Maybe it was Cringely who suggested it, but I'm sure the idea has been thrown around a lot. Break Microsoft up. I with the wisdom of that idea would finally get some traction inside Redmond. Or at least it's my interpretation that the big shakeup there is not going to result in the spinning off of companies.
The news is explained thusly:
Robbie Bach and J. Allard, both of whom were both instrumental in creating consumer products through Microsoft’s Entertainment & Devices Division, both are leaving the company as part of a broader reorganization, reports TechFlash. As a result, Steve Ballmer, Microsoft’s CEO, will initially gain greater control over the division, which includes the Xbox, Zune and Windows Mobile products.
Ballmer? I'm trying to imagine how exactly Ballmer helps Microsoft do anything new or exciting. New and exciting is what must occur... What am I saying? That's never going to happen. Microsoft is a bit too far up in the woods for the culture of 'exciting' to permeate. Microsoft is a university and a universe. But it's sluggish and bound up in the slow that never quite leads the market. Of course, I'm biased. There are some outstanding things that Microsoft does, just not quite as great as they ought. They leave a lot of tech on the table - I mean an entirely too large chunk.
What I learned about Microsoft in my months in Redmond is that it's a Bank and a Marketing Machine, and because of those two things, all ideas are shaped in very particular ways, meaning stuff is matrixed out to the infrastructure and a lot of good stuff doesn't survive the process. Stuff that with the same amount of attention in a smaller organization might work just great. What saves Microsoft is the leverage the good-enough stuff gets when the market share gets past the adoption tipping point. Take Sharepoint for example. It is my studied opinion that Sharepoint is craptastic squared. There are so many other better ways to provide the functionality of Sharepoint that it's almost impossible for me to imagine somebody as smart as Ray Ozzie would be involved. It may have ingested all of Groove's technology, but it completely lost all of Groove's appeal. But now Sharepoint is too big to fail, and mediocrities all over the world will support it from now until doomsday. Proprietary lock-in. Leadership through religious fanaticism. That's what the Microsoft machine produces. Choice is the enemy, and therefore Microsoft has very few choice products. Yeah I use BaseCamp, and I'm looking at Google Sites.
Microsoft is the king of Gaming. So what disturbs me about this development is that the golden egg that is the XBox360 franchise is in jeopardy. Yes the Zune is a disaster. Everybody in that portable music player market got owned by Apple, just demolished. Window Mobile too. I never took that seriously - I mean did it ever even really compete with Nokia? Now that HP has Palm, there's no place for Windows Mobile to go. HP was the killer hardware for Windows Mobile back in the day. Those days are over. And that new roundy thing that looks like it feels like the Palm Pixi from Microsoft is probably going nowhere. So 2/3rds of this division is a nightmare. Painful.
If I were Ballmer what would I do?
I would abandon Microsoft technology and get some designers to design consumer products from scratch. It has to be as radical as GM spinning off Saturn. It might be too late, but it's got to be that independent. Let Microsoft use its money to allow multiple brands to emerge. XBox is a brand. Nobody cares that it's Microsoft. It works fine on its own.
Here's what I'm suggesting - here me out. Look at your small consumer electronics companies. Microsoft has brain overkill for that product market. They only have to be marginally smarter and use their cheaper money (big deal) to make an impact in those markets, and downmarket from Apple's entry into the home electronics space, they can win. They can use the Microsoft mojo to hire top creative talent and try some really cool things. I'm going to list a handful of players I think Microsoft could outwit.
VTech. Audiovox. Jensen. Cobra. . But here's a real killer - a company and business that could have been inside Microsoft: Vizio. Yes them. Microsoft did nothing in TV, and now it's never going to catch up to Google TV whatever that might be. Before you knock the idea, consider Sync. Microsoft partnered with Ford and now their tech is making a big difference in car audio. If I was Ballmer, I'd be buying up shares of Panasonic, Sharp or Sanyo.
If Microsoft is going to survive as a huge company, then it needs to understand how to brand like a small company. It can learn from consumer goods companies like P&G, SCJohnson and Clorox.