A new broom to sweep Microsoft's cobwebs

While the influence and technical leadership of Bill Gates has undoubtedly been diminishing over the last few years as the company's portfolio of products and services has grown, one should not underestimate the importance of his general presence within the industry. Bill Gates is instantly recognised by the man in the street as the world's richest man and the brain behind Microsoft.

The value of this personal connection with the public is worth millions in marketing budgets. Apple has Steve Jobs and Microsoft has Bill Gates, and so losing this iconic figure could have a negative impact on Microsoft just as it did for Apple all those years ago when it lost Steve Jobs.

Microsoft is now geared-up to survive without its founder, and the appointment of Ray Ozzie is one that should instil confidence in shareholders and Microsoft employees.

Although he will continue on at Microsoft as chairman and part-time senior technical adviser, Bill Gate's departure clears the way for Ozzie to brush away the cobwebs at Microsoft in preparation for what many are calling Web 2.0.

Microsoft's senior management team know who the competition are primarily: IBM and Oracle in the enterprise; Google, Apple, Yahoo, Sony, eBay, etc. in the consumer.

Microsoft's greatest weakness is the desire to hook-up and cross-sell every product, service and offering that it has. This means that one late shipment could affect a whole bunch of others. The company's decision to push more of the software into the Web and services should, in theory, address this weakness.

Therefore, the appointment of Ray Ozzie as chief software architect comes as no surprise. Ozzie has been sitting centre-stage for quite some time at Microsoft — since he joined Microsoft last year after the acquisition of his company Groove Networks.

The number-one task for Microsoft's 'new broom' will be to neutralise the threat from Google, and to then regain control of the desktop and consumer market.

In an internal memo leaked earlier this year, Ozzie talked about "The Internet Services Disruption", and how Microsoft had to reinvent itself to compete with the Googles of this world. Now, some eight months on from that 5,000-word missive to Microsoft executives and senior managers, he has been handed the top job as chief software architect at the world's most powerful IT company.

Last summer, Microsoft CEO Steve Ballmer gathered the company's senior management team to discuss the 'Google problem'. For decades Microsoft has dominated the consumer and small and medium-sized enterprise (SME) market, but the likes of Google, Yahoo, eBay, and others, have brought with them a new take on IT; one to which Microsoft now has to play catch-up to. The outcome of this critical management meeting was to handover control of this next battleground to Microsoft's new brain – Ray Ozzie.

For many years Microsoft has been trying to command the same presence in the datacentre as it has done on the desktop, and in my view this has lead to the situation that the company now finds itself in: New operating systems and enterprise infrastructure products are months behind schedule; the hearts and minds of the techno-savvy consumer have been lost to competitors; and the company appears to have lost much of the agility it displayed back in 1995 when it went into battle against Netscape and Sun Microsystems.

While Microsoft is most definitely not a one-man show in terms of invention or vision, Bill Gates has always dominated the company's technical landscape. But Ray Ozzie's record in the IT industry demands unquestioning respect. As the father of Lotus Notes, and member of the team that brought one of the first spreadsheet programs to the PC, he will have no problem filling Gates' shoes from a technical perspective.

But his vision is to add a Web dimension to, or 'webify', everything Microsoft does, from the Xbox360 games console to the software products running on millions of PCs, will require nerves of steel and unwavering commitment from the Microsoft faithful if this plan is to have any chance of succeeding.

Microsoft's future looks set to revolve around future releases of Office, SharePoint, 'Live' services, and of course, Vista – the next release of its Windows operating system. However, Microsoft is not the only player in town. IBM is making steady progress with its Workplace strategy, and Apple has the imagination, the products, and the market attention to provide stiff competition to both. But the number-one task for Microsoft's 'new broom' will be to neutralise the threat from Google, and to then regain control of the desktop and consumer market.

*The author is senior research analyst, Butler Group, Europe's leading independent IT research and advisory organisation.