Ray Ozzie gets it. Down but not out..

There is a great article from Wired that describes Ray Ozzie as the “microprocessor” of the development engine at Microsoft:

The company must transform itself from a manufacturer that dumps out a big product every couple of years to a customer-obsessed enterprise devoted to continually producing, updating, and supporting a full panoply of services. In his speech, Ozzie puts it this way: “When packaged software ships, services go live. What was our end is now the beginning. The gold disk”—from which all retail copies of a new piece of software are made—”is now the grand opening.”

This means two things:

1. The products matter more than ever. When you compete in this space you lower the switching costs, and people are less likely to hesitate to vote against you with their dollars.
2. Microsoft has to undo years of overconfidence and employee training in the way things get done. There must be zero tolerance for old processes that lead to stupid and frustrating decisions in their software.

I wish them luck, but I suspect that #2 will be an 50 ton anchor that may take them long enough to shed as to make them a strong second or third instead of first.