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More Ozzie, Less Ballmer – Please

Whether he’s damning Apple with faint praise, threatening open source, or denigrating former employees, I’ve long argued that Microsoft’s Steve Ballmer generally does more damage than good when he speaks in public. Nor am I alone in this opinion. Hell, even the market agrees.

The benefits of silence, apparently, are one of the few lessons that Microsoft is reluctant to learn from IBM.

As I’ve told many audiences in the past – and will be reiterating to the NXT audience in a few weeks, Microsoft is full of good people, and does employ people who understand open source. You just wouldn’t know it from the rhetoric. TechCrunch’s Duncan Riley says it well:

Microsoft is a company with a lot of good people doing amazing things, but those people are like a horse that has been handicapped out of the race with the baggage of Microsoft old. They are putting up a good fight to be seen and listened to, but it’s a hard ask.

Which is why today’s interview of Ray Ozzie by Om Malik is so refreshing: it’s lucid, forward looking, and utterly devoid of bombastic saber rattling.

For once.

Granted, it focuses on network services and cloud computing rather than the more contentious topic of open source, but there is no petty belittling of competitors, no desperate nods towards the current monopolies, no “Old arrogant Microsoft,” as Riley put it. Just a thoughtful, pragmatic discussion of the opportunities ahead for the largest software vendor on the planet.

More, I think Ozzie is fundamentally right in his basic assertions vis a vis the markets in question.

Regarding the changing role of the desktop, Ozzie said the following:

The real question is (that) if you were going to design an OS today, what would it look like? The OS that we’re using today is kind of in the model of a ’70s or ’80s vintage workstation. It was designed for a LAN, it’s got this great display, and a mouse, and all this stuff, but it’s not inherently designed for the Internet. The Internet is this resource in the back end that you can design things to take advantage of. You can use it to synchronize stuff, and communicate stuff amongst these devices at the edge.

Precisely so. Here’s something I said in conjunction with a discussion of the GNOME project’s concept of an “online desktop”:

My own laptop, shiny as it may be, is more or less a brick without connectivity. I could write, I suppose, but I don’t have access to my sources and I’d have to go back and insert links. Music’s an option, but I’d much rather listen to new stuff on WOXY than what I have. Even gamers are loathe to disconnect, with multi-player games the rule now rather than the exception.

It’s the network’s world, and we’re all living in it.

Or at least it should be. The operating systems most of us use today, however, haven’t quite adjusted to that reality – open source or proprietary. We still work in computing environments that the treat the network as an afterthought rather than application lifeblood.

While I doubt we’d agree on how to get from point A to point B, then, Ozzie and I are at least aligned on one point: that the desktop as it exists today is an artifact of a pre-internet era. An artifact that will be increasingly dependent on network applications hosted and run remotely.

When asked about his expectations for the delivery of mesh-oriented apps (roughly analagous to cloud deployments), Ozzie said:

I think that you’ll see is over the course of this year, to 18 months, you’ll see the incumbents and startups, both, do their first big volleys of services platform, apps tools, runtimes, various things. It really isn’t being taken seriously right now by anybody except Amazon. They’ve done the world a service by putting out there some fairly provocative, interesting services.

Frankly, I’m surprised this hasn’t happened already. When I gave my annual award for technical innovation to the Amazon Web Services team last year (this year’s is due this week), I speculated on the possibility of competitive services:

I don’t expect Amazon to be the sole occupant of this market indefinitely; one of eBay, Google, IBM, Microsoft/MSN, Yahoo could very well introduce a competitive product offering in ‘07, and Sun already has a more limited grid type offering available. Actually, I’d argue that more strongly: I think one or more of those players has to get into this market, or risk losing developers to competitors’ technologies.

That remains as true today, I think, as when it was written. And from his commentary, it would seem that Ozzie agrees, which is important because he – unlike me – has the ability to turn conviction into action. Which leads to the natural question: what do the economics of such businesses look like?

Whenever I speak with cloud computing players – potential or actual – the subject of profitability comes up, as in: (how) can this be a profitable business? IBM is a case in point here; while they’ve had cloud-like computing services for years via IBM Global Services, reports from other divisions and would-be customers indicate that it’s difficult to interest them in anything less than seven figure deals. That’s beginning to change with some of the hosted offerings from Lotus, but slowly. As far back as 2005, on the other hand, I was arguing that in the context of services, margin might have to be cut in favor of volume.

What does Ozzie think?

Well, it’s unlikely that we would get into [cloud computing] if we didn’t think it was going to be a profitable business. So we’ll just manage it to be profitable. It’s going to have different margins than classic software, or the ad (-supported) business. But, we have every reason to believe that it will be a profitable business. It’s an inevitable business. The higher levels in the app stack require that this infrastructure exists, and the margins are probably going to be higher in the stack than they are down at the bottom…

(Let’s) take (one company) who is in the market today: Amazon. They chose a price point. There are either customers at that price point or not. They may have priced themselves at expected costs as opposed to actual today costs, but it doesn’t really matter. They could have brought it out at twice the existing price and there still would have been a customer base, and they’d be making money at birth.

Again, while we might differ on the specifics, I think we’d see eye to eye on the big picture. Whether that bodes well for Microsoft, however, is a question left to the reader.

But irrespective of what you think of the substance – and certainly there are a great many questions about how Microsoft navigates the transition to the world Ozzie envisions – it seems inarguable to me that Ozzie’s style is better for Microsoft’s public image than Ballmer’s. So please, Microsoft: more Ozzie, less Ballmer.

Disclosure: Both IBM and Microsoft are RedMonk clients.

Categories: Cloud, Economics, Hardware-as-a-Service.

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