Four Ways To Improve Microsoft

There’s been plenty of speculation today about who Microsoft (MSFT) ought to buy now that its discussions with Yahoo (YHOO) have again come to a halt. I wrote a post earlier about the notion that they might buy AOL; but you can also imagine deals for Facebook, or Ask.com, or a zillion other Web properties.

In a research note today, Sid Parakh, an analyst at McAdams Wright Ragen in Seattle, came at the question of what Microsoft should do next with an entirely different approach. He addressed how Microsoft needs to change its whole approach to doing business.

Here’s his four-part plan for energizing the company:

• Innovate! “Multi-year investor concerns about the company’s ability to innovate have only increased in recent times,” he writes. “Outside of the “Surface” product, we have seen little from the company that could be labeled as being truly innovative. Innovation is key in boosting opportunities for Microsoft and in its battle against threats from Open Source software, SaaS, Online Advertising, Apple (AAPL), Google (GOOG), etc.”
• Stop taking the iterative approach to product development. He asserts that “the ‘Hey, that was only Version 1′ approach to building software and products is ancient and creates a flood of unwanted negative publicity – Zune 1.0, Vista/SP1 are just some examples.” Parakh says that a key here is “a flawless user experience the first time any product is launched.”
• They need a new branding strategy. “The use of Microsoft and Windows for corporate products is fine,” he writes. “However, anecdotal conversations with multiple individuals reveals that the use of Microsoft or Windows while branding consumer focused products increases the likelihood of a negative perception of the product (even if unwarranted), thanks to the immense negative publicity (news media, Mac/PC ads) received over the last several months and years.”
• 20% time? “Microsoft also needs to be nimbler in responding to the competitive environment and provide increased latitude for employees seeking to innovate.”

Comments

[Sanibel:]

To improve Microsoft, first, Ballmer must be fired. He represents many years of failure. Second, the operating system should be spun off as a separate company whose primary purpose is to integrate with and enhance other software applications regardless of manufacturer. The remaining company would be able to innovate without the restriction of having to comply with the existing Microsoft operating systems.

The worse thing that happened to Microsoft was appealing the Federal District Court's decision ordering Microsoft's dismantal.

2008 Jun 14 12:07 AM

[Urbane Gori...:]

Microsoft has never been innovative. They just take other ideas and package them as their own. They cannot seem to break this lazy pattern. They will always just be a product marketing company. But this is the American way! Ford and GM will always be behind Toyota and Honda, and American TV will continue to steal from British TV.

MicroSloth has to rethink its main product.

1) Drop prices
2) Streamline code for faster and smaller applications
3) Security ( How about being able to place your ROM on a CD drive, or lockable eprom to avoid underlying malicious code. )
4) How about a leaner, cleaner Outlook express with spam blocking abilities... What is so hard about replying to anyone 'not on a whitelist' and if the reply comes back as 'undeliverable' just deleting the original message and the reply ... Look Ma! Massive reduction is SPAM...

I could go on.. But MSFT is too busy trying to buy Yahoo to actually make their products work...

Thx jegan ;-)

2008 Jun 14 12:33 PM

[Swampthing:]

MSFT, QCOM, HP, AT&T, VERIZON, need to help bring about mobile barcode reading here in the United States that will counter Google's progress.

BUT, the Neoreader is a physical world navigation tool, NOT, just a barcode reader like Google's Android Scan.

Innovation can come from third parties, can it not?

Innovation at it's best, built off patents, a well developed product, that requires a $$$ strategy.

Make it work.

2008 Jun 14 10:42 PM

[bearfund:]

Some people want to break up Microsoft. I guess you could do that. I would make it much, much bigger. It belongs as part of a conglomerate that can invest the cash MSFT generates from its near zero-cost sales of crap operating systems that people buy because everyone else does. It is clear that the existing business will not grow organically nor through acquisition, so the remaining choices are to pay a huge dividend and stop pretending to be a growth company or to become part of a larger whole with the same basic purpose. The culture does not support innovation; never has, never will. And 20% time at MSFT is so absurd it's laughable. Don't even try. Appreciate the company for what it is, and find some good uses for its cash outside the computer software industry.

2008 Jun 14 11:14 PM