Microsoft Missing the Boat on Mobile?

Yesterday’s Microsoft Watch had an incisive article about Microsoft’s failure to compete in the mobile phone marketplace. Echoing my own assertions that Microsoft’s obsessive focus on competition with Google in search is a massive distraction, while open mobile is Google’s most strategic initiative, Joe Wilcox notes:

Microsoft must change its priorities. The company has wasted too much time chasing Google in search. The search wars are over, and Google won. Microsoft must accept this. Where Microsoft should have been pushing hard is the device category where search will be the killer application: the cell phone.

Instead, Windows Mobile has fallen way behind competing products. Windows Mobile is a mess. The user interface is too complicated, and there are few—I say no—capabilities that distinguish it from other mobile operating systems….

It’s time for Microsoft to launch a mobile Manhattan Project, something on the scale of Internet Explorer in 1996. If Microsoft cedes the mobile market to Apple and Google, the PC will be the software giant’s final—and declining—legacy…

The mobile market has dramatically changed over the last 12-15 months. But Windows Mobile hasn’t moved with it. Apple’s iPhone is exciting and has raised end user expectations about mobile user interfaces. Apple’s iPhone platform has huge potential to woo developers, too, mainly because of the App store.

Now along comes Google, carrying two nuclear missiles: Android and Chrome. Both are immediate problems for Microsoft. Let me be absolutely clear: Chrome is not a Web browser, it’s an application runtime. Chrome is really Google Gears with a browser facade. Sure, Chrome is based on Webkit and has browser legacy, but the product’s core capabilities—and Google’s objectives for them—is running Web applications. Chrome is a development platform, but in the cloud instead of on the PC.

Implicit in the argument is that while both Google and Microsoft are subsidizing their mobile initiatives with cash from their core businesses, in Google’s case, succeeding on mobile is aligned with and strengthens their core revenue stream in search, while in Microsoft’s, it competes and undercuts their core revenue in operating systems. This becomes clear when Joe turns his mind to lightweight laptops:

Microsoft’s problem isn’t just mobile phones. The next-generation PCs aren’t big, they’re small. Yesterday I was looking at the pink MSI Wind Netbook and thought it would be a perfect Web application computer. “Net” is in the name for a reason.

Microsoft’s Windows Vista is a fiasco that just keeps on giving trouble. I’m not one of the Vista haters, but that doesn’t mean I don’t recognize its foibles. The biggest: Vista demands too much hardware at a time when the market has shifted to lower-powered notebooks and now netbooks and ultra-low-cost PCs. The latter two really can’t run Windows Vista, which is why Microsoft has licensed Windows XP Home for them.

Microsoft had to do something. The company couldn’t abandon the emerging netbook and ultra-low-cost PC markets to Linux, so it licensed Windows XP Home for these devices. Now Google comes along with Chrome, which is more application runtime than Web browser. Chrome should run just fine on netbooks running XP Home, even with the resources consumed by each tab operating as a single process.

What do you bet that Microsoft comes up with a new “improved” release of XP Home that has features deliberately designed to block Chrome? This is, after all, what they did against Netscape in 1996, with Windows NT Workstation allowing no more than 10 TCP/IP connections so that it couldn’t be used with Netscape web servers.

But this kind of backward-looking, defensive competition doesn’t do more than buy you time. Yes, Microsoft killed Netscape, but they missed the deeper, stronger competition that would come from true web applications like Google. The future is not like the past, and any strategy that is designed to protect the past will eventually fail.

What’s so ironic is that if Microsoft started thinking about the user again, instead of thinking about protecting their business, they could do great things. There are many problems yet to be solved in online software, but they won’t be solved without bold leaps into the future.

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  • What Microsoft needs is there own version of iTunes that can compete. They need the centralized windows software distribution portal which integrates with Zune, Windows Mobile and Windows Vista (or whatever desktop OS they are cooking up).

    I wrote about this yesterday (although I hate posting links in comments)

    Microsoft’s mobile solution is nowhere near dead as they are still installed on a vast portion of smartphones. They just need to be able to act quickly rather than act like a big behemoth with large platforms, simiplictiy is key.

    It’s no longer a separate distribution channel for music,movies and software … it is now about the centralized media distribution channel. Apple is dominating, Google is in it (as they dominate search and search is part of distribution) but Microsoft doesn’t have an easy way to find and push out new content for their platforms.

  • Wow! More FUD. Microsoft hasn’t done anything to Chrome, but suddenly that have already made the mistake of making a special version of Windows XP that does not run it. Are you delusional or something?

    Windows and Windows Mobile has a huge number of OEM’s fighting in its corner, and they are not going to give up their business to your God Apple without a fight.

    The Google chrome browser is ridiculously immature, and doesn’t do anything a more mature browser with more features does not do in any case. Like the ridiculous Safari browser on Windows, its completely superfluous.

    If you want to see a real browser check out Maxthon, which supports mouse gestures and easy searching of web page text right out of the box, not to mention a 1000 other functions Google Chrome does not have. Who cares about Gears? To make it worthwile for websites to support it Google will have to support IE in any case, as they have done already.

    Next time think a bit longer before spouting FUDdy crap.

  • I agree. MS needs to amp up the urgency in the mobile market. I am a Windows Mobile user but it is getting harder to not take a serious look at other options including the iPhone because of its superior browser.

  • Very clear thinking. I loved the quote on Chrome as an “application runtime”.

    However, I believe things need to get way worse for Redmond before it adapts.

    Microsoft’s DNA makes it hard to concede failure and change their ways.

    They stood by as RIM delivered mobile eMail that works (whatever became of “embrace & extend”?).

    They are standing by as Apple delivers a mobile UI that works (device manufacturers that want a true touch-interface have to roll their own)

    They won’t budge as mobile OSes are going royalty free (Google and Nokia decisions make selling a mobile OS an uphill battle).

    I never imagined I could feel pity for a behemoth. Things change if the behemoth becomes blind and clumsy.

  • Surur –

    Sorry you think that this post was FUD. At least it is sweet (to some of us) if the FUD goes the other way for once. But I don’t think this is FUD. Remember when Ken Olsen of Digital Equipment Corporation said “The PC is just a toy.” Microsoft has consistently failed to adapt to the sea change represented by the internet.

    See my pieces The Open Source Paradigm Shift and What is Web 2.0? for the main line of my thinking on this subject.

    Martin Lawrence’s example of Google and Nokia providing royalty-free mobile OSes is one good current example.

    You (and Microsoft) have to understand that the current battle isn’t just about who has the best technology. It’s about who has the best business model.

  • Michael R. Bernstein

    “History does not repeat itself, but it does rhyme.” — Attributed to Mark Twain

  • Josh Jonte

    I think that’s a pretty good analysis Tim. But may I be so bold to offer a hypothesis of where Microsoft & Google are going to meet for a head-to-head battle. I think it might explain some of the recent moves by both software giants. And might make predicting their next moves easier.

    Chrome, by Google’s own admission, borrowed heavily from Mozilla. Google is most interested in getting their new virtual machine (aka VM, AKA Javascript engine), V8, out into the wild. V8 was written and designed by one of the most capable VM software engineers in the world. It’s an extremely high-performance VM. Google’s Sergey Brin has already commented that V8 will “probably” run on Android. V8 is really just a dynamic language runtime, one of the languages it happens to run is JavaScript.

    Google Gears is written in JavaScript. The latest release of Gears includes very OS-centric and application-centric features; things like worker threads, timers, http requests, a row-store.

    Now, imagine if Google Gears ran on Google App Engine. Instead of persisting the database in the browser (Sqlite), it persists to BigTable. You would be able to spawn things like worker threads, timers, and http requests. What would it take to run Gears on the server? A high performance dynamic language runtime, a la V8. V8 could potentially run any dynamic programming language, the constructs are similar among all the languages (closures, dynamic typing). App Engine runs Python ATM, Python is a dynamic language. So V8 could be the runtime powering App Engine *right now*.

    So the same runtime in the browser, your phone, and the server. All using the same library, Gears.

    Microsoft has a similar strategy – Silverlight. Silverlight v2.0 is going have built into it a feature known as the DLR, dynamic language runtime. The DLR, per Microsoft’s own commitment, is going to run three languages at it’s release – Python, JavaScript, and Ruby. The runtime powering Silverlight is the .Net runtime. That runtime already exists on the server (has for many years), and the .Net runtime for mobiles has been around awhile as well. Thing is though, when you run Silverlight on a Mac or Moonlight, you’re *costing* Microsoft money – you didn’t pay for a license of Windows.

    That’s why they need to compete so fiercely in the advertising – they need to subsidize (replace?) the loss of people paying for their software.

    At the end of the day, it’s a competition for the Enterprise. Assuming both Microsoft and Google get their data-centers compliant with all the privacy regs (HIPPA, FERPA), they want the enterprise to run their vertical and niche applications on Google or Microsoft cloud.

    V8 + Gears vs. Silverlight

    Ironically (maybe not), Chrome is really just that for Google – it’s just chrome for their runtime.

    Funny thing is, I don’t Adobe knows what they’re getting themselves into with AIR.

  • Josh, “potentially run[ning] any dynamic programming language” on a single VM is more difficult than you might think, especially if you want to do it efficiently, if you want those languages to interoperate in process, and if you want to use pure-language libraries written for other implementations.

  • I guess Microsoft is facing the consequences of the age old legacy of ‘not being able to innovate’.All throughout Microsoft has been criticized as a copycat. Initially the ability that distinguished MS from the rest was that it could copy a concept and present it in a much better, bigger and user-friendly manner. However, in Google they have someone who is excessively innovative and at the same time equally user-friendly and affordable. Hence its started cutting out on MS big time. Microsoft needs to start being innovative in case in needs to grow.

    One particular factor that would truly be worrying for MS is the Google OS. The moment Google comes out with an OS, MS might very well turn into a forgotten leader.

  • Josh Jonte

    @chromatic – I have no doubt it’s a complicated thing. But that’s exactly what Microsoft is doing with the DLR.

    Google has Lars Bak working on V8. He worked on the implementation of Self at Sun labs, was a core developer of the Java VM that became Sun’s HotSpot. He was tech lead on the Monty VM, used as the VM behind Sun’s CLDC technology for mobile phones. I think if anyone could get multiple languages running on a single VM – he could.

    Speculation that Google is coming out with a language runtime is pretty well known on the web. Even one of Microsoft’s best known researchers, James Hamilton, acknowledged it:

    What’s i’m speculating is V8 is going to (already?) power App Engine. And they’re going to use Gears as the library.

  • Joe

    True, photon (WM7) is way too late. It should have been out for a year already. Looks like we’ll get to see it at the PDC.

    But your other points about the threat from Chrome and Joe Wilcox’s points about the search war being done – this are misguided. The search war is about Google’s business model – free software with supported advertising. Search is one implementation of that, but it’s a powerful one because it attracts the most customers. MS *need* to compete in this market to compete with Google, otherwise they will be competing with a product that costs the consumers vs product that is essentially free.

    About the Google Runtime:- Fine, Gears provides functionality for Java Script to run more effeciently and Chrome provides the GUI. As a developer, this is a very immature client side platform compared to desktop technology and other browser plugin models. MS is way ahead here, with Silverlight + CLR + DLR + Visual Studio etc… Long term, if Google wants to build its runtime engine around the limitations of JavaScript/DHTML then I think the MS Live suite of apps will always have the advantage from a UX perspective.

  • Windows Mobile is unchanged from even 2 years ago. It’s still too convoluted for non-technical users. Remember where Palm was 5 years go – it was just them and BlackBerry in the smartphone OS space. Their touchscreen was revolutionary and their Palm OS was easier and more intuitive than Windows Mobile. In my opinion, Windows Mobile is just as dated as Palm OS. I’ve had 3 WM smartphones and they all were slow, difficult to navigate, crashed repeatedly, and sucked the battery dry.

    WM is not innovative, and just because it’s sold and installed by almost every smartphone OEM except RIM and Apple doesn’t mean that it’s good mobile operating system – it just means that OEMs have few alternatives out there. Aside from WM, what choice is there? Palm and Symbian are the only two other mature mobile OSe on the market, and they are both outdated. Symbian is now in Nokia’s camp. WM outsells other smartphone OSes because there are no other practical options. Maybe there is some hope with Linux but no one out there other than Google is working on new smartphone OS for OEMs. Everyone wants their own OS on their own devices.

  • Let’s not forget that the mobile marketplace is a bit of a mess too. The technology is full of proprietary pieces, whether that is Apple, Nokia, WinMo, or others, each platform is different enough that the cost of development is very high if you want to hit 80+% of the market. On the carrier side the walled gardens that exist make it very difficult to play across all carrier networks within any country let alone multiple countries. If the carriers would stick to being pipe providers maybe we would have a chance. But for now even just to get a service going across all carriers in Canada and the US is painful at best. One provider we looked at wanted a 50% tarriff on charges through premium SMS. Short codes are carrier and country specific. There are probably many more examples. The protectionism that was built with mobile is its ultimate downfall for inspiring innovation. Why would you invest in a market where you are only going to hit a small user base?

  • Colin Bowern –

    Absolutely right. That’s why both Apple and Google have convincing strategies while Microsoft does not. Apple has adopted the “we’ll make something so great, and so profitable for us that we don’t care if it doesn’t take over the world” strategy that they’ve used for thirty years. Google is taking the open source road, saying “Let’s break this fragmentation and create incentives for phone providers to standardize by getting rid of their OS costs; we’ll take our cut up the value chain.”

    Microsoft is in the unfortunate position of trying to get everyone to adopt their platform, but without the advantages of being the default software platform on a single commodity hardware platform. Plus all the other disadvantages that Alex Zaltzman outlines.

  • Josh Jonte – great comments about the VM strategy!

  • Did anyone ever suggested a Google computer that runs Chrome only?

  • Sam Penrose

    You’re looking at an entity very different in one key way from O’Reilly (or Google, or Apple) and speculating about it as if that difference did not exist. I mean Microsoft’s current business, of course, which is the FABULOUSLY profitable one of selling lowest-common-denominator PC software to businesses and OEMs. It will take Apple years to make as much money from the iPhone (directly and indirectly) as MS pulls in each quarter without creating anything new. For O’Reilly and Apple watching the Internet-qua-market is a business necessity, for Google it is a calling, but for Microsoft the business (as distinct from Microsoft the marketing machine that has executives give interviews), the Internet-qua-market is really a mildly embarrassing distraction, kind of like the XBox. The battle over whether Microsoft was going to milk the cows or strike out for the brave new world was won in a rout by the Windows Hawks over the Internet Doves a decade ago.

    Same goes for your post on self-linking: the abuses you touched on at NYT and Techcrunch are abuses, but your scolding has an element of projection. Those businesses (and especially the mid-level executives that make these decisions) live and die on short-term advertising returns: page views are quite literally what they sell. You sell something else; page views per se are a complement (though page views by key viewers are not). I’m not sure how best to critique their (obnoxious) practice, but their ability to incorporate your suggestions will depend on the suggestions’ applicability to their business, not yours.

    (Note that I’m writing all of this as a huge O’Reilly/Apple fan and customer, who ignores Techcrunch and MS and isn’t real thrilled with right now.)

  • MSFT understands (and has understood since the early days of the web, that the power is not on web documents but on web applications. But man, they have failed to deliver.

    MSFT has 2 big fronts to tackle: 1)web applications and their legacy apps (i.e. cash cow apps) as SaaS, and 2) mobile.

    MSFT has so much resources, but can steer that boat; I thought Ozzie, who I believe gets it, would be able to do that.

  • One thing Gears needs is really compelling web applications for it to succeed in being fully built into all the browsers out there. My speculation (and it is only speculation) is that Apple have been collaberating with Google on this and their entire strategy for the last year or two has been focused on ensuring that Gears becomes the platform that takes over the mobile and console space.

    The next generation of iTunes will not run solely on iPods, iPhones, Mac and Windows – it will run on the Chrome platform.

    Apple will be providing purchase, rental and subscription services for music, movies, and TV shows that live in the cloud and run on any device that has a browser that supports Gears and has a decent enough javascript engine to run these new kinds of web applications. The songs and movies that you own, or the channels that you have subscribed to, will be accessible from just about any Phone, Mobile device or Games console, or at least those that have built-in decent Gears support. And those that haven’t yet got built-in support will be falling over themselves to do so as they lose market share to everyone else who has.

    The killer application for Chrome? iTunes.

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