As I read a transcript of Microsoft President and CEO Steve Ballmer's keynote address at the Streaming Media West 2000 conference, I encountered an interesting passage that had little to do with the main subject (digital media). In the passage, Ballmer outlined the seven businesses on which Microsoft will focus in the future. Although the list holds few surprises, you seldom see an executive of Ballmer's stature so clearly define a company's direction publicly. I thought I'd enumerate the list he provided.
1. The Windows PC. Ballmer spent the least amount of time on this most obvious business. Since 1990 and the release of Windows 3.0, Windows has been a core Microsoft product, and—a decade later—we're still trying to break the shackles of the Windows PC's DOS underpinnings. With Whistler's release next year, it will finally happen.
2. Non-PC devices. Microsoft executives (e.g., Bill Gates) have referred to the "post-PC era" as the "PC-Plus era," and I think that's accurate—because the PC isn't going anywhere. The company is focusing on several non-PC devices, including the Pocket PC (nee Windows CE), the Xbox gaming console, and set-top boxes such as Compaq's MSN Companion and Interactive TV devices. Microsoft would like its success on the PC to carry over to non-PC devices, but the company doesn't see the increased use of other devices decreasing PC use. In the current holiday season, the market for consumer-oriented PCs fell, and customers turned to cheaper PC-like devices such as cell phones, Personal Digital Assistants (PDAs), and set-top boxes. But no one's replacing a PC with such a device. Instead, non-PC devices typically complement PCs.
3. Wireless. Microsoft is particularly interested in the high-bandwidth wireless spectrum, a market just waiting to happen. The company says that users will be placing video calls on cell phones and that it must have technology in place to support streaming video and audio for wireless devices of all kinds. Of all the businesses Ballmer outlined, the wireless business is the least defined. And it's an area in which the United States will continue to trail Europe and Asia, which have vastly superior wireless networks. Microsoft's "Stinger" smart phone is a first step, but it isn't ready yet and might not be until mid-2001.
4. The enterprise. The scalability and reliability of Windows 2000 and its successors remains a key Microsoft focus, especially given the sudden and unwelcome (from Microsoft's perspective, anyway) intrusion of Linux, a free server OS that's purportedly more stable and reliable than Win2K and Windows NT. Products such as Win2K Datacenter Server and Whistler-64 will help move Microsoft's product line up the scalability ladder, but only over time will people accept the (apparent) oxymoron "Windows stability." I place part of the blame on the name change to Win2K. If Microsoft had kept the name NT, the line's difference from the buggy Windows 9x line would have been more obvious to customers.
5. Microsoft Office. The Office suite has saturated the market, but it's still responsible for the lion's share of the company's revenues. In the future, traditional Office suites such as the forthcoming Office 10 and Office 11 will likely yield to Web-based services that use the NetDocs technology. But the transition will take a long time, and I don't expect end users to give up their CD-ROMs just yet, thank you very much.
6. MSN consumer services. Microsoft has bounced from one MSN strategy to another. MSN began as a traditional online service, became a melting pot of content sites (anyone else remember Mungo Park?), then became a more traditional ISP with a weird taskbar-based menu system, and is now a group of online services including Hotmail, Expedia, and Passport. A new client, MSN Explorer, offers users a one-window front-end to the MSN universe. Inexperienced users seem to like it, but what about power users and business users? Microsoft says it's working on a similar front-end for the corporate world and that the MSN Explorer interface previews the .NET user experience. Let's hope the future is more configurable than this first attempt.
7. The .NET platform. Of course, most of Microsoft's plans revolve around .NET, a platform for Internet-based software services. We've discussed .NET frequently—if you want more, please subscribe to .NET UPDATE.
The net result here (pardon the pun) is a company that's diversifying as the market expands beyond the traditional PC. Ironically, this approach mirrors Microsoft's strategy in the late 1970s and early 1980s, when the company supplied programming tools and applications software for any computer platform that came around, hedging its bets as to which platform would be successful. When the IBM PC took off almost immediately in 1983, Microsoft rode that horse to success, although the company has also backed the Macintosh alternative heavily. I rather appreciate the notion that Microsoft might again become a more well-rounded company—as its still-important Windows and Office businesses mature, letting the company reach out to new markets.
Thanks to all who wrote in about their Win2K deployments. As expected, the amount of mail was incredible, but I was rather impressed to see that most respondents had nothing but good things to say about their Win2K experience. I'll have the results of this impromptu survey next week.
