Sometimes Steve Ballmer Just Takes Your Breath Away

In a USA Today interview Microsoft CEO Steve Ballmer is asked if he wishes consumers would get as passionate about Microsoft as they do when Apple comes out with something new. "It's sort of a funny question," he answers. "Would I trade 96 percent of the market for 4 percent of the market? I want to have products that appeal to everybody." Steve, I've got one word for you: iPod.

Ballmer was speaking, of course, about Microsoft Windows vs. Macintosh OS X. In music players the market is reversed. Microsoft's Zune clings to a miniscule share of the market while Apple's iPod crushes all competition.

Ballmer wants to see the "my-OS-on-everybody's-hardware" model play in the mobile phone space the way it has in the desktop-computer space. I am afraid, however, that's not a forward-looking idea, it's backward-looking wishful thinking.

Microsoft has done extremely well providing operating systems and application software for general-purpose devices. But it is my observation that application software is clearly going away. Software-as-a-service is the future. Microsoft actually understands this. This morning CTO Ray Ozzie rolled out Silverlight, which Microsoft hopes will compete with Adobe's Flash.

Ozzie talked about the pendulum that swings back and forth between the desktop and the network, between the stand-alone device and the "Universal Web," between applications and services.

And he talked about the complexities of developing rich applications that run on multiple platforms.

And he predicted a "sea change" at Microsoft that will refocus the company's efforts on providing services. To show he really meant it he announced that Microsoft services like Windows Live Spaces, Virtual Earth and Live Search will get APIs that will make them "composable and syndicateable." Silverlight is another one of these "foundational investments," he said. (And you thought Microsoft was just trying to compete with Google and Adobe at the same time.)

The news, of course, is that none of this is news. Software-as-a-service has been obvious for years, and Microsoft is playing catch-up from way back in the pack. The USA Today interviewer reminded Ballmer that Microsoft is still No. 3 in search behind Google and Yahoo, for example.

At the same time, while desktop PCs aren't exactly going away, they're being pushed to one side in the marketplace by other devices, and Ballmer can only dream about 96 percent of the market for cellphone operating systems. On the small percentage of phones that are "smartphones" -- that is, they run applications -- Microsoft's Windows Mobile runs a distant third behind Symbian and Linux world-wide, according to figures on Wikipedia. (The breakdown is given as Symbian OS 72.8 percent, Linux 16.7, Windows Mobile 5.6, RIM 2.8, and Palm OS 1.8.)

There's one other point to make here: the smartphone market has not been a consumer market. It's been driven by the enterprise.

http://www.informationweek.com/blog/main/archives/2007/04/sometimes_steve.html