Burning Platforms and Sinking Ships
Why Microsoft should switch to Android
In 2011, Stephen Elop published a famous memo known as the “Burning Platform.” It recognized that, despite the enormous resources that Nokia had sunk into Symbian and MeeGo, that those platforms could not compete with the new smartphone app ecosystems. It was some much needed voice of reason, at a time when it felt like Nokia had its fingers in ears, screaming, “I can’t hear you!” It was something only an outsider could see, that it was time to put aside sunk costs, and move forward.
Of course, Elop’s next move was to move Nokia to Windows Phone, a platform with the barest threads of an ecosystem and yet to catch up with the market in feature-completeness. Elop and Ballmer heralded it as a perfect partnership of hardware and software, and Wall Street cooed at Nokia’s fresh cash injection. Everyone else in the world could see this was basically insane. But perhaps this is something only outsiders can see. In a mildly related note, around the same time, Blackberry announced its own operating system, BBX.
Fast forward two years, and we find that Nokia has sold the core of its business to Microsoft. I say core because, while they may have a great deal of technology left, it’s useless unless it can be brought to both scale and market. Speculation is that Nokia was either was threatening to move to Android or about to go bankrupt, both of which would have disastrous for Windows Phone. Either way, this is the end of the Nokia story.
Turning our attention to Microsoft, will its new position of owning both hardware and software allow it to capture the smartphone market? Most telling to me is that Microsoft’s plan is to triple their smartphone share in the next five years.This leads to the question: “Why bother?” Why not just adopt Android?
Smartphone margins are already collapsing today. Five years from now? Smartphone will be about as profitable as laptops, and just as interesting to boot. We’re already moving on, from smartphones to self-driving cars and wearable technology. Microsoft fighting a battle that no one cares about. Microsoft would do well to re-watch Steve Job’s historic setting-aside of a decade long feud with Microsoft.
http://www.youtube.com/watch?v=PEHNrqPkefI
Hard wired into Microsoft is the idea that owning the OS is the most important thing in the world. Yet, that was a coincidence of history. Owning hardware was important until Windows. Owning the OS was important until the browser, which serves as a common runtime across OSes. Owning the browser was important until web search. Owning search was important until the social graph.
The truth is that all of these areas are important to the product, but not always important to the consumer, and therefore, to a business. No one cares about file systems or network protocols. That’s why ZFS or SPDY aren't on the tip of every consumer’s tongue. Once upon a time, we did care about bytes and hertz and cores. Now? It’s whether it has Facebook, Google Maps, and Netflix. iOS vs Android is just a holdover from an era where you couldn't get an iPhone on Verizon and you couldn't get Netflix on Android.
Microsoft is too used to the monopoly position that Windows afforded. The days that it could destroy competitors by bundling or giving away its products are over. Everything is free, as in freedom and beer. Today, it is all about services and information. Microsoft needs to give up its antiquated obsession with OSes and focus on where value lies today: services. Microsoft is still much, much better than Google at building great end-user software. For proof of this, look no further than Excel. And unlike Windows Phone, Office’s dominance in business and the desktop can easily bleed over to mobile. File incompatibility is something people understand and begrudgingly accept, unlike email or the web, where the consumer expects those open standards to work everywhere. Have you ever tried to get a neophyte to use Google Docs? “Why can’t you just send a Word document?” they’ll whine. You are the intruder, the inconvenience, the crazed zealot imposing upon their tranquil workflow.
More than that, Microsoft could push to integrate SkyDrive and Exchange into every smartphone. And just like Google has used Play Service to exercise immense control over the Android platform, Microsoft could do the same. 15% market share could be reached within a year of release Office for Android and iOS (and not just iPhone).
To close, I want to share a made-up story about a fisherman with a boat, trying to row home with his catch. His boat was full of holes and constantly taking on water. Realizing that repairs, especially in the middle of the sea, would take him hours, he flagged down another boat and paid another fisherman with the shirt off his back to haul him back to shore. Having returned though, he sold his fish at the market and bought his shirt back, and had enough money to buy a new boat.
Microsoft, it’s time to abandon a sinking ship. Your business is in creating consumer value, not patching and pushing an unwanted platform. Just consider it a sunk cost and move forward.
