@Multizone

“strategy and innovation without execution is hallucination” said Kevin Turner in a very memorable soundbite.

Turner is the COO of Microsoft. His presentation at Microsoft Partner conference is important because he is detailed about numbers and in the inner circle of unassailable leaders of the company.

Microsoft's new slogan regarding cloud computing is 'We're all in'. That may be, but Multizone believe this will be a year of evolution and internal introspection as the company re-tools and refocuses on what exactly this means they have to do. 'We're all in' is, Multizone believes, as big a call to action for Microsoft as Bill Gates 'Internet Tidal Wave' memo in the 90's. But what is not clear is how this will affect partners ability to make money while Microsoft shifts focus.

A briefing for customers and Microsoft employees alike

Turner came on stage talking about how he was going to use ‘Action oriented terms’ and then said his words were both for Microsoft employees and for Partners as he felt it was an inflection point for both. Multizone believe that this means that the information being presented was directly imparting Microsoft strategic intent to employees and partners at the same time and warning both that actions in support were expected. It was new, current and freshly created an indicator as to how reactive the Microsoft senior management are - and just how ‘top down’ the company is being run by the inner circle.

Read on for more detailed observations.

Themes

Turner outlined several themes he announced last year in New Orleans

1. Be realistic about the cause of our challenges - economic vs strategy
2. Prepare for an unknown length and depth of downturn
3. Deepen and strengthen customer and partner relationships
4. Grow market share and compete to win
5. Respond with urgency

He said that Microsoft succeeded against the targets it set for itself and grew market share in 13 of 15 key initiatives that his business measures.

Failures

Windows Mobile didn’t grow (it was being ‘rebooted’) and the Browser didnt grow, as Microsoft took its collective eye off the ball. Both were being addressed by Windows Phone 7 and Internet Explorer 9 respectively said Turner.

We're All in - setting a new goal for Microsofts next twenty years

He underlined that winners and losers in difficult times are going to be determined by market share growth. Microsoft’s original founding purpose in 1975 was to put a PC on every desk and in every home - Turner set Microsoft a new goal for the next twenty years -

"Continuous cloud service for every person and every business."

This ambitious goal replaces the founding purpose, but as Bill Clinton was to point out later on in the day, there are still many parts of the world where access to computing is not in the hierarchy of needs when water and basic food and medecine is not available.

In expanding on the new purpose, - which, by the way Multizone believes is a bigger seismic shift than the “Internet Tidal Wave” email Bill Gates sent out in the early 90s, - Turner gave some clues to the drivers behind these changes.

"Customers dont want to do upgrades", he said.

Work and life is mixing together and with connected capability driven by the Internet productivity is going to explode requiring Microsoft to respond with products and services that meet the needs of this new market.

“Smart clouds talking to smart devices”, he added, “this unlocks unbelievable opportunity for partners in new markets for new revenue streams. This is a multi-year journey thats going to take twenty years and make no mistake we are transforming ourselves into a cloud services company”.

Turner went on to describe how much change was going inside Microsoft. That he is rebooting the whole company on the cloud and committed to innovation and execution.

In talking about Microsofts massive $9bn R&D investment, he disclosed that 70% of all developers at Microsoft are working on cloud technologies, and in a year it will be 90%. Multizone beleive there is some risk here for Microsoft because it means that to be successful in development in Microsoft you must be working on the fashionable technologies which may result in a vacuum of talent in so called legacy applications.

Turner on Windows and Office version market share

In talking about competition Turner gets the most animated. Apple he said, "was #1 for defects and Oracle #2 for defects". Windows 7 he said, "was the most tested, least defective product Microsoft had ever released". He implored partners to lead with the cloud, drive adoption of Windows 7, grow market share, and drive customer satisfaction. Again revealingly, he showed numbers that showed 85% of Windows PC’s are still on XP & Vista and 52% have old and vulnerable Internet browsers. 63% have old versions of office. This, he said, was an amazing enterprise and consumer opportunity for partners to exploit.

In competition Google, Apple, VMware, Linux and Oracle were the targets. IBM was not on the list, although the numbers shown in other presentations show reasonable (17-22% market share still in some segments). Presumably denying them the Oxygen of publicity is deliberate.

Turner on Google

Turner had some great competitive stories to tell. Under the heading “Dont let our customers get googled“ he mused that they recently they introduced a ruler, something Microsoft Word has had for 14 years, and showed slides of comments from real customers moaning about google mail. Visible Microsoft losses to google had been won back - Datatune, Vinci, Phaeton, Serena.

Although there were some huge onlne services wins displayed there were no really great ones from the UK apart from the University of Aberdeen instead brands like Amex, Coke, McDonalds, Starbucks.

On search he implored us to use and evengelise bing and reminded us that Microsoft had no vans snooping your wifi in every street. (Although the Bing Maps Street View had demonstrated a camera view of the street similar to Googles). Finally he poked fun at Google by reminding them that Microsoft, unlike Google dont need to have a mission statement that reminds them not to do evil.

Turner on Apple

On Apple turner talked about the Apple Tax - in terms of pricing, and measured it against processor speed, battery life and such like. These are things that MacBook users dont tend to care about however so Multizone believe that  Microsoft choose not to explain their Apple strategy fully to partners. The processor speed alone is not why people buy Apple products. They announced 92.8% market share versus a declining 7.2% for Apple. This data while interesting does not tell Multizone how many XP end of life PC’s are ‘switchers’. Keep an eye out for that data. Neither does it explain the Online Services full support of Mac OS X 10.6 and Safari, and the existence of the Mac Business Unit and its forthcoming major release 'Office 2011'

On Windows Phone 7 Turner extolled the virtue of the New UI, and explained he had rebooted the whole team. Multizone wonders if many were booted out. It certainly is a shake up under Andy Lees, a specialist at turning around Microsoft business units.

Turner announced that “The iPhone 4 is Apples Vista”. Multizone don’t agree, but we do think that the iPhone 3 with an IOS4 upgrade is just like Vista was - slow, bloated, and mismatched to the hardware it was running on.

Rounding on the iPad he said they were great content consumption devices but that these are generally ‘third devices’ which are really good a that but lousy at content creation. Slates would be better he said.

He missed an important detail. iPads are shipping in market worldwide. Slates are not.