Microsoft Modus Operandi

David Pogue writes a weekly column in The New York Times called "Circuits".

http://us.f377.mail.yahoo.com/ym/ShowLetter?MsgId=1181_3391768_30009_1262_9836_0_17325_34161_3150109169&Idx=0&YY=4411&inc=100&order=down&sort=date&pos=0&view=a&head=b&box=Inbox

Because the above link may disappear, I have reprinted parts of the article.

While the subject matter isn't confined to Microsoft, the computer industry, or even technology, I thought it interesting, and wondered why it didn't occur to Pogue.

"The Human Side of a Microsoft Disaster

In last week's e-mail newsletter, I wrote about how, based on their personal blogs, Microsoft employees seemed to know ahead of time that the Ultra Mobile PC (UMPC) would be a disaster in its first incarnation. I wondered why nobody raised a hand to let their bosses know that they were headed for an iceberg......

Finally, though, there was a note from an ex-Microsoft employee. It sheds so much light onto Microsoft's master business plan, that I couldn't help reproducing most of it here:

"Dear David,

"The group you want to think about isn't an insular group of Microsoft employees--it's Microsoft and its OEMs [original equipment manufacturers, the companies that build the computers that Microsoft suggests]. The Microsoft people were probably more aware of the coming failures than the OEMs ever were.

"Microsoft relies on OEMs. And OEMs, in their slim-margin business, rely on a healthy volume of people upgrading or buying new hardware. The tablet PC, the UMPC and the ill-fated Mira (a portable display-only tablet), were joint efforts whereby Microsoft--in the interminable stretches between releases of Windows--attempts to advance the Windows platform AND keep its OEMs engaged, excited and healthy.

"Imagine being an OEM, like Dell, that ships Windows boxes. 'Windows Vista is delayed again for HOW long?', you might think. 'Maybe I should keep up with all this Linux excitement. And by the way, I better figure out how to keep Wall Street and my suppliers happy for another 6-month--12 month--(sigh)--delay.'

"So Microsoft approaches these OEMs with a prototype and says, 'Wouldn't it be great if the market could have something like THIS? In fact, we have a great piece of software for this. All you guys need to do is design one with your own logos and sell it. We'll promote it with you, partners.'

"Now, often, Microsoft really *has* thought the problem through. First, it has years of experience, and failures, to call upon. Second, reference [prototype] designs fill in most of the blanks for a manufacturer. The prototype has probably been usability tested at Microsoft, along with the software, in ways OEMs would and could never spend to do. And reference designs often also include market research that suggests things like a price.

"That's when reality kicks in. First, the manufacturers have to add their own touches, partly for differentiation and partly because they believe that THEY know their customers best. These touches add delays and cost to the effort. Second, politics often also come into play. When Microsoft sits down with a Dell, an HP or a Samsung, the business of ALL their business come into play--including the all-important Windows licenses--and support for or against something like the UMPC becomes a bargaining chip for both sides. 'You do this, and I'll stand up at your press event and also buy/invest in this standard or that standard,' etc.

"And so, a compromised design or an unnecessary feature gets added here and there, adding time/delay, adding cost...

"Finally, at the other end of all that, there's the issue of follow-through. A few months later than planned, and some factor more expensive than originally planned, the train is rolling. Microsoft puts its weight behind the concept and, correctly I think, keeps pushing for what it believes is truly a winner in version 2, version 3. If you read between the lines, you can tell where Microsoft thinks a product is in its 'maturity' based on which executive announces it, where, and when.

"It's like when a new Robin Williams movie comes out and he appears on the requisite TV circuit put together by the studio. Sometimes he spends his entire interview talking about his movie. Sometimes, even if he's done a great job himself, he spends his time talking about politics or feng shui. We all know what he thinks about the movie, based on the distance he keeps from it.

"I hope this helps you see how Microsoft and OEMs, all acting pretty rationally, sometimes have to take a longer route to get from point A (a good idea) to point B (a good execution). There are MANY potential pitfalls when one entity controls too much of a design, including cost, insular thinking and inevitable blind spots." "