A dinosaur is perhaps a strange way to describe a company that has just made over $3 billion in the past 3 months, but this is the very word used by Salesforce.com’s CEO Marc Benioff to describe Microsoft.
“This is a time of seismic shifts in our industry”. The internet is disintermediating the status quo,” says Benioff. “The era of the traditional software "load, update, and upgrade" business and technology model is over. It is time for "The Business Web."”
Benioff is, of course, referring to the growing move towards Web-based services that Bill Gate’s himself has identified as a growing threat to Microsoft’s business in a leaked memo (opens in new tab) to key employees. "It's clear that if we fail to do so, our business as we know it is at risk," said Ray Ozzie on the new services wave. "We must respond quickly and decisively."
Microsoft is clearly concerned and the purpose of Bill Gate’s warning, emphasising the threats the company faces, would seem to be designed to create a siege mentality that will galvanise his employees into action, similar to the rallying cry around Gate’s judiciously leaked Trustworthy Computing memo (opens in new tab) in 2002, when Microsoft was floundering under waves of security problems.
Although using the web as a distribution model is nothing new – remember the ASP model anyone – new Web technology standards such as Ajax are being exploited by a range of companies, from email start-up firm Zibra to the all-powerful Google, to deliver new and innovative software and services.
By using the Internet as a distribution channel, Microsoft’s control over dealers and resellers is bypassed and a whole new challenge is issued to the traditional concept of software licensing, placing traditional Microsoft cash cows, such as Office, in jeopardy
The Internet has the added advantage of allowing software updates and improvements to be delivered more frequently, so no more complaints like those from businesses on Microsoft’s software assurance program, when new software versions promised as part of the package are continually delayed.
Microsoft’s roll out of Windows Live and Office Live shows it recognises the threat but will it be able to change fast enough. Benioff is dismissive: "With 'Live' appended to some familiar names: Windows Live, Microsoft Office Live, Windows Live Messenger and so on, the clear implication is that their current product line should be renamed with similar zeal: Windows Dead, Microsoft Office Dead, and Windows Messenger Dead," he states.
A word of warning though for Microsoft’s critics. Microsoft has seen off many threats during its reign of the software world - just ask Netscape. This wily Tyrannosaurus rex of a company will still take some felling.