Thursday, October 28, 2010

Ray Ozzie's Parting Shot At Microsoft

I haven't yet written about Ray Ozzie's departure from Microsoft. Somehow, I missed the October 19 article in the Wall Street Journal. However, I think it's a watershed event for Microsoft, and not a good one.

The end of the piece states something I think needs to be clear upfront,

"Mr. Ozzie is a legendary technologist in the computer industry, whom Mr. Gates once called "one of the top five programmers in the universe." "

I can't recall all of Ozzie's successes, and don't feel like Googling his bio right now. Suffice to say, he's legendary, and for good reason. Thus, his role as Chief Software Architect should have made a huge difference, in a good way, for Microsoft. Instead, here are added passages from the Journal article,
"According to one person familiar with the situation, Mr. Ozzie decided to quit Microsoft because "he has accomplished what he wanted to accomplish" at the company. His major contribution to Microsoft was in helping it shift the company to focus on cloud computing, in which more computing chores move into data centers rather than being executed on PCs operated by users.

But several current and former Microsoft executives say Mr. Ozzie failed to exert the kind of leadership many of them hoped for after he took over the title of chief software architect from Mr. Gates in 2008. These people noted that Mr. Ozzie did far less public speaking and other similar high-profile duties than Mr. Gates did, especially in his latter years at the company. Those kind of public ambassadorial duties have long played an important role at influencing employees within Microsoft itself, these people said.

Mr. Ozzie also clashed with other executives at the company, particularly Steven Sinofsky, now the president of Microsoft's Windows division, these people added. Mr. Ozzie appeared to lose a key battle with Mr. Sinofsky two years ago when control of Live Mesh, a data synchronization technology developed by Mr. Ozzie's team, shifted to the Windows organization at the company.

About a year ago, oversight of another initiative Mr. Ozzie was involved in, its Windows Azure cloud computing technology, moved to the server and tools business run by the division's president, Bob Muglia.

Mr. Ballmer in his email said that the role of chief software architect was "unique" at Microsoft and he won't fill the position after Mr. Ozzie's departure. A Microsoft spokeswoman declined to make Mr. Ozzie available for an interview or comment beyond the email."

Given Microsoft's lost decade of total return performance, as contrasted with Ozzie's accomplishments, I think one would tend to discount Microsoft's version and give Ozzie the benefit of the doubt for what went wrong at Microsoft.

It sounds believable that the internal squabbles at the firm derailed much of what Ozzie had hoped to do. One can only guess at what was lost by giving Live Mesh and Azure to company functionaries. After all, you have to recall that the crew that Ozzie found at Microsoft when he arrived in 2005 is responsible for the firm's total return performance since then. The first nearby chart shows that, when compared to the S&P500 Index, the technology giant comes up, at  best, about the same.

The next chart shows the same two series for a much longer timeframe. In that chart, you can discern that Microsoft has actually lost value over the past decade. More so than the index.

So I wouldn't put a lot of blame for what didn't work on Ozzie. I suspect it's more like a software wizard being sucked into the large, slow-moving blob that has become Microsoft.

His warnings to the firm, as he left, sound on target to me. What I heard on CNBC the other day was that Ozzie predicted that millions of new future users will access the internet and software via cell phones and tablets, while Microsoft, clinging to PC and server operating systems, will lose out on controlling and profiting from that future growth.

Reviewing Ozzie's track record, versus Ballmer's, this isn't a very hard call to make in favor of the former.

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