarts innovation by belittling emerging teams that work on cutting-edge technologies, a former executive wrote in a New York Times op-ed column Thursday.
Dick Brass, a former Microsoft vice president who worked on tablet PCs, wrote a scathing exploration of the Redmond-based company’s internal culture. Even as Microsoft reports record earnings, it "has become a clumsy, uncompetitive innovator," Brass wrote.
What happened? Unlike other companies, Microsoft never developed a true system for innovation. Some of my former colleagues argue that it actually developed a system to thwart innovation. Despite having one of the largest and best corporate laboratories in the world, and the luxury of not one but three chief technology officers, the company routinely manages to frustrate the efforts of its visionary thinkers.
In the op-ed, Brass reveals a number of innovative products he argues high-up executives put the kibosh on – simply because they didn’t like the product or it threatened their own. One, he says, was ClearType, which used liquid crystal displays to make text more readable. It took 10 years for the technology to be incorporated into Windows, Brass wrote.
Another was internal resistance to a tablet PC. In 2001, the vice president then in charge of Office (that’d be Steven Sinofsky, now president of the Windows and Windows Live Division) intentionally kept the productivity suite largely incompatible with a stylus, Brass contends. "So if you wanted to enter a number into a spreadsheet or correct a word in an e-mail message, you had to write it in a special pop-up box, which then transferred the information to Office," he wrote. "Annoying, clumsy and slow."
These days, especially after last week’s launch of the Apple iPad, Microsoft’s absence from a list of the past decade’s top computer innovations is obvious: tablet computers (iPad), e-books (Amazon Kindle), smartphones (BlackBerry, iPhone), search engines (Google), music services (iTunes), digital video recorders (TiVo) and Web services (Facebook, Twitter). Sure, Microsoft has developed such products, and even beat some of the popular brands to market, but Microsoft’s versions weren’t the ones that caught on.
Some people take joy in Microsoft’s struggles, as the popular view in recent years paints the company as an unrepentant intentional monopolist. Good riddance if it fails. But those of us who worked there know it differently. At worst, you can say it’s a highly repentant, largely accidental monopolist. It employs thousands of the smartest, most capable engineers in the world. More than any other firm, it made using computers both ubiquitous and affordable. Microsoft’s Windows operating system and Office applications suite still utterly rule their markets.
The company’s chief executive, Steve Ballmer, has continued to deliver huge profits. They totaled well over $100 billion in the past 10 years alone and help sustain the economies of Seattle, Washington state and the nation as a whole. Its founder, Bill Gates, is not only the most generous philanthropist in history, but has also inspired thousands of his employees to give generously themselves. No one in his right mind should wish Microsoft failure.
Microsoft is nowhere close to financial failure. Last Thursday, it reported record revenue of $19 billion and record profit of $6.7 billion in the second quarter of fiscal 2010.
But more and more, it seems Microsoft may be close to innovative failure. Its Windows Mobile smartphone operating system arguably is the stalest on the market; its last major refresh came with the release of Windows Mobile 6 in 2007, and Windows Mobile 7 isn’t expected until later this year.
One could argue that the Xbox gaming console has been a success – and it has – but it is simply on par with competitors and brings in a very small percentage of Microsoft’s overall revenue. Project Natal, the Xbox 360 add-on coming in late 2010 that allows gamers to use their bodies as controllers, could bring some much-needed fresh innovative air to the company.
Windows 7 is proving to be Microsoft’s quickest-selling operating system ever, but – as Brass also points out – it is merely the newest version of a product Microsoft first developed two decades ago. The same goes for Office, a new version of which (Office 2010) is slated for release in June.
Anyone in the Microsoft Research labs might scoff at Brass’ op-ed. They also might point out that Brass left Microsoft in 2004 – a software company like Microsoft, the world’s largest, can change a lot in six years. Especially when many top executives have left Redmond in the wake of product failures.
Do you think Microsoft is fading from relevancy? Are there recent Microsoft innovations you feel should not have been overlooked? Will the company’s coming innovations turn the juggernaut around?
Read Dick Brass’ entire NYT op-ed here.
Updated 1:04 p.m.: Microsoft responds on The Official Microsoft Blog. (Hey, the name changed!)
"At the highest level, we think about innovation in relation to its ability to have a positive impact in the world," wrote Frank Shaw, corporate vice president for corporate communications. "For Microsoft, it is not sufficient to simply have a good idea, or a great idea, or even a cool idea. We measure our work by its broad impact."
Read the rest of Microsoft’s response here.