This week two giants spoke to the technology wave known as cloud computing. Larry Ellison called it a new label on what everyone is doing already. He acknowledged he was going along with it to keep his marketing and sales guys happy, but basically he called bullshit on it.
Steve Ballmer talked at a deep level about intelligent caching between the cloud and the client. Over an hour of snappy questions by Ann Winblad and Obamaesque nuance from the Microsoft leader let some significant cat out of the bag. No longer software plus services, the net of Ballmer’s signals was cloud + client. If you believe as Jason Calacanis does that we’re on the brink of a startup depression, the technology industry should be very very afraid.
Bill Gates has been thinking so far out ahead for so long that we’ve grown complacent in understanding how long it takes for Microsoft to reposition itself. Most observers still think the company is caught in an intractable wedge between the revenue of the Office group and the release cycles of Windows. The forthcoming Windows 7 announcements at the Professional Developers Conference just before Election Day in Los Angeles can already be understood as a point evolution, more like a service pack from the old Windows NT days when Redmond was trying to absorb consumer Windows into the IT server stream.
Back then, the twinkling in the eye of what became .Net was owned by the Exchange group, who by the accident of the competition with Lotus and Netscape in the Y2K messaging rollup was the owner of Outlook Web Access and a URL addressable hook into the file system. The server code that processed those requests was ASP.Net, and it was first released as a service pack upgrade to Internet Information Server. Within a year, Scott Guthrie had a Visual Studio plug-in that allowed rapid authoring of these applications, laying the groundwork for much of what Guthrie now owns as today’s service pack aka Silverlight and Mesh.
Service packs have always been where Microsoft performs its own jujitsu on itself. What they’re called is irrelevant; what they do is allow innovation and politically incorrect projects to get traction before the normally hyper-aggressive power brokers inside the company regain control and shut down the insurrection. By that time, the market has usually shown the new direction is strategic, and the changes are absorbed in a reorg. But the underlying reasons why these “skunkwork” projects break out are deeply understood by Gates, often years before they emerge in the dynamic of the time.
Steve Ballmer prides himself at underplaying his technical understanding, but he’s gotten away with it for years with Gates as Johnny to his Ed. Now, he has little cover, and at the Churchill Club on Thursday he didn’t bother to hide his command of the details: Virtualization, where he identified the classic Microsoft strategy of moving in and commoditizing the space from 5% to 80% market share. The balanced model of computation, from smart set top boxes to smart apps painted to dumb clients – Ballmer was not talking about plans but the tail end of execution.
Listen closely and he’s talking about applying the right amount of intelligence (software) at the right time. Gone is the software (read client) plus services (read cloud) mantra, discarded now as Windows is in the process of receding behind the user’s perception in favor of the applications that Gates says have always driven the success of the company. The service pack model for Windows 7 is being pushed to the cloud and virtualized, with updates streaming down to the user on demand rather than bundled on the dead DVD.
This is the SlingBox platform of application virtualization, and just because Google has pioneered it doesn’t mean Gates didn’t anticipate it years ago. Spray the bits onto a range of devices from phone to big screen, and neutralize the pain of migrating the hardware base with a Mesh/Silverlight OS that replaces Windows on the client with Windows in the cloud. Ellison is right – go along with the name change but stay ahead in the apps race by making the decision about where the code resides purely a function of caching and predictive push.
It’s like the Obama/McCain debate. Watch it live and McCain won. Watch the moments as sequences, ranked and streamed according to the logic of each section, and Obama won. Listen again to Ballmer and you hear a tough competitor, cagey and jovial, more relaxed than I’ve seen him in years. It’s the calm of the lion, relaxing in the shade and watching the world, his world, lining up.
Economy downturn offers small companies an advantage and technology downturn does it as well. Troubled water isn’t always source of trouble. There’re always guys who are going to catch some fish in there. And some of them will do. It’s actually not so interesting to watch what MS will do, but to look at the smaller guys.
This is the most intelligent, well thought out, and “edgy” post I have read during the last 6 months on TC. I am not a huge fan of MS, but it is refreshing to hear someone recognize that they are a powerhouse to compete with the likes of Google in delivery and innovation. Great article.
I watched the debate live and I thought it was a draw. You can put your own spin on technology, but suggest you leave politics out of it. It takes away from your argument.
From what I saw McCain did have some good points but radiated negativity. Whereas Obama radiated positivity Obama had 30 good insights for every one good point from his opponent. Obama just looked and acted professional, cool and presidential. McCains did the usual mud slinging and it did nothing but make Obama look mature. McCain hemmed and hawed on questions and Obama hit them square out of the park.
I would say no contest.
The same could be said for Google/Microsoft. When Microsoft/Ballmer stop with the negativity and focus on creativity. Stop with the idea of destroying MS’s enemies which is such an old paradigm. George Bush is stuck there. War on drugs, war on terror, always out to get the evil doers. Leading by creating fear. If Bush had put the 2 trillion dollar surplus left by Clinton into developing technologies and inspiring people like Google is doing the US and the world would not be in the financial meltdown you see today. A different tack is needed by nations and companies.
I would like to see Microsoft change in one simple way. They want to take business from other companies. MS should start by adopting Google’s strategy of being and doing as much good as possible.
Relationships are based on giving (not taking). MS is not evil but it would be great if they could focus more on giving, being constructive and creative like Google does.
Life is short why not focus on creating a better world.
I love this line, ‘It’s the calm of the lion, relaxing in the shade and watching the world, his world, lining up.’ – awesome.
yes, what is with that line
Good explanation of your previous posts on mesh. I agree that MS are really onto something here, and having your context follow you across platforms opens vast areas for new stuff.
Anyone who the support of a $9B R&D department should appear to be a near genius, and I find our crediting Bill Gates alone not credible. This is not sour grapes, MS have many brilliant people working there and they have created a structure that enables their ideas to become reality – full credit to them. I just do not see one person conceiving and planning something like mesh and all the various pieces that are still coming together.
If you are interested in knowing what does Oracle’s partnership with Amazon mean to enterprise computing ? Check out the article that I wrote here: http://tinyurl.com/3k3uwh
Thanks,
Anand
http://www.byteonic.com
If Bill Gates and Steve Ballmer are so smart and such deep thinkers, why has their stock price been stuck at $25 for five years – despite spending billons on stock buybacks?
Steve, I have not been able to understood your points in previous articles. I enjoyed this article. I hope the clarification of your writing continues.
“What a Joke”: from my view, the market has been (accurately) reducing growth expectations. I have never owned Microsoft stock before, but recently purchased some.
In a nutshell, MS lost the SaS battle (or just consider it not worth to win) and wants to start a new one, on a new field.