In the long history of "you're out on your ass" press releases from major companies, Microsoft's (MSFT) announcement of the departure of Chief Software Architect Ray Ozzie is the strangest one I've ever seen.
But what it means for Microsoft investors is bad news.
As described on this blog post I wrote for Research 2.0 in February 2007 (and which appears on SeekingAlpha as an anonymous submission and also appears somewhere in the archives here on my own site)
"Basically, Microsoft has to decide whether it wants to be a utility, or just be the guy that makes the dynamos. Or the electric motors. Or the circuit breakers. It is important to remember that Ozzie's plans are still not necessarily Microsoft's plans. There is also a Ballmer plan and Bill Gates hasn't 'retired' yet. (Author's note: remember this was written in 2007)
"I think in deference to the others Ozzie uses the term "software and service" rather than software as a service, even though that (author's note: "that" refers to the words "software AND service") would be a step back to the 1990s. If Microsoft tries to straddle that fence (be both a service provider and a technology supplier), its investors will be the ones that feel the pain in the middle."
I've repeated all the illogic and investment problems behind the 'and" in the term software and services in multiple places since, usually right after the annual Microsoft financial analyst day each July. I wrote a note to myself to ask why Ozzie didn't speak this year but then went off on vacation myself and didn't follow up. Now we know the answer.
Microsoft never made the leap to software as services that it needed to make and Ozzie was trying to architect (which is what chief architects do after all). I fear Ozzie's departure to pursue other interests or retire or play video games or whatever Steve Ballmer is talking about in this weird announcement means Microsoft chose wrong.
This is the high-level departure that Larry Ellison should be commenting on. Please, Larry, send me an email about it rather than wasting one on the New York Times or Wall St. Journal.
-- Dennis Byron
(no financial interest in companies mentioned)
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