Wednesday, June 22, 2005

Can Ballmer pull a Chirac?

Jacques Chirac pulled off a masterly coup de théâtre at the EU summit last week; he ambushed Tony Blair with demands about the British rebate, and succeeded in completely diverting attention from the No vote in the French referendum on the EU constitution.

Microsoft's CEO Steve Ballmer needs something similar. The stock has been in the doldrums for years [1], the company has resorted to shaming its customers to get them to upgrade to Office 2003 [2], and it's at the hairy edge of its ability to ship large code bases - take Longhorn, and the Visual Studio upgrade cycle.

Ballmer needs to divert attention from the company's core business until it's exciting to look at again. He needs to find a subject where Microsoft has credibility, one that works world-wide, and one that's close, but not too close, to the software business. It would also help if he can point to a bogeyman.

Two possibilities come to mind: broadband deployment, and education.

Broadband deployment is key to Microsoft's connected computing ambitions, but it's not something the company has a direct stake in. Ballmer could become a leader in driving Internet access world-wide: affordable high speed access in the US, and any access at all in developing countries. It's something everyone will stand behind. And he even has a bogeyman, at least in the US: the network operators whose customer base and offering lags well behind most other developed countries.

Bill Gates has been talking recently about problems with science and engineering education in the US [3]. Microsoft is making investments around the world in education through its Partners in Learning and Unlimited Potential programs. Competitiveness leads to jobs, and jobs lead to votes; every politician worries about employment. If Microsoft could engage here, it could look good everywhere. Of course, it's hard to find an enemy in this debate; perhaps the opponent is ignorance itself.


[1] The stock is down about 30% over the last five years, and trails the S&P (down 20%) and the Dow Jones (flat); see Yahoo Finance graph. Over the last year MSFT is down about 10%, and the two indices are (barely) positive.

[2] See the "Evolve" ad series: This is probably an effective campaign; see here for a positive review. There are of course criticisms, eg MiniMsft. Whether the ads work or not (and I haven't seen any data either way, nor would I expect it to ever be published), the fact is that Microsoft Office has gone very public that it's biggest competitor is old versions of its own products, and that it has (at best) not done a great job to date of persuading users to upgrade.

[3] For example, in a panel discussion on 27 April 2005, Gates said this: "Even above the research funding problems that are real, the visa problems that are real, this pipeline problem [of the interest level and the capabilities coming out of K-12] is the most damning, I'd say."