Microsoft's reality problem

Apple's big iPad splash highlights Microsoft's failures as a company, notes a former Redmond exec. And things are only going to get worse

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Needless to say, Microsoft felt compelled to respond, via its Flack du Flacks, Frank Shaw:

At the highest level, we think about innovation in relation to its ability to have a positive impact in the world. For Microsoft, it is not sufficient to simply have a good idea, or a great idea, or even a cool idea. We measure our work by its broad impact.... for a company whose products touch vast numbers of people, what matters is innovation at scale, not just innovation at speed.

In other words: What really matters is that a billion people use your products, even if they mostly suck. Which means that, despite getting beaten like a pair of bongos in every new market it has entered over the last decade, Microsoft still hasn't woken up and smelled the Starbucks.

It's not surprising. I remember sitting in a conference room with a couple of bright Micro-geeks more than 10 years ago.  This was around the time Bill Gates had his sudden inexplicable memory lapses on the stand during one of Microsoft's various antitrust trials, and when companies as conservative as Compaq were volunteering information about how Microsoft had strong-armed it into dropping the Netscape browser from its line of Presario PCs.

I asked them what they thought of these things.

Yes, one of them admitted, "We have a perception problem."

You don't have a perception problem, I said. You have a reality problem. And the reality is that, despite whatever people living inside the Microsoft bubble might think, the rest of the world thinks you're a bully. And nobody likes bullies.

Another of Microsoft's big reality gaps is its insistence that it's one of the great tech innovators. Sure, Microsoft Research can go head to head with the best labs in the world; it's done some amazing things. But Microsoft's success is built on imitation, not innovation. Nearly everything it does, somebody else did first and usually better -- from graphical interfaces to music players, personal finance software, search engines, Web portals, virtualization software, phones, and PDAs, you name it.

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