Simon Wardley has written an interesting post claiming that Microsoft's biggest enemy is not Google, Facebook, or Apple -- it's Microsoft. Wardley's research suggests that inertia makes it easy for Microsoft to continue doing what it's done in the past with great success. Inertia is also an important force within IT departments. IT leaders seeking to help their businesses differentiate from the competition should guard against technology inertia.
As Bill Gates said, success is a lousy teacher
Wardley spoke at Oscon 2010 about how open source vendors could disrupt market incumbents by taking advantage of the incumbent's existing business model. In his blog post, he quotes Bill Gates, who once noted "success is a lousy teacher." Wardley explains:
That's one of those basic lessons that often gets forgotten in business. In this world of competition, there are two fronts to fight on. The external front includes those competitors who attempt to either gain a creative leadership position or to disrupt your existing model. The other front is internal and against your own past success.
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Vendors often focus on external competition, but the ability to compete effectively externally is directly impacted by how the degree a vendor's corporate culture can allow it to look beyond past success. Historical success in a given product area creates sacred products that must be protected and definitely not commoditized when considering new opportunities or new competitors.
Wardley claims that Microsoft's recent cloud moves, while admirable, aren't enough to compete in a services-based marketplace built around open source:
While Microsoft has made much of a fanfare about its recent moves into the cloud, it was a probably a significant internal battle for Microsoft just to make the change from products to services. However, this new world is likely to be rapidly commoditized to marketplaces based around open source and hence the real question becomes whether Microsoft will be able to make the further change necessary to survive in that world?
Microsoft's future business should be intertwined with open source in the domain of utility services. Unfortunately, the last group of people who are usually willing to accept such a change are those who have built careers in the previous domain; that is, products.