Microsoft Faces Uncertain Times

Microsoft Faces Uncertain Times

Whoever winds up running Microsoft has a tough and uncertain climb ahead

So many massive changes have been happening at Microsoft these days that it’s hard to keep track of them all. No doubt the biggest change was the shakeup in leadership, with Microsoft CEO Steve Ballmer announcing his intention to retire. Next was the Nokia deal in which Microsoft jumped headfirst into the hardware business by buying Nokia for $7.2 billion. Then there are the many ancillary issues, ranging for the end of TechNet subscriptions and the marketization of the MSDN site to the discontinuation of the Masters Certification program—not to mention Microsoft’s recent reversal on the early release of Windows 8.1 and Windows Server 2012 R2. Perhaps Microsoft needs to be listening to its best customers a little more closely.

Ballmer Stepping Down

Plenty of pundits have been calling for Ballmer to step down. Although Ballmer might have made a few missteps and received more than his share of bad press, in my opinion he’s no failure. Yes, he’s responsible for the unpopular Windows Vista and Windows 8 releases, but those are consumer products. He did what few other people could have: He continued and even extended Microsoft’s dominance in the enterprise.

Microsoft is the clear leader in the enterprise, and its enterprise server business is very profitable. True, it’s clear that Microsoft has lost touch with the consumer market, and that’s ironic because it's where Microsoft's roots are. The company's original popularity swelled as people began adopting Windows 3.1 and bringing it into the enterprise form the bottom up. There are certainly some parallels between this situation and that of Apple's iPad, but the Bring Your Own Device (BYOD) market is much bigger than just the iPad.

Microsoft Buying Nokia

The purchase of Nokia was basically a foregone conclusion since Nokia changed its business strategy to focus on Windows Phone—an undoubtedly tough move but also a business-saving decision. Even so, it’s clear that it’s far too late for this kind of move to significantly change Windows Phone’s position in the phone market, which has been (and will continue to be) dominated by Google Android and Apple iPhone. However, it's also disturbing to Microsoft’s hardware partners that Microsoft is further expanding its hardware offerings beyond the Surface.

The timing of the Nokia acquisition seems suspiciously related to Ballmer’s announcement. Because he’s obviously still around, it’s a bit early to name a successor to Steve Ballmer. However, considering that Microsoft’s goal is to transition from a software company to a devices and services company, you would think that a frontrunner has to be Stephen Elop, ex-Microsoftie and CEO of the recently acquired Nokia—and soon to be head of Microsoft’s Devices division.

Moves Unpopular with IT

Microsoft has also made some unpopular moves over the past few months—especially according to its rank-and-file supporters, the IT community. Microsoft’s ever-stronger push toward the cloud is certainly making IT and database administrators feel insecure by threatening to move their jobs into the cloud. Clearly related is Microsoft’s unpopular decision to shut down TechNet, which allowed IT pros to download and test copies of on-premises enterprise server and desktop OS software. Ending the Master Certification Program will remove another key set of supporters and advocates from the IT community. After all, if your IT services come from the cloud, you don’t need on-premises “master” experts.

Related: Microsoft's Retirment of the Certified Master Program

Another inexplicable and unpopular move was failing to make an early release of Windows 8.1 available to businesses. Although Microsoft eventually relented, you have to wonder what type of thinking leads to this kind of decision in the first place. How can Microsoft expect companies to deploy an OS when those companies can’t test the release version? Testing a preview just isn’t the same. While on the subject of Windows 8, I believe Windows 8 has also affected the adoption of Windows Server 2012. Do you think admins wanted the new Windows Metro interface? Of course they didn’t.

Time to Listen

Whoever winds up running Microsoft has a tough and uncertain climb ahead. The days of Microsoft's dominance in the enterprise are threatened by stiff competition both in the devices and in the cloud. Microsoft's recent questionable moves make you question whether the company really values its core IT customers. The next leader of Microsoft needs to put an end to this “we know better than you” attitude that it seems to have developed, and this person needs to start really listening to its customers—and not just the big enterprise customers. As Windows 3.0, the iPhone, and the iPad clearly show, it’s not the enterprise that shapes that future direction of the market and determines which companies and technologies succeed and which ones decline. And though companies certainly have to change with the times, it’s always a mistake to not listen to your customers.

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