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An open letter to Steve Balmer

Dear Steve

Wake up Redmond - The future growth is in mobile, and you are about to miss the party!

Already, 20% of all internet traffic is for mobile, and this percentage is growing fast.

According to Google research, in 2012, over a billion people will use a mobile device as their primary internet access point. It’s not hard to imagine a time in the future when a mobile device will be the only computing device the majority of people use.

Don’t get me wrong, you knocked Bill’s original goal of “A computer on every desk” out of the park! Awesome job, but that target is a couple of decades old!

Think about it. Every desktop that needs a PC already has a PC. There’s no large growth left in that segment.

There are, however, plenty of people who need a smartphone who don’t yet have one, and plenty more who want a tablet. Wake up Redmond, you’re missing the party. At best your sales, to date, in these segments can be described as “noise”. As the emphasis shifts away from the desktop you’re shifting from dominance to insignificance. It will happen gradually, then suddenly.

Consumers love the new format devices. If you need proof, ask any tablet owner that converted from a laptop if they’d ever go back. Everyone who gets an iPad loves to show-off and evangelize about it. When was the last time you saw anyone do this with their new laptop? This new mobile technology is exciting (and enabling).

Ask any smartphone owner if they’d rather go back to having a simple feature phone instead. Once a consumer accesses the internet from their phone, and appreciates the utility it provides, the genie is out of the bottle; they never go back. For many, that old PC in the Kitchen doesn’t get love anymore. It’s soon going to be gathering dust. That’s an awful lot of lost Windows licenses.

I don’t mean to bash. I want you to fix this! (I worked at Microsoft for over a dozen years and am long and deep into your stock; my future retirement plans pivot on how your stock performs!) However, at every turn you appear to be focusing on the wrong things.

Even in your established markets, competition, principally from Apple, is eroding your market share. Why? It’s all about friction and pain. Let me tell you a story: I’m currently on my second Android phone. The upgrade experience between my first and second phone was as painless as is possible to imagine. I went into the Verizon store, bought the new device, entered my account name, and automatically my new phone configured itself: My contacts, calendar, applications, data, even the WiFi hotspots I visit with their saved passwords were transferred. Done! It was so easy, it was seamless. I walked in, and walked out upgraded.

Why am I mentioning this? Well because, even after twenty years, the Windows upgrade experience is a nightmare. I currently have a Windows laptop (It’s a Lenovo x201 if you care). I love my laptop; it’s awesome. But, I am dreading the day I have to replace it. Upgrading to a new laptop is a royal pain. I have re-install this, configure that, re-install Office, configure this, realize I’ve forgotten to install some program or utility (usually at an inconvenient time)… It’s a month long rolling trauma to get back to full productivity. It should not be that painful!

Why is this important? Because people have choices. At any fork in the road there is an option to change. Unlike many of my colleagues, I’ve resisted the temptation to churn to an Apple laptop. Why? Because it would be a pain to learn a new system. However, it’s rapidly approaching the point that, because the Windows upgrade experience is so poor, switching directions to an Apple laptop might be less painful. You are giving me all the ammunition I need to jump ship. When my current laptop dies, the path I take will be the easiest path.

(I’ll let you into a secret; if you made the upgrade experience so painless that I could get a brand new device, log into it and have everything switched over in minutes, I might keep buying a shiny new laptop every six months, and pass the, still useful, device to another family member, keeping the concentration of Windows devices high. As it stands, I’m going to hold onto my current device until the bitter end).

There’s another junction in the road looming ahead. Yes, it’s Windows 8. This is going to be a huge change. If it doesn’t rock the World, you’ll be providing another instant catalyst for tens of millions of people to jump ship. If they’re going to have to learn something radically new, this is the perfect opportunity for them to change. The non-Windows path already has an operating system more in common with their favorite tablet device – that might be the path of least pain. Please don't orphan an entire group of people (did you not learn a lesson, alebit on a smaller scale, from VB6?), and if there is no seamless upgrade path, you are toast.

As the World moves mobile, one of your other bastions of profit, Office, also falls into Jeopardy. Consumers have been groomed on a app society where items cost pennies or dollars, not hundreds of dollars. A full retail license for Office would more than double the price of most mobile devices. (You don’t buy a car then expect to pay more than the same price again to fill it with gas). We’re in the sunset of these high revenue days. Cheaper alternatives for these products will materialize and be of sufficient functionality for the majority of consumers.

There’s no such thing as a disconnected device in today’s society. At worst, devices are temporarily away from the cloud and sync back up again later. You can’t compete in this arena with hardware and OS alone. It’s the entire ecosystem you need to duplicate. It’s also not just Apple and Google you’re behind to; there’s an upstart book seller in your backyard that has a pretty comprehensive ecosystem already established.

Soon the only computing device the majority of the World will own will be a mobile device connected to cloud infrastructure. This is an arena where you are currently an “Also-ran”

Even when Surface finally materializes, even if the hardware is superior to all other available devices, it’s going to be irrelevant without a seamless platform, unparalleled services, and oceans of content behind it. Dominance in the next decade will go to the company with that has the most comprehensive infrastructure, ecosystem, service and content behind that scenes.

On the websites I’m responsible for, I’ve seen the market share of Internet Explorer fall from over 90% to less than 5% in just a couple of years. I don’t see why the European Union continues to bother you! (Other than to get money) You’ve long passed being relevant in the browser market. For the sake of my retirement, please try to stop the rest of the company suffering the same fate.

Wake up Redmond; you are just a few years away from being the next Kodak.


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