InfoWorld It cant be easy being Ray Ozzie. Microsofts chief software architect is just 18 months into the job as Bill Gates handpicked successor, yet depending on whom you ask, his tenure will either signal a bold new era for the company or mark the beginning of its terminal decline.
From the perspective of Microsoft shareholders, the picture certainly looks grim. After a decade of timid stock performance, the fiscal year that ended June 2009 saw Microsofts net revenue decrease for the first time in its history. It also announced its first-ever layoffs and has since exceeded its original estimate of 5,000 pink slips. But worst of all, for the first time in recent memory, Microsoft confronts a rival of goliath proportions that seems capable of going the distance with the software giant.
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That rival, of course, is Google, and the search leaders relentless expansion is battering Microsoft on every front. Googles emphasis on the Web as an application platform challenges the primacy of PC software and operating systems, Microsofts traditional cash cows. Its forays into mobile devices call into question the very concept of desktop computing.
Its Web-based services and open source software fly in the face of Microsofts core business model. Philosophically speaking, Google is the anti-Microsoft and its making a killing at it.
By comparison, the worlds largest software vendor has adapted poorly to the changing market landscape. On the Web, Internet Explorer is dead last in standards compliance, and its critical security flaws sometimes go unpatched for months. Windows Mobile claims just 7.9 percent of the smartphone market, and according to Gartner, sales are slowing. Microsofts vaunted new search service, Bing, has won few converts from Google, except where Microsoft has strong-armed them into using it. In short, while it may be first in desktop software, Microsofts track record outside its comfort zone has been fairly dismal, enough so that in 2007, venture capitalist Paul Graham declared, “Microsoft is dead.”
But Ozzie has a plan. With the Windows division back on track and new version of Office set to debut this year, “software plus services” is the new mantra at Microsofts Redmond, Wash. headquarters. It marks a strategic shift that will transform everything about the company, from how it develops, markets, and deploys software to its relationships with its customers.