Microsoft needs a makeover from top to bottom.
By John Foley
InformationWeek
January 31, 2009 12:01 AM (From the February 2, 2009 issue)
Microsoft (NSDQ: MSFT) needs a makeover, and not one of those cosmetic restructurings where the org chart changes but the company stays the same.
For evidence that its business is broken, look no further than its financial results for the quarter ended Dec. 31 and the fact that the company's stock hit a 52-week low. Microsoft revealed that its client business declined 8% and that sales of Office to consumers plummeted 23%. Microsoft is laying off employees and cutting costs, and it has stopped offering guidance to financial analysts. In other words, Microsoft isn't sure what the hell to expect next.
The economy is partly to blame, of course, but Microsoft's problems are much more deeply rooted. It's a proprietary software company in an open Web services world, and its laudable effort to reorient itself around "software plus services" is taking too long.
What might Microsoft do to remake itself? It could spin off MSN, its entertainment division, or its ERP business to create more nimble, independent companies. Back in June 2000, when U.S. District Judge Thomas Penfield Jackson ordered Microsoft to be split up to stem anticompetitive business practices, it was considered a strong-arm move that the Department of Justice ultimately rejected.
This time, Microsoft's breakup should be voluntary, aimed at shedding bureaucracy (the company's administrative expenses were $5.1 billion in fiscal 2008), unburdening internal developers from the expectation that everything they create be gunked up with hooks to other Microsoft products, and get better products to market faster.
Microsoft has kept its $60 billion ship intact as a way of encouraging synergies across product lines, but that strategy may have reached the point of diminishing returns. Windows PC users want iPods, iPhones, and BlackBerrys, too, not all Microsoft technology all of the time.
Microsoft also needs to do a better job of capitalizing on its huge investment in R&D--$8.2 billion last year--by finding new ways to expose the innovations coming out of Microsoft Research and getting its patented technologies into the hands of entrepreneurs. The Windows ecosystem spends too much time in Microsoft's slipstream.
A decline in venture capital funding makes this a tough time for startups to forge ahead with bold ideas. Microsoft should consider creating its own VC arm and funding startups directly.
Breaking up the company, throwing open research, and pumping money into boot-strapped ventures will require unblinking leadership. Microsoft has a strong mix of veteran top executives and fresh blood, including Stephen Elop, president of its Business Division, and Qi Lu, president of Online Services. But the questions of who will succeed Steve Ballmer as CEO, and when, hang out there. As part of its overhaul, Microsoft must provide an answer.
Illustration by Sek Leung
source : www.informationweek.com
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Minggu, 01 Februari 2009
Microsoft, HP, eBay to weigh in on US privacy laws
The move could lead to a standard federal breach-notification law
By Robert McMillan
January 31, 2009 (IDG News Service) A group of U.S. companies, led by technology giants Microsoft, Hewlett-Packard and eBay, is set to outline recommendations for new federal data-privacy legislation that could make life easier for consumers and lead to a standard federal breach-notification law.
The recommendations, which were developed by a group of industry players called the Consumer Privacy Legislative Forum, are set to be released at an upcoming privacy conference six weeks from now, according to Peter Cullen, Microsoft's chief privacy officer.
The companies have been working for the past three years to encourage the adoption of federal consumer data-privacy laws and to answer the question of what federal legislation should look like, Cullen said in an interview. Other forum members include Google, Oracle, Procter & Gamble and Eli Lilly.
One idea is that laws should make it easier for consumers to understand what they're getting into when they share their personal data with Web sites, Cullen said. "The whole focus on consent really puts an unfair burden on the consumer," he said. "My mom doesn't know what an IP address is."
The recommendations will cover rules around data use and the ability of consumers to correct inaccurate data. And they will cover data breach notification, which is now covered by a patchwork of state laws.
Simplifying breach-notification laws by creating a single federal standard is important, Cullen said Wednesday while speaking at a discussion of privacy policy in San Francisco. "It's not that there is no privacy law. There's actually too much privacy law," he said. "If you think about data-breach notification laws just as an example, there are 38 state laws, many of them very different."
"We need to think about much more of a framework approach."
Congress has passed some laws covering consumer data privacy, such as the 1996 Health Insurance Portability and Accountability Act (HIPAA), but existing laws do not comprehensively cover consumer privacy in general.
Bills have been proposed, but they have all died in committee or on the House floor, said Ari Schwartz, chief operating officer with the Center for Democracy and Technology (CDT), a public policy advocacy group.
Schwartz said he expects new legislation to be put forward again this year. Whether it will pass is another question. "By the end of this year we'll be able to determine whether this Congress can deal with it," he said. "There's a lot going on right now because of the economy, but there are members who have said they want to see privacy legislation."
Although CDT was a charter member of the Consumer Privacy Legislative Forum, the group dropped out about six months after its creation when members decided to focus on working with industry rather than public interest groups, Schwartz said. The split was amicable, he said.
"They're people that are clearly committed to legislation," he said. "A lot of them put their necks out to support it at a time when it would not be as popular as it would be right now."
One academic who follows the topic said it's significant that the industry has agreed in principle that there should be some sort of baseline privacy law.
"That's interesting, because prior to 2006 these groups were pumping money into the libertarian machine, and now the tune is a bit different and more open to different options," Chris Hoofnagle, director of the Berkeley Center for Law & Technology's information privacy programs, said via e-mail.
source : www.computerworld.com
By Robert McMillan
January 31, 2009 (IDG News Service) A group of U.S. companies, led by technology giants Microsoft, Hewlett-Packard and eBay, is set to outline recommendations for new federal data-privacy legislation that could make life easier for consumers and lead to a standard federal breach-notification law.
The recommendations, which were developed by a group of industry players called the Consumer Privacy Legislative Forum, are set to be released at an upcoming privacy conference six weeks from now, according to Peter Cullen, Microsoft's chief privacy officer.
The companies have been working for the past three years to encourage the adoption of federal consumer data-privacy laws and to answer the question of what federal legislation should look like, Cullen said in an interview. Other forum members include Google, Oracle, Procter & Gamble and Eli Lilly.
One idea is that laws should make it easier for consumers to understand what they're getting into when they share their personal data with Web sites, Cullen said. "The whole focus on consent really puts an unfair burden on the consumer," he said. "My mom doesn't know what an IP address is."
The recommendations will cover rules around data use and the ability of consumers to correct inaccurate data. And they will cover data breach notification, which is now covered by a patchwork of state laws.
Simplifying breach-notification laws by creating a single federal standard is important, Cullen said Wednesday while speaking at a discussion of privacy policy in San Francisco. "It's not that there is no privacy law. There's actually too much privacy law," he said. "If you think about data-breach notification laws just as an example, there are 38 state laws, many of them very different."
"We need to think about much more of a framework approach."
Congress has passed some laws covering consumer data privacy, such as the 1996 Health Insurance Portability and Accountability Act (HIPAA), but existing laws do not comprehensively cover consumer privacy in general.
Bills have been proposed, but they have all died in committee or on the House floor, said Ari Schwartz, chief operating officer with the Center for Democracy and Technology (CDT), a public policy advocacy group.
Schwartz said he expects new legislation to be put forward again this year. Whether it will pass is another question. "By the end of this year we'll be able to determine whether this Congress can deal with it," he said. "There's a lot going on right now because of the economy, but there are members who have said they want to see privacy legislation."
Although CDT was a charter member of the Consumer Privacy Legislative Forum, the group dropped out about six months after its creation when members decided to focus on working with industry rather than public interest groups, Schwartz said. The split was amicable, he said.
"They're people that are clearly committed to legislation," he said. "A lot of them put their necks out to support it at a time when it would not be as popular as it would be right now."
One academic who follows the topic said it's significant that the industry has agreed in principle that there should be some sort of baseline privacy law.
"That's interesting, because prior to 2006 these groups were pumping money into the libertarian machine, and now the tune is a bit different and more open to different options," Chris Hoofnagle, director of the Berkeley Center for Law & Technology's information privacy programs, said via e-mail.
source : www.computerworld.com
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