Microsoft a victim of centralized thought processing

Stan Beer
Wednesday, 05 July 2006 22:30

Opinion and Analysis

Back in the 1980s, IBM and its centralized computing model was the bogeyman that had to be defeated. Distributed computing, which later evolved into client server computing and finally the internet was the answer. Believe it or not, at the forefront of that revolution was Microsoft with its PC on every desktop philosophy.

Today, however, Microsoft has become the very same bogeyman that IBM was in the 1980s. However, Microsoft's enemy is not the intransigent adherence to a proprietary centralised computing model or even its own proprietary distributed computing model. Microsoft's problem is its lack of innovation and, more specifically, innovation in the area of web services. That problem stems directly from its human resources policies.

Try as it might - and it has tried - Microsoft just cannot seem to make an impression in areas outside of its legacy money spinning areas of Windows, Office and to a lesser extent database management systems. Essentially. Microsoft's last two great internal developments were Windows 95 and Office 97. Everything else since has been tinsel and window dressing. As a popular TV program might ask, why is this so?

A clue to the answer lays in a recent New York Times article titled "Microsoft is Looking for More Elbow Room". The article, which is essentially about real estate, got us thinking about Microsoft's problems.

At present, Microsoft has more than 30,000 staff employed at its Redmond campus in washington State. We've been there and it's like a small to medium sized city. However, with the aid of a uS$1 billion investment from Microsoft's bottomless pit of a treasure chest, the city is going to grow by a massive 12,000. On top of that, Microsoft is frantically renting and buying up all the available office space it can get its hands on in the Redmond area.

Yes, Microsoft is still much loved by many local residents of Seattle as it has put a once soggy US backwater on the map. Would "Sleepless in Seattle" or "Frasier" have ever been made if Microsoft had never existed? Would we have ever known about temeperate climatic effects of Japanese currents? Microsoft has also created much local high quality employment in the city. However, the one company town boom is now starting to wear a little thin and residents are starting to complain about Microsoft precipitated traffic snarls.

More important than the logistics of moving Microsoft developers to and from work, however, is the effect of concentrating so much human intellectual capital in one location. It has often been said that behind great companies stand great people. At the present time, it is not all that clear whether the people standing behind Microsoft are all that great. In fact, many of the good ones have recently defected to Google.

Why is this so? Well software innovation is one of those skills that is part science, part intuition and part genius. The best software developers are found all over the world - the US, UK, Australia, Israel, Finland, The Bahamas, Poland, Russia, China, India - you name a place on the planet and chances are there is a budding software development hot shot doing amazing things on a bedroom PC. For some reason, however, Microsoft insists that all of its software developers must coexist in the one place at the one time in a small corner of the world called Redmond. While Redmond is a nice place, not every good developer wants to live there or work there.

A quick look at Google's website tells you that the company actively recruits the best development staff from all over the world. They don't need to leave their home countries or quite often even their home cities to work on leading edge web development projects. By contrast, Microsoft does what it can to attract whatever developers it can get to move near Redmond. No doubt, many good developers do make the move for the chance to work at Microsoft. However, many more do not. As a consequence, the most innovative development happening at present is coming out of companies like Google, while Microsoft appears to be bereft of ideas.

Microsoft knows it has a problem and seriously wants to address it. The world's largest software company certainly has the money to restructure its software development operations. However, the fact that Microsoft intends to spend US$1 billion to expand its Redmond campus to house 12,000 more development staff shows that the people running the company still haven't got the message. Microsoft, please be aware that most of the best developers in the world live outside of Redmond.