Dawn of a New Day

Five years ago, having only recently arrived at the company, I wrote The Internet Services Disruption in order to kick off a major change management process across the company.¹ (Fact note 1)Fact · 1Known at the timeThe memo is dated October 28, 2010, five years to the day after the 2005 memo, but it was public three days earlier: Ozzie’s blog lists the post introducing it on October 25, 2010, and TechCrunch reported it at 3:08 AM PDT that day. The earliest Internet Archive copy of the page, from 26 October, already carries the 28 October date. Ozzie addressed it to “Executive Staff and direct reports”; we have found no record of when, or whether, it was sent inside Microsoft before he posted it.SourcesRay Ozzie’s blog (Internet Archive copy)Dawn of a New Day « Ray Ozzie25 Oct 2010Ray Ozzie’s blog (Internet Archive copy)Dawn of a New Day « Ray Ozzie25 Oct 2010TechCrunchFive Years Later, Ray Ozzie Pens Another Great Memo: "Dawn Of A New Day"25 Oct 2010The New York TimesThe Internet Services Disruption (memo PDF)Nov 2005 In the opening section of that memo, I noted that about every five years our industry experiences what appears to be an inflection point that results in great turbulence and change.

[ … ] Not shown: Progress since 2005: Windows Live, Office 365, Xbox Live.

And in the realm of what I referred to as our ‘services platform’, I couldn’t be more proud of what’s emerged as Windows Azure & SQL Azure. Inspired by little more than a memo, a few decks and discussions, intrapreneurial leaders stepped up to build and deliver an innovative service that, while still nascent, will over time prove to be transformational for the company and the industry.

[ … ] Not shown: Bing, Windows, Office and servers; openness and responsible competition.

Yet, for all our great progress, some of the opportunities I laid out in my memo five years ago remain elusive and are yet to be realized.² (Editorial note 2)Editorial · 2Known at the timeA rare thing: an executive marking his own strategy memo in public. The grade is generous on vision and hard on execution. The 2005 memo did see two of the three gaps he now names: it praised Apple for having “done an enviable job integrating hardware, software and services into a seamless experience” and conceded Microsoft was “only now” passing BlackBerry. Seeing the shift early did not close it.SourceThe New York TimesThe Internet Services Disruption (memo PDF)Nov 2005

Certain of our competitors’ products and their rapid advancement & refinement of new usage scenarios have been quite noteworthy. Our early and clear vision notwithstanding, their execution has surpassed our own in mobile experiences, ³ (Fact note 3)Fact · 3With hindsightOn 8 July 2015 Microsoft said it would record an impairment of about $7.6 billion on the phone business it had bought from Nokia and cut up to 7,800 positions, mainly in phones. Satya Nadella described a move away from “a strategy to grow a standalone phone business”. The mobile gap this sentence names was still open five years later.SourceMicrosoft, Form 8-K filed with the SEC (Internet Archive copy)EX-99.18 Jul 2015in the seamless fusion of hardware & software & services,⁴ (Fact note 4)Fact · 4With hindsightOn 18 June 2012 Microsoft unveiled Surface, Windows tablets “conceived, designed and engineered entirely by Microsoft employees”, promising “the power of amazing software with Windows and the feel of premium hardware in one exciting experience”. Windows 8 went on sale on 26 October 2012 with more than 1,000 certified PCs and tablets; Steve Ballmer said it “brings together the best of the PC and the tablet”.SourcesMicrosoft News Center (Internet Archive copy)Microsoft Announces Surface: New Family of PCs for Windows | News Center18 Jun 2012Microsoft News Center (Internet Archive copy)Windows 8 Arrives | News Center25 Oct 2012 and in social networking & myriad new forms of internet-centric social interaction.

[ … ] Not shown: Five years of change in networks, chips and screens.

The past five years have been breathtaking. But the next five years will bring about yet another inflection point – a transformation that will once again yield unprecedented opportunities for our company and our industry catalyzed by the huge & inevitable shift in apps & infrastructure that’s truly now just begun.

[ … ] Not shown: Windows at 25, and the complexity the PC model accreted.

Complexity kills. Complexity sucks the life out of users, developers and IT.⁵ (Editorial note 5)Editorial · 5Known at the timeThe 2005 memo said complexity “sucks the life out of developers” and put users last, under “end-user and administrator frustration”. Here users lead the sentence, and “use” joins plan, build and test. The edit puts the customer’s experience of complexity first, which is the case for simple devices backed by services, and it implicates Windows itself.SourceThe New York TimesThe Internet Services Disruption (memo PDF)Nov 2005 Complexity makes products difficult to plan, build, test and use. Complexity introduces security challenges. Complexity causes administrator frustration.

[ … ] Not shown: Complexity also protects incumbents, until it limits agility.

Our PC software has driven the creation of an amazing ecosystem, and is incredibly valuable to a world of customers and partners. And the PC and its ecosystem is going to keep growing, and growing, for a long time to come.⁶ (Fact note 6)Fact · 6With hindsightGartner reported on 9 January 2014 that worldwide PC shipments were 315.9 million units in 2013, a 10 percent decline from 2012 and “the worst decline in PC market history”, after a seventh consecutive quarter of decline. Gartner’s figures exclude tablets such as the iPad; it said “consumers skip PCs for tablets” in emerging markets.SourceGartner (Internet Archive copy)Gartner Says Worldwide PC Shipments Declined 6.9 Percent in Fourth Quarter of 20139 Jan 2014 But today, as I wrote five years ago, ”Just as in the past, we must reflect upon what’s going on around us, and reflect upon our strengths, weaknesses and industry leadership responsibilities, and respond. As much as ever, it’s clear that if we fail to do so, our business as we know it is at risk.”

[ … ] Not shown: Picture a post-PC world, and imagine fearlessly.

Instead, to cope with the inherent complexity of a world of devices, a world of websites, and a world of apps & personal data that is spread across myriad devices & websites, a simple conceptual model is taking shape that brings it all together. We’re moving toward a world of 1) cloud-based continuous services that connect us all and do our bidding, and 2) appliance-like connected devices enabling us to interact with those cloud-based services.⁷ (Fact note 7)Fact · 7With hindsightOn 10 July 2014 Satya Nadella told employees “We live in a mobile-first and cloud-first world” and called Microsoft “the productivity and platform company for the mobile-first and cloud-first world”. His email describes “Billions of sensors, screens and devices” much as Ozzie describes connected devices here.SourceMicrosoft News Center (Internet Archive copy)Satya Nadella's email to employees: Bold ambition and our core10 Jul 2014

[ … ] Not shown: What continuous services are, and why trust and privacy matter.

Connected devices beyond the PC will increasingly come in a breathtaking number of shapes and sizes, tuned for a broad variety of communications, creation & consumption tasks. Each individual will interact with a fairly good number of these connected devices on a daily basis – their phone / internet companion; their car; a shared public display in the conference room, living room, or hallway wall. Indeed some of these connected devices may even grow to bear a resemblance to today’s desktop PC or clamshell laptop. But there’s one key difference in tomorrow’s devices: they’re relatively simple and fundamentally appliance-like by design, from birth.⁸ (Editorial note 8)Editorial · 8Known at the timeThis is the sentence with the most at stake for Microsoft. A device that is “trivially replaceable without loss” keeps nothing on it worth defending, so the value moves to the service. Windows earned its keep by being the place files, programs and settings lived. The memo describes that value leaving the device, and does not say what Windows becomes. They’re instantly usable, interchangeable, and trivially replaceable without loss.

[ … ] Not shown: Embedded devices, and why continuous services are hard to build.

It may take quite a while to happen, but I believe that in some form or another, without doubt, it will.

[ … ] Not shown: New apps, devices and platform models needed to lead.

The one irrefutable truth is that in any large organization, any transformation that is to ‘stick’ must emerge from within.⁹ (Editorial note 9)Editorial · 9Known at the timeOzzie wrote this as he was leaving: Ballmer had told employees on 18 October that Ozzie would step down and that the chief software architect role would not be refilled. The memo therefore hands the change to readers below him, and names no owner, plan or date.SourceIT Brief AustraliaRead Steve Ballmer's email on Ray Ozzie's resignation21 Oct 2010 Those on the outside can strongly influence, particularly with their wallets. Those above are responsible for developing and articulating a compelling vision, eliminating obstacles, prioritizing resources, and generally setting the stage with a principled approach.

But the power and responsibility to truly effect transformation exists in no small part at the edge. Within those who, led or inspired, feel personally and collectively motivated to make; to act; to do.

In taking the time to read this, most likely it’s you.

[ … ] Not shown: The 1939 World’s Fair, and a vision of devices to come.

Let there be no doubt that the big shifts occurring over the next five years ensure that this will absolutely be a time of great opportunity for those who put past technologies & successes into perspective, and envision all the transformational value that can be offered moving forward to individuals, businesses, governments and society. It’s the dawn of a new day – the sun having now arisen on a world of continuous services and connected devices.

[ … ] Not shown: A call to embrace what is technologically inevitable.

Ray