This has been a very bad week for Microsoft. Earlier in the week, Redmond announced what everyone was already expecting; that the much anticipated release of Vista, Microsoft's new Windows software platform, will be delayed until 2007. This is a big deal since Microsoft will now miss the critical holiday selling season. Reeling from yet another delay, Microsoft named Steve Sinofsky, the former Office chief, to head the Windows unit.
But, that's small potatoes. The bigger news here is that Microsoft is crumbling under its own weight and is in danger of becoming increasingly irrelevant as a force in the consumer software industry. As
Business Week noted, "the delay raises larger questions about Microsoft's ability to innovate at today's pace." Indeed, the whole business model and process of releasing monolithic packaged software in three or five year cycles is an archaic notion in today's Web services world.
Update: Kevin Johnson, Microsoft's Co-President of the Windows division, sent an
email yesterday to his entire group laying out the challenges facing Mircrosoft today. Specifically, he stressed the need for greater agility, explaining that MSFT needs to: "
Lay the foundation for accelerating our pace of innovation, including focusing on ways to improve clarity of decision making, drive greater accountability, and reduce layers in the organization so we can move faster. It also means utilizing existing expertise within the division to embrace services -- and rapid release cycles that services can enable -- to all aspects of our business."
While Microsoft continues to futz around with Vista's 50 million lines of code [
Update: According to a
report this morning, up to 60% of the Vista code will have to be rewritten before launch], its competitors are re-inventing the way in which consumers will access and purchase software. Take Google for example. It is quickly putting together the pieces to challenge Microsoft's dominant Office product suite . Two week ago, Google acquired a small Web-based word processor company called
Writely. Writely is a free collaborative web application that offers many of the features of Microsoft Word. However, unlike Word, Writely doesn't require an install, is updated regularly (not every five years) and can be accessed on any computer or browser. More significantly, Writely provides Google with a natural springboard for introducing other Web-based productivity applications (can you say GOffice) as an alternative to Microsoft's desktop software.
As if that's not enough to send Bill Gates to the medicine cabinet, today
Michael Robertson announced the release of
AjaxWrite, another browser-based word processing application. I've tried AjaxWrite and it's simply awesome. It looks and feels like Word, reads and writes Microsoft Word formatted documents, has tabbed browsing for easy access to multiple files and documents, is quick and responsive and it all lives in a browser. Oh yeah, and it's free.
What we are witnessing is a revolution in the delivery and economic model for computing software applications. As Michael Robertson explains:
The impact of this shift in how software is delivered to users cannot be understated. First and foremost, we're blowing up the economic model that companies like Microsoft and Adobe have built their empires around selling packaged software for big dollar amounts. Software is transforming into a service more akin to web mail, news, IM and VoIP where the basic offering is free. That doesn't mean that the companies behind these services don't make money, but that the way they make money will change. Can Microsoft adapt and thrive in this new Web 2.0 world? The recent launch of
Windows Live suggests that they are on the right track. But, as someone once said, supertankers are more likely to sink than to sprint.