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Despite announcing strong revenues for the second fiscal quarter of 2010, Microsoft is “failing” due to an inability to innovate and a tendency to let infighting kill potential blockbuster projects, according to a former Microsoft executive who says he worked on projects such as a commercial tablet PC earlier in the decade.
“When we were building the tablet PC in 2001, the vice president in charge of Office at the time decided he didn’t like the concept,” Dick Brass, a Microsoft vice president from 1997 until 2004, wrote in a Feb. 4 opinion piece in The New York Times. “The tablet required a stylus, and he much preferred keyboards to pens and thought our efforts doomed.”
According to Brass’ narrative, which has been widely circulated online, the unnamed vice president refused to “modify the popular Office applications to work properly with the tablet. So if you wanted to enter a number into a spreadsheet or correct a word in an e-mail message, you had to write it in a special pop-up box, which then transferred the information to Office.” This process was clumsy, Brass said, and to this day, “You still can’t use Office directly on a tablet PC.”
The tablet group at Microsoft was eventually eliminated, despite what Brass termed the “certainty” that Apple was busy developing a tablet PC. But not all of Microsoft’s supposed issues over the past few years have been due to interdepartmental battles, according to Brass: “Part of the problem is a historic preference to develop (highly profitable) software without undertaking (highly risky) hardware.”
While that stance may have made sense in 1975, Brass added, it “now makes it far more difficult to create tightly integrated, beautifully designed products like an iPhone or Tivo.”
Microsoft attempted to put a positive spin on Brass’ comments. In a Feb. 4 post on the official Microsoft Blog, Frank Shaw, corporate vice president of corporate communications, responded: “Former Microsoft employee Dick Brass has an op-ed in the NYT arguing that our better days are behind us … and using examples from his tenure to make the point that the company can no longer compete or innovate. Obviously, we disagree.”
Shaw argued that what matters most for Microsoft is its ability to deliver technologies that have a “broad impact.” That paradigm depends more on market penetration than speed: “Now, you could argue that this should have happened faster. And sometimes it does. But for a company whose products touch vast numbers of people, what matters is innovation at scale, not just innovation at speed.”
Perhaps recognizing the potential of tablet PCs to alter the hardware landscape in the near future, particularly given the expected launch of Apple’s iPad, Microsoft pushed tablet PCs at January’s Consumer Electronics Show. During a Jan. 6 keynote address, Ballmer unveiled a tablet PC built by Hewlett-Packard, and other Microsoft OEMs used their space on the convention floor to show off tablet PCs or tablet-convertible laptops with multitouch screens.
Click here for a look at netbooks and tablets shown at CES.
“Almost as portable as a phone, but powerful as a PC running Windows 7,” Ballmer said as he held the HP tablet PC toward the audience. “The emerging category of PCs should take advantage of … touch and portability capabilities.” The device, which will be available at an unknown point in 2010, will be able to surf the Web and display e-books and multimedia content.
Brass Says Microsoft Dropped E-Reader Ball
Brass also cited Microsoft’s development of e-reader technology as an example of the company’s supposed failure to innovate and to control infighting.
“Early in my tenure,” Brass wrote, “our group of very clever graphics experts invented a way to display text on screen called ClearType. It worked by using color dots of liquid crystal displays to make type much more readable on the screen. Although we built it to help sell e-books, it gave Microsoft a huge potential advantage for every device with a screen. But it also annoyed other Microsoft groups that felt threatened by our success.”
Specifically, engineers and executives in other company divisions either “falsely claimed it made the display go haywire when certain colors were used” or that it “was fuzzy” and induced headaches, or else attempted to take over the project for themselves. “As a result,” Brass wrote, “even though it received much public praise, internal promotion and patents, a decade passed before a fully operational version of ClearType finally made it into Windows.”
For his part, Shaw argued that Microsoft eventually managed to integrate the technology into its products, even if other companies such as Amazon.com currently dominate the e-reader space. “To make his point, Dick generally focused on ClearType, noting that this technology was ‘stifled’ by existing business groups. … [However,] ClearType now ships with every copy of Windows we make, and is installed on around a billion PCs around the world. This is a great example of innovation with impact: innovation at scale.”
While Microsoft has partnered with Amazon.com and other companies to produce e-reader software for PCs, the company has expressed no interest in building a physical e-reader device that could compete against those made by Amazon.com, Sony and other companies.
In October 2009 comments delivered at Erasmus University in the Netherlands and reported by Reuters, Ballmer said, “We have a device for reading. It’s the most popular device in the world. It’s a PC … we are not interested in e-readers ourselves.”