Microsoft Deals With Organizational Stupidity: Page 2

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This was hardly a new problem for Microsoft. They didn’t see the Internet coming and initially thought their future was a lousy AOL copy; they focused on Netscape because, according to many, Netscape going to be the next Microsoft, and most recently focused on Google. And, as noted above, Google kicked their butt largely by ignoring Microsoft.

Here too the problem was one of focus, not one of needing to buy market share. You don’t take two companies – both of which are having problems – to catch a larger competitor, slamming them together under the least capable, without creating a larger set of execution problems. And, as noted above, the related organization was already simply too complex.

The best way to make this deal go through was to propose it as a reverse merger, much like HP recently did with EDS and Apple eventually did with NeXT. Yahoo was the larger entity and as bad of shape as they were in, they were still executing better than Microsoft in this space. Given the big hang-up was the executive’s jobs, this would have addressed that and likely resulted in a stronger Yahoo owned by Microsoft, rather than a more complex Microsoft.

In the old blended Windows/Internet group you couldn’t even structure that deal. But with this change you now have a defined organization that could be merged into Yahoo if Microsoft wanted to propose something that might actually work.

In addition, now their Internet efforts have a focus, and given that the threat to their current market dominance is likely to come from the Cloud, this new unit it better structured to mount a cloud solution of their own. Granted they’ll still have to execute, but they just lowered the degree of difficulty for that execution substantially.

This organization now also reports directly into Steve Ballmer (who may be starting to spread himself a bit thinly). Indicating he’ll be taking a much broader personal interest in their real, rather than imagined, competitive advancements.

Ballmer’s Approach

Steve has a history of remembering that successful units need to identify and focus on the customer more than the competitor and he knows Microsoft’s strengths as well as anyone in the firm. There is a good chance he’ll direct both groups to focus back on the customer (which is what Google generally does) and that he’ll have little sense of humor for any continued unmet promises or misdirection coming from either.

In short, these recent organizational changes indicate something that should have likely happened a few years back and were too long in coming. But now that they’ve happened, they provide a stronger basis for a better outlook for Microsoft, Windows Visa, and Microsoft’s On-Line efforts. This also points strongly to the fact that excess complexity and nonsensical organizational Mash Ups are bad ideas that need to be reversed as quickly as possible.

Correcting this one took too long but now that it’s happened you should see the benefits out of Microsoft in a few short months.

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Tags: Windows, Google, Cloud, Microsoft, Vista

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