Strategy shift... or drift?

I just can't help wondering exactly how Microsoft decided that it's good strategy for a software company to get into hardware. Software is a different business than hardware. Microsoft used to be a company that insisted on doing software, that celebrated software, that focused on programmers and software users as its customers.

Xbox was born out of Microsoft's frustration with the existing console makers' inability to provide better platforms for software. Microsoft believed that it could make a better game machine -- better for programmers and better for game players. After two models of the Xbox have reached the market and the company has expended billions of dollars, the results are not conclusive: Microsoft certainly figured out that online play would be critical. But the fundamental playability of the Xbox isn't that distinct from the Playstation 3 (or even the Playstation Portable).

If Microsoft does plan to introduce a music playing device, what is it that the company brings to this party? Just being pissed off that Apple has a lock on the market? Or is it really about making a better platform for music consumers or programmers? The consistent report on Microsoft devices (ie smart phones) is that the user interface still carries a Windows mentality that requires more clicking and navigation than most consumers find comfortable. Can you believe, really believe, that Microsoft might actually make a more useable music player than Apple?

The question that keeps rolling around in my head is whether Microsoft is experiencing precisely the kind of strategy drift that IBM experienced in the early 1980s: Is it acting in the interests of its executives (drift) or the interest of its customers (shift)? Strategy drift kills companies, even ones that have a monopoly like business.

Comments

[Josh Morgan]

This looks like the same hole Google is going down. There have been a few articles over the last couple of weeks about the lack of traction for Google products beyond search.

With that being said, as much as I have given MSFT grief over the years, particularly in my time at Apple, they have to continue to search for the next cash cow.

It only takes one of the bets to pay off. Of course MSFT had two pay off, DOS/Windows & Office, that have served them well for 25 years.

[Josh Morgan]

PS - Here's the link to the article on Google I was referencing:

http://www.businessweek.com/magazine/content/06_28/b3992051.htm

[Stewart Alsop]

Thanks! I missed the BW article, which is thoughtful. But it is like writing about MSFT being unsuccessful with new products -- 20 years ago. The next 20 years will probably still treat GOOG pretty well, if they don't screw up search.

[Marc Miller]

The Post Office installed new POS software. The clerk says it takes 13 clicks to send a parcel post package (ie, more than before).

It was clear to the clerk and to me that goals assigned to the software guys did not include "customer friendly"; instead, they placed a higher priority on "data-gathering" and "selling-up".