Isolating the ailing online business from Windows - Today is Analyst Day at Microsoft and the question on everyone's minds seems to be how Microsoft plans to keep its ailing online business from sucking up more resources until Microsoft can find a way to make it profitable (or kill it for good). This week's news that CEO Steve Ballmer is reorganizing the Windows and Online Services businesses (while the head of those businesses leaves to run Juniper), should bode well for enterprise customers. Three years ago Microsoft merged Windows and its online services businesses together and since then Google has not only become master of the Internet search and advertising world, but of back office cloud computing, too.
At the same time, Ballmer admits that Apple, who as of the late 1990's was withering on the limb, has now become a major threat to Windows, even as Linux makes headway, too, reports the Tech-Ticker blog.
In this reorg, the Windows/Windows Live brands will remain together (Internet Explorer, the Live brands, Hotmail, Microsoft Messenger), which makes sense, since the direction of productivity applications for the enterprise is to the cloud. Meanwhile the ailing online unit (ads, ISP services -MSN- and search) will be isolated into its own P&L center and not mucking up the waters for Windows/software-plus-services.
Microsoft's efforts in online advertising are less about becoming a force in the advertising world and more about trying to fight its cloud competitors where it hurts them most -- their ad revenue. Ok, maybe that's not fair. Microsoft certainly would like to won this market and has wanted it ever since it launched a browser and then and ISP/portal service. But all of it was really an effort to protect Windows from the erosion of what was clearly the disruptive technology that could kill off client/server computing.
Guess what? The strategy didn't work, except to give Microsoft a bunch of giant data centers from which it can launch Ray Ozzie's software-plus-services strategy.
If Microsoft can isolate the online part of its business from Windows, perhaps the Windows unit will be more free to do what all next-generation software makers should do, collaborate with other cloud computing vendors out there. Cloud computing, which is the SaaS version of the SOA model, needs to be free to draw its service components from any excellent source out there. Microsoft should be learning to ditch its king-of-the-hill mentality and embracing the "data portability" model of the new era. Separation of church (Windows/cloud apps) and state (online ad revenue) is a first step in the right direction.
At the same time, Ballmer admits that Apple, who as of the late 1990's was withering on the limb, has now become a major threat to Windows, even as Linux makes headway, too, reports the Tech-Ticker blog.
In this reorg, the Windows/Windows Live brands will remain together (Internet Explorer, the Live brands, Hotmail, Microsoft Messenger), which makes sense, since the direction of productivity applications for the enterprise is to the cloud. Meanwhile the ailing online unit (ads, ISP services -MSN- and search) will be isolated into its own P&L center and not mucking up the waters for Windows/software-plus-services.
Microsoft's efforts in online advertising are less about becoming a force in the advertising world and more about trying to fight its cloud competitors where it hurts them most -- their ad revenue. Ok, maybe that's not fair. Microsoft certainly would like to won this market and has wanted it ever since it launched a browser and then and ISP/portal service. But all of it was really an effort to protect Windows from the erosion of what was clearly the disruptive technology that could kill off client/server computing.
Guess what? The strategy didn't work, except to give Microsoft a bunch of giant data centers from which it can launch Ray Ozzie's software-plus-services strategy.
If Microsoft can isolate the online part of its business from Windows, perhaps the Windows unit will be more free to do what all next-generation software makers should do, collaborate with other cloud computing vendors out there. Cloud computing, which is the SaaS version of the SOA model, needs to be free to draw its service components from any excellent source out there. Microsoft should be learning to ditch its king-of-the-hill mentality and embracing the "data portability" model of the new era. Separation of church (Windows/cloud apps) and state (online ad revenue) is a first step in the right direction.