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This piece from Chris Nuttall in today’s FT caught my eye.,_i_rssPage=3ad4cbfc-4761-11d8-81c6-0820abe49a01.html

Apparently Microsoft’s top executives have admitted in internal memos that the company has failed to achieve leadership in key technologies and that its business is at risk if it fails to respond “quickly and decisively” to changes in the market.

Says Nuttall: “Bill Gates said in an e-mail to senior staff, dated October 30 and obtained by the Financial Times on Tuesday, that “the next sea change” was upon the company and a “coming services wave will be very disruptive”. In the message, the chairman of the world’s largest software maker introduced a memo from Ray Ozzie, chief technical officer, which Mr Gates predicted would be as critical to Microsoft as “The Internet Tidal Wave” memo he himself wrote 10 years ago. In that memo Mr Gates belatedly issued a rallying cry for the company to embrace the internet, or risk drowning in its backwash.

The Ozzie memo, “The Internet Services Disruption”, outlined a similar challenge where the growth of broadband, wireless networking and a new business model around advertising-supported web services and software “has the potential to fundamentally impact how we and other developers build, deliver and monetise innovations.”

Mr Ozzie said Microsoft “must respond quickly and decisively”. “It’s clear that if we fail to do so, our business as we know it is at risk.”

Ozzie apparently detailed areas where Microsoft had failed to become a leader in technologies which, in some cases, it had pioneered.

It had trailed in developing the Ajax group of tools that allowed live and dynamic updates of web pages. It also allowed RSS, or Really Simple Syndication, feeds to become a dominant distribution method on the internet and Adobe’s Portable Document Format to become more prevalent than its Office products,

“We knew search would be important, but through Google’s focus they’ve gained a tremendously strong position,” he said.

“While we’ve led with great capabilities in Messenger and Communicator, it was Skype, not us, who made [Voice over Internet Protocol] broadly popular and created a new category.”

Ozzie criticised the company’s end-to-end execution as often “uneven – in large part because of the complexity of doing such substantial undertakings. Complexity kills. It sucks the life out of developers. It makes products difficult to plan, build and test.”

Bill Gates woke up and smelt the coffee 10 years ago – looks like he is doing the same again with the help of Mr Lotus Notes.

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