Yet another set of Street reports and research reports have stopped just short of describing the PC market as “dead”, though a close analysis of the data seems to suggest that the declines are hitting a plateau. My view has always been that we’re seeing the “browser bunch”, those who see technology as a pathway to the Internet, migrating to smartphones and tablets. The people who really need to compute are much less likely to abandon the PC, but that will still create market conditions that are downright scary for those whose wagons have long been hitched to the PC star. Windows 8, we hear, hasn’t succeeded in driving a PC refresh cycle. Who thought it would, other than perhaps Microsoft, is the mystery to me.
Microsoft is obviously at risk here because their incumbency is almost totally PC-based. The company is now reorganizing to avoid the classic problem of product silos, but if you look at the details they’re really only creating a smaller number of bigger silos. No matter whether you have two or ten product groups, you still have to define and enforce a unifying vision of your market or you’ll never tie them together. If you can’t link your products, you’re not going to enjoy any symbiosis or pull-through.
Microsoft is pulling all its system software under one group, all its “devices” into a second, its Office and Skype products into a third, and the final group will be its cloud and enterprise stuff. While going from eight silos to four does reduce the issues of “taking a dependency” that have crippled Microsoft’s cross-silo coordination, it’s a smalls step. Clearly this new structure doesn’t make independent products, it may in fact make hardware/software coordination harder and it seems it will hamper cloud evolution. Why separate the cloud when all your other stuff depends on it?
It’s not that Microsoft couldn’t fix the cloud-integration problem, but that if they knew how to do that they’d never have needed a reorg in the first place. What I think is lacking with Microsoft’s vision is that it’s not a vision but a personnel exercise. Like every tech company on the planet, Microsoft’s biggest problem is coping with the “cloud revolution”. PC problems are due to the cloud, even if we don’t think of “the Internet” as “the cloud”. Opportunities in content, applications, services, devices, games…you name it…are all being generated by the cloud. No matter where you put the cloud organizationally, you have to put it on a pedestal in that you’re making it your positioning centerpiece. Azure could be considered the technical leading edge of the cloud platforms, but you’d never know it from Microsoft’s positioning.
Microsoft’s dilemma can teach some lessons for networking vendors too. If you look at the networking giants of today, you can argue that only Cisco has a notion of charismatic and cloud-centric marketing. While Cisco has product groups, they don’t seem to be political fortresses in the same way that they’ve become in other companies. Alcatel-Lucent has yet to get beyond hyphenation in integrating its culture, NSN has avoided product collisions by shedding product lines, Ericsson wants buyers to pay for them to integrate products by buying professional services, and Juniper wants its product groups to make their own way in the world without any collective vision.
The cloud is the future, and maybe the problem vendors are having in accepting that is their narrow vision of the cloud. Elastic, fully distributable, resources in compute, storage, and knowledge are game-changers in how we frame consumer and worker experiences alike. Something like Google Glass and augmented reality could be a totally revolutionary element in our work and lives, and yet we’re not really even thinking about just where it could go. People write more about “privacy risks” to Glass than about Glass applications. Show me how wearable tech risks privacy more than “carryable tech” like a smartphone!
The cloud vision of what-you-need-when-and-where-you-need-it revolutionizes networking, computing, application design, appliance design—pretty much everything. Microsoft and all my network vendor friends can see this revolution from either side of the barricades, pushing to lead the charge or hiding in a woodpile. Every company in the tech space needs to embrace some vision of the cloud future and promote their products and evolve their strategies and refine their positioning and establish internal lines of communication to support that vision. If your company hasn’t done that, you are behind, period.
The specific things we need to be thinking about? Three. First, how do you build componentized software that can be assembled to create the new unified cloudware that is part application and part service? Second, how do you deploy and operationalize an experience that doesn’t have a single firm element, either in terms of resources or in terms of mission? Finally, what does a network that hosts experiences look like? And don’t be tempted to pick a single element from my list that you’re comfortable with and hunker down on it! You’re all-in or all-out in this new game. Even if you don’t make software or don’t make networks, you have to make something that accommodates all these changes and so you have to promote a holistic vision of change.
I’m learning a lot about the cloud future by trying to solve some of these problems in a realistic way, and the thing I’ve learned most so far has been that we still don’t think holistically about “experiences” at the consumer or worker level, and holistic experiences are all people ever see. The whole of the Internet, after all, is compressed into a social portal or search engine or a Siri voice recognition process. The whole of technology, for most, is compressed into the Internet. This is an ecosystem, and if you don’t know where you sit on the food chain naturally you have little chance of improving your life.