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What Ails Microsoft
A much-discussed reorganization is necessary—but not as much as a focus on the next big thing, instead of the last big one.
Jul 21, 2013—
The business media was awash last week with articles covering Microsoft's plan to reorganize itself and do away with its product divisions. Most of the articles I read suggested that CEO Steve Ballmer's goal was to make Microsoft more like Apple, which is organized around functions, rather than products. I'm not in the business of telling other CEOs how to run their companies, but I think Microsoft's problem is one of vision—and that's one problem most technology companies share. Let me explain.
Every big company (except perhaps Apple) has divisions that sell different products. They compete with each other for talent within their business, marketing funds and CEO mindshare. The various divisions dislike selling each other's products, as they are rewarded based on how their own divisions do. This is not uncommon, and for many companies, it also isn't crippling. Just look at General Electric. Its divisions operate as virtually separate companies, and it has been highly successful.
If Steve Ballmer read Geoffrey Moore's books, he'd know that displacing a gorilla (a dominant technology provider) is very difficult. Perhaps Microsoft learned the wrong lesson from its first battle with a gorilla. Netscape dominated the early market for browsers, but Microsoft leveraged all of its resources and eventually crushed the startup. As a result, Microsoft seems to have learned that it can beat gorillas. Instead, the firm should have learned that it took massive resources to beat a small firm like Netscape, so it's doubtful that it could dislodge a wealthy company like Apple or Google.
What does this have to do with RFID? Two things.
First, RFID is a big opportunity—for Microsoft and for many other technology players. Microsoft has a good RFID product called BizTalk RFID. But amid all the focus on the last big thing, the company has not done much with its one product in a market that it could dominate.
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