Microsoft Knows the Consumer is Always Right

By Steve Gillmor  |  Posted 2004-05-07

Microsoft Knows the Consumer is Always Right

The old saw is that Microsoft only gets things right on the second or third try. Only with Windows 3.0 did momentum begin to build for the transition from DOS to GUI. On the application side, remember Internet Explorer 1.0? I dont. It wasnt until IE 4 that I finally switched away from Netscape Navigator.

But the network has changed everything, including Microsofts product strategies. These days every Microsoft product has at least two lives—the one that points along the roadmap to overarching themes such as security and seamless computing (aka collaboration), and the one that positions the product in todays marketplace.

For years, Bill Gates has been both visionary and enforcer, explaining the road ahead while back-filling the reality behind. With Steve Ballmers ascendancy to CEO, Gates has been able to stay firmly embedded in the long view, while Ballmer juggles licensing models, lawsuits, and settlements to clear the path forward.

As the Sun/Microsoft deal suggests, Ballmer is having some significant success at solving seemingly intractable problems. But perhaps even more surprisingly, Gates is coming to grips with the need to ratchet down the volume on digital rights management. At the Windows Hardware Engineering Conference (WinHEC) 2004, Gates talked first about user experience requirements, and only then about content owner concerns.

"Will people think its advantageous to organize their music on many, many different devices?" Gates asked rhetorically. "Probably not. Probably theyll just want to do that on one device. And yet we dont want them restricted to that single device." Yes, Bill, you got that exactly right. I wouldnt mind having access to the directory from all my devices, but the content? Wherever I go, there the files are.

A bit later, he reverses the order but not the underlying message: "The Hollywood studios, as we move beyond DVD to that next level of resolution, theyre going to insist that theres a digital rights capability that allows them to protect their bits," Gates accurately predicted. "So standards like HDMI [High Definition Multimedia Interface] are coming into play, and making sure that those dont complicate the user scenarios so the user can move things between devices, understand the breadth of their rights and we keep it simple while making all of that content available."

Next page: Tackling the Home Center.

The Home Center

Notice how HDMI blankets the hardware providers, central to closing the digital loop on content control. Notice how Steve Kaneko from the Windows Hardware Innovation Team takes the handoff from Bill and carries it for another first down. First, the new Home Center: "Dual high-definition TV tuners, 802.11 access point, a broadband modem, and a Voice Over IP gateway, all brought together in a very simple Windows Media Center experience."

A quibble—theres no HD recorder here, but you know its coming. Now, lets grab the Tablet PC and head for the hole: "From here, because this tablet is constantly being wirelessly connected to the home center, I can actually watch TV here wirelessly, and use this essentially as a wireless TV in the bedroom, in the kitchen, anywhere else I want to watch TV where its in range," Kaneko pauses for breath, "and its using the second tuner on the home center, so that I could even go into the living room environment while someone is channel surfing, and watch the separate session going on here. The other advantage is obviously that I could be doing other activities, such as reading e-mail, browsing the Web, etcetera."

And now, the coup de grace: "So finally, with that same wireless connection, this Tablet could actually be taking downloaded, recorded content from the home center itself, and allow me to take my media outside the house, whether it be onto an airplane, maybe the back of the car, or even a soccer field, or whoever it may be, pretty neat."

Somehow Bill and company have crossed the bleak desert and arrived back at "neat." And "neat" is what it will take to drive this vision of seamless collaborative computing to ubiquity. Steve Jobs has resisted the personal digital device thats at the other end of this Microsoft rainbow, calling music (and his iPod) the killer app because its a background task. But those of us with kids know that Bills Portable Media Center will open wide and big—with the appropriate digital rights.

Appropriate means I get to move Dora the Explorer from the TV to the car, allowing my 3 year-old a chance at matriculating in the future. Appropriate means time-shifting All My Children to the car so my wife can listen to Kendall not trusting Ryan yet again for the millionth time while she drives our oldest home from school. Appropriate means I get to listen to my iPod tracks via some sort of DRM bridge yet to be announced.

Next page: An Apple a Day...

An Apple a Day

Its the use cases that will drive this digital transition, not the fear of loss of digital rights. Once the end user adopts the technology, the business case will follow. Thats always been Microsofts path to the enterprise, starting with Office 97s push past IT and emulated by AOL with its instant messaging client.

Ironically, Apples DRM strategy has paved the way for Microsofts success. By clarifying an acceptable fair use model, Jobs has brought the entertainment companies into the conversation and provided a roadmap for Microsoft to hew to: Satisfy the consumer, and then build an enterprise market across the federated devices.

Think Im wrong? Just listen to Jim Allchin, the power behind both Number Ones in Redmond: "And together were the ecosystem. Its not like another company whos manufacturing all the hardware and all the software, and they have time to just lock it in a proprietary way. They can make it very good. Thats not the best thing for the industry, but you can make a very good experience. We have to work together in order to make sure there are no gaps." Hes talking to hardware developers, sure. But Microsoft is also talking to customers these days, and as long as they do that first, theyll succeed—in the long run.

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