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Monday, November 25, 2013

Microsoft’s New CEO Must See the Future Before the Competition Sees It 11-26

Microsoft’s New CEO Must See the Future Before the Competition Sees Iti

Since its founding, Microsoft has had only two CEOs: Bill Gates and Steve Ballmer. Having only two CEOs for that long a time worked quite well, and now Gates is trying to find a new leader to take the helm who can grow the company and have a long tenure. This is not the best approach, because finding someone who will stay for a long time is much easier than finding someone who will have the vision to lead the company through a product transformation that will yield a new growth curve.
Over the past few decades, technological change certainly seemed fast, but compared to the past few years it was actually quite slow. For those that are old enough to remember, at one time our primary computer was the mainframe. It took quite a bit of time for the desktop to become our primary personal computer, and Microsoft played a key role in making the platform shift that would drive the PC revolution.
Years passed before we all experienced another platform shift that would make our PC experience mobile: the laptop. With that shift, the operating system did not need to change—it worked in the same way as a desktop. Even the user experience was similar; the main differences were a smaller screen, slower processing speed, and less storage space. Since the operating system and the general software remained the same between the two platforms, people were basically doing the same things, just on a mobile device. The change was minimal for the software makers (like Microsoft) as well as the user.
Today, however, the change is very different. In the past few years we have experienced two major revolutions occurring at the same time, faster than ever before. They are 1) a hardware revolution, and 2) a software revolution.
No longer is our primary computer a desktop or even a laptop; it’s now a smart phone. The reason this platform shift is so disruptive is that it has combined your personal mobile phone and your computer, not to mention your camera and many other things, into a device you carry with you at all times. And thanks to the cloud, virtualization, and hi-speed wireless bandwidth, our smart phones can tap into supercomputers in the cloud and store almost infinite amounts of data.
This major hardware revolution happened extremely fast—faster than any other platform shift in history—and it was accompanied by a software revolution as well. By that, I’m talking about apps for mobile devices.
An app for a mobile device is very different than buying a packaged office suite from a large software manufacturer, like Microsoft. The apps are either free or low fee, they can bring enterprise-level functions on a phone thanks to software-as-a-service (SaaS), and they can be installed by anyone easily (and deleted just as fast). In addition, apps allow us to personalize the computing experience in a way we couldn’t do before.
For example, if I have an iPhone 5S and you have an iPhone 5S, and if we both use AT&T as our provider, I would bet you $1,000 that my iPhone is vastly different from yours. How can that be? Because I have apps that I’ve selected just for me, just as you have apps you've selected just for you.
In other words, it’s not just an iPhone; it’s a myPhone. And the same thing is true for the Google Android phones, Microsoft phones, and every other smartphone. Today’s software allows us to personalize our computing device, and that’s a huge shift. Those two rapid revolutions and the major platform shift have been making it difficult for the leaders of the old platform to catch up.
Remember, too, that the first quarter of 2013 was the first time since PCs were invented that sales declined. The same thing happened in the second and third quarters. When we get the fourth quarter earnings, I’m sure we’ll see similar results. So this is not a cyclical change. It’s what I call a linear change: a one-way change that is transforming how we live, work, and play. We will still have laptops and desktops for that matter, but we are using them less every day.
That means the game has been changed on Microsoft and all of the other industry leaders. Because of the speed of the revolutions, the expertise and the core competencies of Microsoft are geared more for where we’ve been than for where we’re going. With that said, though, it’s important to note that Microsoft has great people — great thinkers — and they can definitely move forward in an industry-leading way. The key is that they need to shift their focus to using what I call the hard trends — the trends that will happen — to jump far ahead of the competition.
Of course, it’s hard to jump ahead when you have a lot of legacy systems and clients who are spending large amounts of money to support those systems. As a result, as you try to jump ahead, you often get slowed down, especially if you’re a large organization like Microsoft, as well as many of Microsoft’s large customers. Your resources are typically put toward supporting, maintaining, and innovating around the existing systems rather than putting all-out effort into the new platform, which, by the way, is where the new platform leaders are going.
Knowing all this, is it time for new leadership at Microsoft? Even though both Gates and Ballmer have done amazing things that involved a lot of planned disrupting and innovation over a long period, the answer is yes. Will the new CEO stay as long as Gates or Ballmer did? I don’t think this is an important question given everything I have been talking about. Change today is not enough; we now need transformation. Think of it this way: Blackberry changed how we use our cell phones; Apple transformed it.
Based on the hard trends in play today, over the next five years we will see a transformation in how we sell, market, communicate, collaborate, innovate, train, and educate. And much of that transformation comes from mobility, apps, the cloud, and all the new and rapid software innovations coming at us. Think of it as a mobile, social, virtual, and visual transformation. And because the speed of change will only increase, we’ll need transformational thinking, a commitment to use hard trends, the ability to see the direction the future is heading in, and to be the disruptor not the disrupted.
So, is the future bright for Microsoft? I believe it can be... if they choose well and find people who can help to not just change Microsoft, but to transform it from the inside out.