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What's next for the post-Ozzie Microsoft? No one knows.

What's next for the post-Ozzie Microsoft? No one knows.

JP Mangalindan 2010-11-01

????As a giant of technology departs, it's time to start asking, what's next for Steve Ballmer's Microsoft?

????When Microsoft (MSFT) announced Chief Software Architect Ray Ozzie would be moving on, some viewed it as another blow to a company with a bit of a vision problem. Ozzie was only the second person to be the company's CSA -- the first being founder Bill Gates, who took the role upon retiring as CEO, but gave it to Ozzie in 2006. Ozzie's not the only recent departure among the top ranks. Just last month, Business Division President Stephen Elop left for Nokia (NOK). James Allard, who led the XBOX and Zune projects, left earlier this year, too.

????In many insider circles, Ozzie was seen as a visionary -- the Lotus Notes inventor had even been called "the next Bill Gates." So hopes were high, especially given his presentations and various memos over the years detailing his vision of how the company's software should evolve, most famously one titled, The Internet Services Disruption. Though the company credits him with bringing the company's cloud platforms Azure and Windows Live, up to speed, it's clear Ozzie in some ways never quite got his arms around all the company's efforts -- and it's fair to wonder whether any one person still can. Perhaps that's why CEO Steve Ballmer is retiring the CSA role, with no plans to replace Ozzie once he departs. (Or perhaps it's because Ozzie's far-reaching idealism clashed with Steve Ballmer's more short-term, business-oriented ambitions and there's no reason Ballmer would willingly start a similar relationship with another "visionary.")

????In his 3,433-word farewell memo entitled "Dawn of a New Day," Ozzie reiterated his and the company's achievements over the last five years but also warned the company of the challenges ahead: a future beyond the PC.

????"It's important that all of us do precisely what our competitors and customers will ultimately do: close our eyes and form a realistic picture of what a post-PC world might actually look like," he wrote.

????Whether Ozzie's departure hurts the company's prospects or not at all, it begs the question: what's next? We sought the opinions of a few analysts, and also a few pioneers in cloud computing -- an area where Microsoft seems behind the curve -- who seemed to agree that the company has some serious catching up to do.

Zach Nelson
CEO, NetSuite

????The current CEO of the "software as a service" company, who joined in 2002, wasn't surprised to hear of Ozzie's departure. (He'd actually forgotten Ozzie joined the company entirely.) For Nelson, Microsoft's problem is its legacy and lack of innovation. Though it continually develops new software, the software has either been built around devices that have become irrelevant -- in this case, Nelson argues it's the PC -- or the software itself hasn't stood out.

????Nelson compares Microsoft's fate to IBM's, when the once mighty mainframe server-maker transitioned into a services-driven company. Microsoft should (and will) shift more towards services and consumer products.

????"When Office moves to the cloud, I think they'll be in big trouble in the business market because that's their only outlet," he says. "The one application that drives the rest of business today is Office. When that moves to the cloud, why not look at Google, why not look at something else. Why not look at something for free?" As Nelson sees it, Microsoft will still have a large presence in the industry, but it won't be relevant to the future. The mantle will be passed to a new set of companies.

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