Ozzie: Is Microsoft Doomed In The Post-PC World?

The only way Microsoft can survive in a post-PC world, is to embrace a future where a multitude of different devices connect to the cloud, according to the much-publicised farewell blog posting Ray Ozzie, who departed as chief software architect at Microsoft last week.

Ray Ozzie’s blog said Microsoft’s future is in “embracing that which is technologically inevitable”, which ignited discussion across the blogosphere. Why did he choose to leave Microsoft at such a critical inflection point?

Several high-ranked executives have departed Redmond over the past year. Some went in search of better opportunities, like Microsoft business division president Stephen Elop who took the CEO reins at Nokia.  Some went in the wake of internal strife, like entertainment and devices division president Robbie Bach who retired following the Kin phones debacle. But Ozzie falls into neither of those clear-cut categories, making his decision all the more mysterious to outsiders.

Microsoft is falling behind

In his blog posting, Ozzie hints at Microsoft’s falling behind in key areas, particularly smartphones.

“Certain of our competitors’ products and their rapid advancement and refinement of new usage scenarios have been quite noteworthy,” he wrote. “Our early and clear vision notwithstanding, their execution has surpassed our own in mobile experiences, in seamless fusion of hardware and software and services, and in social networking and myriad new forms of Internet-centric social interaction.”

Translation: Windows Phone 7 needs to be a hit, or else Google Android and the Apple iPhone will continue to dominate the consumer mobile space.

Ozzie’s view then shifts from mobility to the emerging cloud-based paradigm, which also threatens many businesses’ current models (and which Microsoft has endorsed).

“Organizations worldwide, in every industry, are now stepping back and re-thinking the basics; questioning their most fundamental structural tenets,” Ozzie added. “Doing so is necessary for their long-term growth and survival. And our own industry is no exception, where we must question our most fundamental assumptions about infrastructure and apps.”

Translation: The “PC-centric/server-centric” paradigm, which allowed Microsoft to become one of the dominant tech companies of its era, is in decline. Before its inevitable fall into the trash can of tech history, however, that paradigm begat users with an enormously complex — and confusing — array of interlocking products.

“Success begets product requirements. And even when superhuman engineering and design talent is applied, there are limits to how much you can apply beautiful veneers before inherent complexity is destined to bleed through,” Ozzie wrote. “Complexity kills.” It is also, he adds a few paragraphs later, “inescapable” as products mature.

“But as long as customer or competitive requirements drive teams to build layers of new function on top of a complex core, ultimately a limit will be reached.” At that point, “Fragility can grow to constrain agility. Some deep architectural strengths can before irrelevant — or worse, become hindrances.”

Ozzie seems to be asking his soon-to-be-former company, whose fortunes continue in large part to ride on a famously complex operating system, how it will adapt to a paradigm that embraces simplicity. In his estimation, the future will be one of “continuous services” connected via the cloud to “connected devices” available in “a breathtaking number of shapes and sizes, tuned for a broad variety of communications, creation and consumption tasks.”

Translation: Microsoft needs to adapt as well, or risk being left behind. Ozzie’s blog posting, however, fails to address directly how the company’s flagship products — i.e. Windows — will need to change in order to meet this future.

However, Microsoft’s current issues with tablet PCs could hint at future problems with adapting to lightweight form factors and the cloud.

Microsoft already faces something of an uphill battle in creating a Windows installed base for the rapidly expanding consumer tablet market. Some of its largest manufacturing partners, including Samsung with the Galaxy Tab and Dell with the Streak, have built tablets running Google Android.

Hewlett-Packard is offering a Windows tablet PC, the Slate 500, for the enterprise market, but the general expectation is that the company will devote much of its tablet energy to devices running Palm WebOS. And Apple’s iPad, of course, continues to dominate the category.

Despite his earlier assertions that “new slates with Windows on them” would appear “this Christmas,” Microsoft CEO Steve Ballmer seemed determined to dodge the tablet question during an 21 October keynote at the Gartner Symposium/ITxpo 2010 event.

“Devices ship all the time,” he told the audience of CIOs and other executives. “You will continue to see an evolution of devices. That’s what you’ll continue to see. … There’s a next generation of things that will come with the Intel processors.”

Those “Intel processors” are a reference to the chip maker’s low-power “Oak Trail” Atom processor, due in 2011. Ballmer has previously hinted that a Windows-centric tablet PC push would come with those processors’ release.

But some analysts suggest that Microsoft needs to do more than merely load Windows 7 onto a touch-screen form factor; the operating system itself needs to be redesigned to take into account fingers and different hardware.

“Microsoft and its partners must develop UX shell(s) appropriate to the tablet format to compete with Apple’s excellent iPad performance,” Forrester analysts J.P. Gownder and Sarah Rotman Epps wrote in a May research note.

In his blog posting, Ozzie discusses some of Microsoft’s positive cloud steps: Windows Azure and the online version of Office, Bing and SQL Azure. But the rest of his entry—coupled with Microsoft’s wrestling over its tablet PC entries—suggests the company could face some major growing pains if it wants to adapt to the possible next tech transformation.