April 18th, 2007
Debate over Microsoft break-up idea devolves
Oy vey. In the event that you missed my post yesterday (see Penfield-Jackson's Revenge? For Silverlight to succeed, must Microsoft break itself up), I contemplated the idea that, in its own best interests, it might be better for Microsoft to consider breaking itself up (perhaps into an online company and a software company) than to stay together. Judging by the feedback to that post (see the growing list of comments), it appears as though my ramblings were misconstrued as a statement to be distrustful of Microsoft. Many of the comments took issue with the historical examples I made.
Although I rehashed some history that I believe to be relevant to the question — namely, the way in which Microsoft licensed one DRM platform (PlaysForSure) only to later launch another (Zune) that competed with licensees of the first — my point was not to say that history will repeat itself and that technologists should consider Silverlight at their own potential peril. Rather, my point was that for all the great features that Silverlight has to offer (and Web is currently not wanting for a discussion of Silverlight's advantages or disadvantages), that Microsoft's varied interests in both the software and online portal markets could be a liability for the company.
The most talked about features of Silverlight are the ones that will appeal to companies small and large that are interested in building multimedia-driven RIAs or rich internet applications. For any technology company, nothing speaks volumes for a platform or helps to set its technology as a de facto standard as much as adoption by developers with the biggest reach. The problem for Microsoft is that if it looks at the developers with the biggest reach — the ones in a position to make Silverlight a big success — virtually all of them also view Microsoft's online division as a primary competitor.
Though not because of any opinion I share here (I don't profess to have that sort of influence), those companies will naturally question whether it makes sense to acquire their technology from a competitor versus acquiring their technology from a company like Adobe that's not nearly as threatening. Is it good to fund a competitor? Could the competitor withdraw certain strategic features if those features don't align well with other parts of the business? The question isn't whether the risk of Microsoft doing these things is real or perceived (the focus of many of the comments). Be it over its PlaysForSure ecosystem, OS/2, or other technologies, Microsoft isn't alone in the way it has made tough decisions. Every tech company changes gears and must occasionally make a hard call that negatively impacts its customers but that is ultimately better for its business. The bigger question for CTOs, CFOs, and IT analysts is and always has had to do with what strategies, platforms, partners, and suppliers involve less risk? "Information technology" is and always has been a code word for risk management.
Microsoft may very well stick to Silverlight road map that is and always will be void of concerns and issues regarding the company's Web properties, and vice versa. The point isn't (nor was it) in my last post to pass judgment. The point was whether or not Microsoft and new offerings like Silverlight are best served by Microsoft's current organizational structure. If for example, the fact that Microsoft is a competitor to certain big-reach developers is something that those developers are taking into consideration in the process of making strategic platform decisions, Microsoft has a problem.
Let's pose this question another way. How is Microsoft (and its stockholders) not better served by separate operating companies? For example, as a part of the larger Microsoft, will MSN be required to use Silverlight instead of Adobe's Apollo even when using Apollo makes more sense? If not, will it require a prolonged discussion that threatens MSN's agility? For all the work that Microsoft has put into Silverlight, is Microsoft's involvement with MSN a liability against the platform's adoption because of how MSN is viewed as competition? These are not questions about whether Microsoft can be trusted or not. These are questions about whether Microsoft is giving itself the best shot it deserves.
