Why Microsoft needs to close the circle, but not the loop

27 Sep 2010

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Siliconrepublic editor John Kennedy on why Microsoft’s apps ecosystem – where 20 million people have downloaded Office software – and its Bing search engine should not be underestimated. The software giant is better positioned than most people think.

Over the weekend, I had the opportunity to see a very good interview on the Wall Street Journal website where Google CEO Eric Schmidt talked candidly about the internet, Android phones, Apple and Microsoft.

The biggest surprise of the interview was when he said that Bing, Microsoft’s search rival to Google, was the search giant’s biggest threat, not Facebook. And he went on to say that Apple’s closed proprietary technology model was at odds with the "open" philosophy he espouses.

Schmidt knows his technology and I’m with him on the Microsoft point. With all the innovation we’ve been trying to absorb over the past couple of years from the rise and rise of Facebook and Twitter to the eponymous iPhone and the rapid uptake of the Android OS, people seem content to forget and occasionally diss Microsoft for not being at the races on competing with new arrivals.

Microsoft – not so closed

Microsoft has also traditionally been painted as the chief architect of closed and proprietary models. In fact, the company is more open than you would think. It is actually part of the open source world in its own way and with Windows Azure is endeavouring to build a vibrant apps community.

What people don’t realise is that Microsoft has fully embraced the cloud as its ethos and today at least 400 Irish software firms are developing for the Windows Azure platform. That doesn’t sound very closed to me. Having walked around the US$1bn data centre that Microsoft constructed on Dublin’s western fringes, you can see the company means business.

The simple fact is Microsoft is so ingrained in the technology world – from the personal computers at our desks to the large enterprise systems that drive corporations – that it doesn’t need to feel too threatened if Twitter or Foursquare or Facebook or Google try to eat its lunch. The fact about technology is that anyone can build what they like, isn’t there a thriving business in the States for patent trolls, for pete’s sake. The more innovation people bring to the table, the more disruptive, the better for the rest of us.

But when it comes to the cloud and Microsoft’s impending launch of Windows Phone 7, I expect the software giant to show teeth.

Just last week, Microsoft revealed that in the 100 days since Office Web Apps has been launched, more than 20 million people are using the tools to edit, view and share Office documents from anywhere with a web browser and an internet connection. The company marked the achievement by releasing new features based on the feedback from 25,000 comments.

The company said it will be making Office Web Apps available in seven more countries – Australia, Austria, Belgium, France, Germany, Russia and Switzerland. Office Web Apps are already available in the US, the UK, Canada and Ireland.

Microsoft and apps adoption

Speaking with Siliconrepublic recently, Microsoft Ireland managing director Paul Rellis said that Irish firms are leading the charge in terms of using Microsoft apps and that 1,000 apps are being used and tested in Irish businesses. “We are now No 1 in terms of apps adoption,” he explained. Rellis said that so far some 10,000 seats of Microsoft Business Productivity Online Suite (BPOS) have been bought by Irish-based organisations.

The only problem – if it is a problem – for Microsoft, is it has so many technology interests from TV to gaming to peripheral devices to the enterprise tools that dominate global businesses. It’s time to complete the circle.

If it is to triumph amid all the innovation and new technologies daily visiting us, I believe it needs to start closing the circle a little and uniting its own innovations and at the same time create a vibrant platform for developers. For example, the Xbox 360 could be a great paradigm for web TV, even video calls from the TV in your living room. The Windows 7 Phone could feature apps that make sure you don’t miss your favourite TV show. The Kinect physical gaming platform could potentially have loads of mobile fitness apps that integrate with the gaming system. Indeed, Kinect could one day be our web browser of choice – think Minority Report where Tom Cruise’s character shuffles through data with his fingers.

The software giant has all the ingredients to create an open app market that could truly flourish. Forget what people say about Microsoft missing the boat on the iPad or iPhone. I’m with Schmidt on this one, watch Bing and watch the cloud.

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com