How Steve Jobs Would Save Microsoft from Itself

I'm not one to do a fake Steve Jobs article, but I was pulled into this concept because of recent articles contemplating what if Steve Jobs ran ford or what if Steve Jobs ran Microsoft. Everyone wants to tie him to one of these struggling companies to see if his magic would work again.

The problem is, Steve Jobs didn't rely on magic. He did three things: cut back product lines (even for popular or slightly profitable products), reduced expenses (moving most manufacturing operations outside), and found innovation in otherwise normal products (just about everything Apple does).

Could Microsoft be made to go through these same retooling steps?

Yes, but the level of complaints would be huge.

Microsoft's two big cash cows are Windows and Office. Everything else is unimportant if these two aren't doing well. Microsoft would have to tune up these two while taking the axe to many other areas.

Cutting Back Successful Products

Microsoft is at heart a software company, but it has always dabbled in selling hardware - mice and keyboards and such. Microsoft figures that every computer needs a mouse, so just as every computer should come with Windows, selling mice is a sure thing.

While this makes sense, selling computer game consoles is stupid. In no way does the Xbox 360 game console help sell more copies of Windows or Office. If you think Apple fans were vocal when Jobs killed the Newton, that would be nothing compared to killing the Xbox.

The Xbox has to be sold at a loss in order to compete with Sony Playstation 3. Then Microsoft makes up the difference by selling games. The problem is that video games are expensive to produce and have a limited selling window before they are out of date. This makes it a high risk market for relatively low returns when compared to other software Microsoft sells (adding profits of a few million versus the billions in revenue from Windows and Office).

Except for satisfying some executive's ego, the Xbox is a dumb idea. It should be cancelled or sold off. It is far better for Microsoft and the computer industry to have video games dependent on the PC than for Microsoft to compete with Sony in the console market.

Adding Innovation to the Mundane

The next dubious project is Internet Explorer. This has to be kept, even if it is a money pit.

Microsoft needs to realize that meeting standards is a nice thing, but it's not overly important. The secret of Internet Explorer is to load it with convenient technology that developers can access to deliver a better experience. This means banks, retailers, and bloggers all get benefits only through Microsoft for the first one-to-two years. Slowly release these technologies as new standards after they do their job of connecting these markets to your software.

And make sure you release an on par version for Macs. You don't want 10% of the market left hanging to cause trouble.

Reduce Expenses

Kill off a lot of in-house development and spend more time watching for technology to buy. Microsoft is a big company, and many of its good ideas are wasted because of the bureaucracy required to implement new ideas. Better to let someone else do the heavy lifting and then take it over for ongoing innovation and integration. The billions saved on money currently wasted in-house could go a long way in buying the innovation needed to stay fresh.

Another good source for this is open source software. Take the parts not attached to Windows or Office and tie them in with a software bridge to enhance their product while adding value to your own. The best part is you sound like a good responsible company when you do this right, and it costs much less than developing it in house. (That is a classic win-win. Apple used it with the Mac OS X and BSD, the Safari browser and Webkit, etc.) Look especially for open source that has the least restrictive license to deal with.

Making the Customer Happy

Having a monopoly has blinded Microsoft to the job of making the customer happy. Microsoft worries first about coming up with some restrictive software protection scheme - and later about whether the customer will be happy using it. This includes corporate customers, hardware vendors, and home users. All of these groups have major complaints with Microsoft.

Microsoft makes most of its Windows revenue from the initial sale with hardware through Dell, HP, and others. The remaining upgrade sales are gravy. These sales should be about increasing the adoption of Windows. Let piracy do the work of adoption for you. It is no worse than selling stripped down versions in Asia for $5 that no one wants - they will just pirate a full copy anyway.

Stop making your customers angry when there are competitors out there waiting for you to screw up. Apple's Get a Mac campaign has worked well because Microsoft screwed up so completely that the average viewer gets all the jokes. Sure, it may be exaggeration, but the seed of truth is there. Fix it, or else the joke isn't going away.

What are the Chances?

Do I think that Microsoft is listening? No, there are a few at Microsoft who sound like they know what they are doing, but Steve Ballmer is not the man to oversee this kind of change. That's why Apple is going to continue gaining market share.

Steve Jobs isn't running Microsoft, and that's why I keep buying Macs.