The Wizard of Ozzie

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Toto pulls back the curtain to reveal the fearsome Wizard of Oz as a meek, mild-mannered guy pulling the levers of power.

Seems to me the metaphor holds as Ray Ozzie, Bill Gates’ successor as Chief Software Architect, wields his considerable intellectual prowess to shape and mold the future of Microsoft. Understanding Ozzie and how he views the computing experience goes a long way to understanding what looks like the transformation of MS from a desktop-centric to a web-centric company. That this represents nothing less than a revolution in the way MS does business is an understatement.

If you did not fall asleep in BIO 101, “imprinting” is one of those fundamentals you learn. I remember an experiment with baby ducks where upon hatching, the ducks first saw some person rather than another duck. This person then became its parent figure. Ozzie’s imprinting began with the “Plato Project” – as he remembers it:

“This was ’74, this system was about 1,000 terminals on one CDC. … The whole thing was supposed to be about teaching, what teaching would be like with these automated systems. But during the off hours people could use it for all sorts of things. So people built interactive games, online discussions, there was an online community, people met each other, got married.

“I hesitate to say the Net but it was a centralized system. The fact that we, tens of thousands, were explosed to that system, were fortunate and got exposure to that online community got ahead of what we ultimately have.”

Source: Seattle Times

For Ozzie, the trans-formative event during Plato was a collaboration he was having with someone he never met personally. They worked and Ozzie found him to be a lousy, slow typist with many spelling errors. When he finally met this person, he was amazed to see that he was a quadriplegic who typed with his tongue. Not only did Plato transcend space, it transcended physical boundaries in a very unexpected way, allowing Ozzie to “mind meld” with his colleague on-line.

On-line collaboration and building the software tools to accomplish this end is one of the driving forces for Ozzie. The fossils among our readers will remember Lotus Notes and Symphony, early collaborative tools commonly used in businesses. This was Ozzie’s baby which was bought by IBM for a nice piece of change. Subsequently Ozzie founded another company called Groove Networks which developed a suite of collaborative desktop tools; it was acquired by MS in 2005 and Ozzie came along with to work at MS.

Seeing a pattern here? Collaborative network-based tools are central to Ozzie’s vision of what computing is all about. As such Ozzie’s vision is much broader than developing a bunch of stand-alone tools; rather it involves a sweeping view of integrating PC appliances, such as smartphones, netbooks and PCs, into a seamless user computing experience. Underlying this vision is the “cloud”, the web-centric super-computer which houses apps, data and developer programming tools to deliver costumer solutions.

A second theme stressed by Ozzie is a change for MS in getting paid for consumer based cloud-apps. MS has used the classic “buy the shrink-wrapped software” business model to build its desktop OS monopoly. This will change to some degree as Ozzie implements an ad-based business model:

“With growth projected from $40B today to $80B in the next three years, online advertising will continue to be the primary monetization mechanism for consumer services on the web. As advertising transitions more and more to being digital, measurable, and competitively bid, the “ad platform” is key.”

Source: readwriteweb.com

In addition Ozzie is a believer is providing a “taste” of apps so that consumers can experience the app as a freebie and pay for up-grading to the full powered app. Lo and behold, MS’s web-centric productivity suite will be available to consumers for free, but the full powered versions will be pay products.

The over-arching vision Ozzie brings to MS is the “mesh”. The key to success in this evolving net-centric world is to make software and services play nice together such that users can use a variety of PC appliances (smartphones, TVs and PCs) to access computing solutions. No easy task by any means but don’t doubt that MS is basically attempting to be the company which provides the best set of developer and consumer apps to maintain its dominant market share. It has the money and resources to focus on this task, but it will take more than sheer horsepower.

I love change-agents; MS is a very successful company that was being strangled by what made it great. The mass of money and people that defines MS also defines how it competes and views its business. That MS is a technology company underlines its marketing approach – we build the technology product and consumers buy it because we build it. With 90% market share, this works just fine – or so MS thought until the Vista debacle.

Events and competition are combining to change the business model. And that’s where MS is today – at the crossroad where net-centric solutions are becoming the real competitor and net-centric ad-based competitors (eg Google) have enough heft to pose a serious challenge to MS’s business model. Recognizing the issue is the easy part – introducing the change agent to confront and change the MS culture is the daunting challenge the Ozzie faces. And have no doubt that Gates and Ballmer view Ozzie as the man to do the job, because they can’t as they are so infused with the “old MS”.

Ozzie’s unassuming style is markedly different from Gates. Ozzie is not comfortable in the spotlight – that falls easily to Ballmer. But Ozzie has something that is so necessary to pull the rabbit out of the hat – he is most comfortable working at the grunt level with the folks who do the work. And that’s where MS will adapt or stagnate. Corporate Culture is not some airy-fairy consulting term – it’s as real as the buildings housing employees. Changing an entrenched culture pivots on the change agent, and Ozzie may be the guy to pull it off.

Expect to see MS using the term “software + sevices” almost mantra-like in its publicity. Look for MS to increasingly offer free reduced-capability products to consumers with full-capability products on a pay-basis. Expect MS to make web-centric software and services the basis of its strategic thrust. Finally, don’t be surprised to see a “kindler and gentler” MS than we’re used to, talking to customers as customers and not so much as a captive audience.

If MS successfully shift gears, it’s going to be a great case study in changing corporate culture, If not, it will be a great case study in how successful companies fail. Either way it’s going to be fun to watch.

 

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