The battle for the net-top heats up

Sometimes, in a long struggle, a goal that was strategic one day, becomes unimportant later.  This happens when some underlying assumption is challenged, when some previously secure resource becomes unavailable, or when the behavior of large groups of people shifts.

(Caveat: my views are my own, and may or may not be shared by my employer, Microsoft. Investors, customers, partners: please, do not make financial or purchasing decisions on the basis of my opinions. Nothing I say is "official." God forbid.)

That doesn't mean that the battle was lost... just that its strategic value is lost.  Winning that battle was hard-fought, and valuable at the time, but that battle, whether won or lost, just isn't as important any more. 

For years, Microsoft has fought to put the most software onto the desktop of every personal computer in the world.  It is no secret that "windows on every desktop" was a rallying cry for this company for a while.  Although we are not so focused on a single product anymore, we still want to get our products on as many machines as we can, and machines into as many homes as possible.  That drives adoption, which creates a de-facto standard, and creating a compelling "virtuous cycle."

We've been criticized for this strategy.  We've been lauded for this strategy.  We've been sued over this strategy.  We've been successful because of this strategy.  Microsoft software on every desktop! 

But now I'm going to venture an opinion... a prediction of the future.

In the future, winning the desktop won't matter as much anymore.   That goal, in the coming decade, will gradually decline in importance.  Putting a bunch of software on every desktop will be nice, and it will earn a lot of money, but, IMHO, it won't fund the next level of growth for Microsoft. 

A new battle has emerged, one for the hearts and minds of the future generation: the generation of the digital native.  This is a battle of love and passion and inventiveness, a battle to earn the good will and the respect of a billion people.  A battle we cannot lose.

Our past is based on the desktop. Our future is based on the net-top.  

What is the net-top?  The net-top is the Internet equivalent of the desktop, a grand shared space where all applications are installed already, and you pay for only what you use.  Where ultimate choice drives the day, where small players and large players alike have an much more even playing-field.  Where it doesn't matter if you live in China or India or Brazil or the USA... you get the same applications, available in the language you choose, and you can choose which ones to use because they are all already installed through the web and Silverlight and services.

The net-top is the new surface of computing.  It is the Internet, plus service, plus software that is needed on the device to make up for the inherent frailty and constraints of the network.  It is neither open source nor proprietary.  It is not a browser.  It could be a mashup surface that provides access to every internet software+service application, already installed (even big-bad Microsoft's services), along with access to the virtual storage needed to hold the information. 

(Note: Hosted desktop services are part of the net-top, but not all.  I'd start there, but my definition far exceeds the hosted desktop solutions that are currently available).

I believe that, eventually, the service is all that will matter, and the download of software to the desktop will be both free, and very simple to do.  It won't matter where the desktop lives: on a laptop or a hosted desktop or a PDA or a telephone or in a car or woven into the material of your winter coat.  What will matter is the service.  Data will be "in the cloud," and available to every service that needs it.

The control of the CIO over the contents of the corporate desktop will wane.   This trend has been going on for some time, and CIO magazine has not only recognized it, but recommended that CIOs embrace it. (See Users who know too much). It is time to let the users have the control.  The force is unstoppable anyway.  Initiatives and products that attempt to wrestle control back to the CIO will meet with success briefly, but will ultimately fail to gain foothold as the tidal wave of user-self-determination washes away these obstacles.

Information will move to the 'cloud.'  There is no avoiding it.  The individual users who create distill information from data will control that information, often outside the boundaries of the corporate walls.  Secrets will become harder to keep, and IP will become even more difficult to control, even as IP becomes more valuable to the survival of the top corporations of the world. 

Corporations will install their on local or proxied versions of popular Internet services in hopes of keeping intellectual property assets from leaking out.  In-hosted services, however, will fail to prevent the migration to the internet cloud, as partnerships and communities will increasingly extend well past the boundaries of the corporation.  As they do, the 'center of gravity' will shift away from the corporation to the community: an extended space defined by the people themselves, with their own rules for information management. 

To cope, Corporations will purchase "spaces" in popular sites for members of their company to collaborate safely.  IT departments will begin to adopt common standards for protecting that data, and will push those standards on large service providers.  A new conversation will emerge, from the IT community that, in the past, drove very few standards.  So while corporate information will move out of IT, control over how it is managed will collectively shift.  Information will be assured and managed, not controlled. 

All of this is driven by the net-top.  This is the new space, and Microsoft is coming.   We are creating products an increasing rate, moving resources, shifting priorities, reorganizing.  The movement is taking hold inside Microsoft, and that is an amazing thing to watch.  I was here when Microsoft "discovered" the Internet, and this time, there is even more seriousness than in the 90's.  Microsoft will not, cannot, has not, ignored the net-top. 

Sure, folks like Salesforce and Amazon are already there, and winning customers with excellent products.  But we are there as well, and we are driving forward at an accelerating rate.  Competition is what drives us all.   No one loves to compete more than Microsoft. 

And you can't count us out.  Not on something we are serious about.  A long time ago, Microsoft was not first in spreadsheets, but now Excel is the king of spreadsheets.  Once upon a time, Microsoft was not the first in presentation software, but now elementary school kids learn Powerpoint as an essential job skill.  I don't know the market share of Exchange or SQL Server, but I'm certain that we have gained, gradually, relentlessly, continuously. 

We are serious about the net-top. 

The battle has been joined.