Can Microsoft Grow Up?

By Peter Galli  |  Posted 2004-04-12

Can Microsoft Grow Up?

SEATTLE—Microsoft Corp. is growing up. At least thats what CEO Steve Ballmer wants current and potential customers to know. After years of serving the enterprise, Microsoft is now hoping to play a new role—as a trusted and responsible partner to the IT industry.

"Somebody asked me the other day what phase of life we were now at—old and stodgy?" the 48-year-old Ballmer told eWEEK editors in an interview here last week. "And I said no. We have come out of our adolescence and are now in our adult prime. We have come out of that jerky, adolescent, awkward phase. Thats kind of how I might characterize where I feel like we are trying to be now relative to our customers."

Ballmer said the companys almost-$2-billion settlement and interoperability strategy with Sun Microsystems Inc. were some of the first steps the company needed to take in its new journey. The challenge it faces now, according to some big customers and industry observers, is articulating the message and then convincing customers of its sincerity.

"Some of their business practices will never change, unless they are forced to do so legally," said David Robert, systems manager for a global consulting and engineering company in Cambridge, Mass. "They seem to always feel they are in the right, no matter what they are doing."

Jack Beckman, an application programming manager in Southfield, Mich., agreed. "Sure they can change, but only if they think that it is in their best interests," Beckman said.

Microsofts repositioning effort has two fundamental components to it. The first is the need to resolve and/or settle as many outstanding legal issues as possible to free the company to carry out its vision. This strategy was behind the companys surprise settlement announcement April 2 with archrival Sun, of Santa Clara, Calif.

"But why do that? Only to have a framework to go forward," Ballmer said.

The other repositioning priority centers on the security of the companys products, an area that has been under enormous scrutiny inside and outside Microsoft. The company has made security such a priority over the past year that resources have been moved to the issue and away from some new-product development.

"We have, in some senses, taken a hit in Longhorn [the next version of Windows, due in late 2006 at the earliest], a hit in features rather than a hit in schedule," Ballmer said. "I want to try to have some schedule discussions in order to make sure we absolutely prioritize the work we needed to do in security, because thats the thing we need to do."

Ballmer added that the current environment is different from other critical junctures in Microsofts past, such as during the browser wars. At that time, in the mid-1990s, the focus was on developing the next feature, not about whether it was secure enough. "Thats not the environment in which we live today," he said.

Next Page: Security is Worry Number One

Security is Worry Number


While some enterprise customers look forward to a new Microsoft, one that is a trusted and responsible partner, they remain concerned about security.

"Microsoft is trying to be the biggest and the best, but they are having trouble with the quality part," said Paul Tinnirello, a CIO for an insurance information company. "There are too many security flaws and wacky software errors for a company thats been doing this for more than two decades. Theres no excuse. Eventually, the quality issue may cost them the big game."

Microsoft also faces a number of challenges as it tries to convince enterprise customers that it has grown up and is ready to be a true enterprise player—and considered a partner. Ed Benincasa, a vice president of MIS at FN Manufacturing Inc., in Columbia, S.C., and an eWEEK Corporate Partner, said his company sees Microsoft products as PC- and low-end-server-based rather than as enterprise-class software.

"We do not have any confidence in the reliability of their product to use it for high-end processes such as our [enterprise resource planning] system," Benincasa said. "So, the reliability of their products is an important issue. Servers need to be bulletproof and run continuously. Security improvements and more effective patch management are also big issues for us."

Security is an issue with other operating systems as well, but because Microsoft products are more pervasive throughout the world, they need to be better than other operating systems to reduce the risk of network failures due to viruses and other vulnerabilities, Benincasa said.

A report released last summer by the Computer and Communications Industry Assoc. warned that the ubiquity of Windows and other Microsoft products has made the worlds computing infrastructure far more vulnerable to attacks and viruses than it would be were there more diversity of products. Click here to read more.

As much as Ballmer talks about the repositioning of the company as an adult and responsible corporate IT citizen, many questions and unknowns remain. Among them are whether the deal with Sun will have any impact on Microsofts expected appeal of the European Commissions antitrust judgment and on the outcome of that appeal.

Also as part of the settlement with Sun, Microsoft and Sun signed a broad Technology Communications Agreement as well as a Communications Protocol licensing agreement. But these appear to provide only a framework rather than specifics about how they will affect cooperation and interoperability between Suns and Microsofts products, as well as, ultimately, enterprise customers.

Still, Ballmer was upbeat about Microsofts chances of changing customer perspectives and the maturation process.

"A lot of what we have been doing is to try and put legal matters behind us and—as we try to respond on these security issues—is to reposition the company as that kind of trusted, responsible—I wont say mature—supplier to the industry," Ballmer said.

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