How To Save Microsoft

Last week I had a heated debate with my friend Ben Tseng about how Microsoft is pure evil. While it is always fun to point fingers, I realized that it is probably more constructive to provide a plan to help them help us.

Here are some fundamental problems with the Microsoft model, how it will ultimately destroy them, and what to do now to solve them:

1. Inferior Products

Problem

Almost everything that Microsoft has tried to accomplish in the last decade has been a failure; Zune, Vista, IE, MSN, etc. The only reason why Microsoft is still pulling in huge numbers year after year is because the use of technology is increasing, not because Microsoft is producing good products.

Why it matters

The perfect case study of the effects of moving second, being complacent with inferior products is AOL. AOL moved to broadband too slow, and the once dominant Internet Service Provider is now stuck with a bunch of small fish web properties, hoping to hold onto anything that will keep it from drowning.

Likewise, Microsoft will not have any problems in the next year or five. People are going to buy Vista, people are going to buy Windows 7, but given a larger scope, they will become a GE or a Ford. Its lack of innovation is going to continue to give their competitors (Apple, Linux, Mozilla, etc.) leeway to continually chip away at their critical mass until one day Microsoft is going to wake up and realize that without its critical mass it is just a giant piece of fail.

Solution

The solution is simple.

Move first and push for innovation. Obviously Microsoft does this to some extent, but they need to be more vocal and evangelical. It has some cool technology in its labs (touch table, Seadragon), but nothing that is "game changing" like the new Macbook, iPhone, iTunes, Firefox Add-Ons, etc.

I know that just asking for a company to produce new and awesome products is a ridiculous task. The biggest asset that Microsoft has is its engineers, they're brilliant, let them showcase their brilliance. Here are some suggestions on how to do this:

• Use the Google 20% rule and let engineers work on their own projects for 1 day out of every 5


• Properly incentivize engineers. Microsoft has $9 Billion in the bank, it should give $50 million each year to the best projects. That's less than 1% of Microsoft's total cash to push out a ridiculous amount of "smart" ideas.


• Copy competitors and evolve their products. If Microsoft is bent on moving second, at least copy the good features and evolve the product. The UI of the Zune is archaic and unintuitive. Microsoft search results are a joke. Cash back for buying products, really? That's its big plan to salvage its billion dollar investment in web?

2. Closed Platform

Problem

Windows is a closed source platform. This is the most horrible and stupid decision that Microsoft has made.

Why it matters

There are hundreds of thousands of engineers, brilliant people, working on Linux. Every line of code is peer-reviewed by the best and brightest in the world. There are very few bugs, everything runs smoothly, at least relative to Microsoft.

Microsoft does not make its money from its kernel. Microsoft makes its money from the comprehensive operating systems package. Unless Microsoft disagrees with point #1 and is bent on selling inferior products with legacy support as a core business model, they have to agree that they want to produce a better product for less money.

Linux is a better product than Windows. The Apple operating system is the perfect showcase of this, it built its operating system (OS X) on top of BSD (a unix derivative with an open license to sell commercially). Microsoft can dramatically cut internal costs and development time by simply using a free and better product.

Open source engineers have basically agreed to work FOR F-ING FREE FOR Microsoft, and Microsoft works extra hard to turn them down. That is the stupidest business decisions, ever.

Solution

Microsoft should build its next operating system after Windows 7 using the BSD kernel. On top of this new operating system, build a virtual machine that will run old windows program so it can still have that precious legacy support.

This will open up the gateway of innovation because developers (ie. me) will no longer have to develop for 5 different platforms but rather focus their energy on developing a great application with one method of deployment.

If Microsoft is afraid that it cannot produce a better user experience than its competitors, then it is doomed to fail anyways. This is the only way for to survive in the long-run.

That's why Apple allows you to use Microsoft through Boot Camp. Apple knows that everyone will still opt for the Leapord experience because it is 5 million times more stable and enjoyable.

3. Attitude

Problem

Steve Ballmer is a jackass. He says so many stupid things that do nothing but infuriate and incite hatred. No one likes the company with the upper-hand, Microsoft is the epitome of the technological "man". That makes it inherently uncool, and when Steve Ballmer continually fuels the flames with his loud mouth, it just makes things worse.

Why it matters

Almost 50% of college students want to buy an Apple computer or laptop. This is no doubt a function of how uncool Microsoft has become.

Then the math is simple. Every year more people go to college and buy Apple computers in college, they realize that Apple is superior to Microsoft. Following graduation they will continue to use Apple. Given an infinite amount of time with the same trend, the young in college will be old in the workplace and start making the decisions necessary to change whole IT departments to be predominantly Apple or Linux based since they are better and cheaper products.

Microsoft needs to be more viral.

Solution

Fire Steve Ballmer or hire several aides to make sure he sticks to his talking points.

Microsoft has had some great PR campaigns (I am a PC, the Zune commercials, etc.), but they still need a lot more work. That means dumping Windows into rap videos, setting up college campus events, make cool products, focus more on creative ads like the Apple page-takeovers with similar undertones to their successful video ads.

Conclusion

Microsoft is the perfect representation of the Hare in the old anecdote of the Tortoise and the Hare. It is winning the race so now it is just napping, if it doesn't wake up soon, it is going to be crushed by this next wave of technological innovation.