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Microsoft in desperate need of a new development model

Microsoft is currently its own worst enemy, in Innovator's Dilemma fashion. The company could use open source - not as a panacea, but rather as a way to channel more innovation into (and out of) the company.

Microsoft clearly has serious problems with its development and distribution methodologies. Problems that open source could help. Problems that far too many entrenched interests within the company would kill before they could be given a fair chance.

That's the lesson I take from yesterday's Wall Street Journal profile of Craig Mundie. The man puts in over 200,000 miles on planes every year, desperately trying to help the company become less like itself, and more like open source software communities. Mundie describes Microsoft and his job within it thus:

The bulk of the population [of Microsoft employees] comes to work every day and makes the trains run on time. You've got to have a small number of people who think it's their job to take risks....I view my job, in part, as making sure that the company supports the things that take time but end up being big.

Paraphrased, Mundie is saying that "Most of the company is invested in maintaining its heft, but I view my job as helping us to find brief flashes of innovation." OK, I'm exaggerating, but as you read the article you get the feeling that Microsoft is too big and too calcified for its own good.

In fact, the article points out that it seems to be only when the company lags behind more nimble rivals that it actually wakes up and does anything interesting. The rest of the time it's on Windows and Office monopoly-preservation autopilot.

Is this the kind of company from which you want to buy software?

Mr. Mundie says advances in technology that represent "fundamental change" or "whole new business opportunities" are "more disruptive, and so people aren't as focused on them" at Microsoft as they are on developing new features for existing products....

Microsoft's product groups - its cash cows - have long had enormous clout in its corporate culture. Star product-group managers, the company's so-called big shippers, get the big, profitable products like Windows out the door year after year. For them, meeting deadlines is all-important; longer-term thinking about technology isn't.

I dread the thought of deadlines, rather than technology, deciding the fate of Microsoft's customers. I dread even more the constant attempts to retrofit the future onto Microsoft's past. It may make money, but it doesn't make the future. Unless Microsoft can figure out the future, all it will have left is the hollow husk of maintenance revenues. (It's not pleasant to try to turn that kind of ship around. Just ask Novell.)

Open source offers one piece of the solution to Microsoft's struggle. Think about the kind of open-source community that Microsoft could shepherd. Think of all the people and hardware resources sitting fallow in its ecosystem that could help the company discover and implement "the new" and retrofit "the old" to new platforms and new opportunities. Mundie could spend half the time he currently does in the air, and instead spend more time online with the community outside Redmond's gates.

Open source is not a panacea for any company, much less Microsoft. But as Microsoft struggles to do anything innovative and market-leading beyond Windows and Office, it offers a credible path to customer-focused and customer-driven innovation.