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Microsoft in 2009: Back to Basics

"Dance with the one what brung ya."
-- Old Texas saying often used by, and possibly even coined by, Darrell Royal, former football coach at the University of Texas

We hope that your editor's fellow TCU Horned Frogs out there -- we know you're reading -- will forgive a quote from an old rival, but we just couldn't think of a better quip to describe Steve Ballmer's state-of-Microsoft speech delivered on Wall Street this week.

As Redmond magazine columnist and long-time friend of RCPU Mary Jo Foley explains, Ballmer laid out Microsoft's product-investment priorities for the year, and he mostly avoided dwelling on the stuff that produces groans and eye rolls from our little corner of the peanut gallery. (RCPmag.com's Kurt Mackie gives a great breakdown of the actual investment numbers plus some additional analysis here.)

Mary Jo lays out Ballmer's seven areas of focus in a blog entry -- we've removed her lengthy and helpful analysis for the purpose of brevity:

"1. Windows
2. Mobile
3. Desktop productivity (as in Office, SharePoint and even Dynamics)
4. Server and tools
5. Enterprise software (as in SQL Server)
6. Search and advertising
7. Entertainment and TV"

We like that list, and especially the order of it. Knock mobile down a few notches, and it would be just about perfect. Hack the last two categories off altogether, and it might look even better. But we digress. It wasn't all that long ago that Ballmer was making noises about turning Microsoft into an ad agency, or at least coming close to it. Now, though, the austerity required to survive a recession seems to have brought Microsoft back to its roots: the software and tools that have made the company the titan it is today. We've said before (and more than once) that these bad times might be a good time for Microsoft to de-emphasize some of its more fanciful projects, such as trying to catch Google in consumer search or trying to create the next iPod, and get back to the basics that have made the company and its partners so successful over the years.

Apparently, Ballmer is starting to see things our way -- hello, Steve, if you're out there -- and while Microsoft isn't giving up the ghost on going after Google, the company does seem to have its priorities in order. Microsoft's core product portfolio -- Windows, Office, servers, the enterprise stuff -- might be the strongest in the industry, and it's going to be that portfolio that'll carry Microsoft and its channel through the rough economic times to come that Ballmer keeps predicting.   

And maybe, if and when the economic sun does shine again and we can all check our portfolios without cringing, Redmond will remember this downturn and continue to focus on the bread-and-butter products that got it where it is today rather than chasing after other dance partners. The one what brung Microsoft still looks pretty darn good.

Where would you like to see Microsoft invest its money in 2009? Sound off at lpender@rcpmag.com.

Posted by Lee Pender on 02/25/2009 at 1:22 PM


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