The Microsoft albatross

Speaking in front of a group of financial analysts Thursday, Steve Ballmer, Chief Executive of Microsoft, explained that his company needs to stay focused on moving away from the desktop and focus on Web services and consumer devices. But what Ballmer did not come out and finally admit is the very products keeping Microsoft afloat are quickly becoming its albatross.

Windows and Office are the sole reasons why Microsoft has enjoyed such success over the past decade. Without Windows, the company could not have moved into all of the markets it currently maintains products in. Without Office, the company would never have been such a major player in the workplace.

While Microsoft understands that there is need for change, there doesn't seem to be any urgency on the part of the company to do so. Windows will not be around forever and as I've pointed out elsewhere, it won't last as the chosen "desktop" for the future--that belongs to the Internet. But right now Microsoft is in cruise control and the company is resting on its laurels.

As Ballmer pointed out, "Great things don't happen overnight. Most successes require long-term investment and innovation...and that's our perspective."

Sounds like a cop-out to me. Sure, great things don't happen overnight, but surely they happen within a year or so. Just look at YouTube, the Internet and even Windows. But Ballmer spoke to analysts with a pie-in-the-sky idea for 10 years down the road. In a decade, his company will be a shadow of itself if it doesn't change.

Microsoft needs to abandon Windows after creating one more operating system.

Windows, while still wildly popular and a reliable workhorse the majority of the time, is outdated and in definite need of overhauling. And while I compliment Microsoft on trying its best to change Windows with the release of Vista, it's too late. Almost everyone can see where the industry is headed and yet Ballmer and the rest of the Microsoft executives continue to harp on the next release of its albatross. Cruise control may have worked for the company for the past decade, but kicking it into high gear is its only salvation.

I often find it amusing when people believe that just because a company is big and powerful today, it will be so in 10 years. If the new CEO of Microsoft is speaking to analysts in ten years as the leader of the industry, the person will not be discussing a vision for Internet services in the future or the new GUI on Windows 2017, the CEO will be discussing the unique services Microsoft provides that don't revolve around the desktop.

And while I know Microsoft will never abandon its money-maker--the product that allows it to carry zero debt and maintain a stranglehold on an entire industry--it may not want to stay complacent forever. So instead of worrying about product development for the next 10 years, maybe the company should start coming up with ideas right now.

Here's a road map the company should follow for the next 10 years:

Release a new version of Windows by 2012. Sure, it may not be the best move, but in five years the company will still be the leader in the software business and it will need all of the revenue the product will generate. Even better, this release will buy it some time for its new vision.

Start releasing unique Web applications by 2010. It takes time to develop strong Web applications and Internet speeds aren't at a suitable level to make any kind of online Office program feasible. That said, Microsoft should shoot for an online Office by 2010. From there, the company can easily keep tabs on piracy and maintain significant control over its use.

Get out of the desktop software business by 2017. As if I haven't belabored the point enough, Microsoft is a victim of its own success. The writing is on the wall and desktop applications are on the way out. Microsoft needs to move to the Internet and find applications like an online Office or maybe even an online Windows that will allow it to maintain its stranglehold on the software business without sacrificing its main selling point.

Bill Gates didn't become one of the richest men in the world by creating a better version of a product that was in its maturing stage of development. Instead, he seized on the opportunity to create a product that the market demanded. Microsoft must do that again.

But if the company decides to abandon the road map its CEO laid out, it will surely meet an unhappy consumer base.