I actually had another post in the hopper that I have been working on around Cloud, but I had a discussion with someone about the rapid changes in both enterprise IT and consumer IT and how we thought it would shake out and I had to bring it here. We talked about current companies and who would thrive and who would die.  The one big company that stuck out in my mind is Microsoft.

I think Microsoft is dead, they just don't know it yet.

Well, not completely dead, just mostly dead. Now obviously I believe if they make some changes they can recover, but I'm not sure they will.

What killed Microsoft?

I think there are a few macro market trends and their lack of response to the pressure have hurt them significantly:
1. The consumerization of IT/Tech by Apple, Google, etc.
2. Virtualization has (and continues to) marginalize the role of the OS in the stack.
3. The rise of Firefox (and AJAX, SOAP, HTML5, etc.) as a force in the browser market, practically killing ActiveX and IE's stranglehold(thank goodness!)

The biggest cultural problem I think Microsoft has that stops them from responding to these pressures and succeeding is one main thing:

They focus on the What instead of the Why.

Huh?
Look at every major product failure from Microsoft (the Zune, the Kin, Every windows tablet ever, etc.) and see what they all have in common, and probably still leaves Microsoft execs scratching their heads as to why they all failed miserably. They looked at the what, aka the features, and made a product that had those features.  I'm sure this discussion happened somewhere on Microsoft's campus:

"Since the iPad released, tablets are hot again. We need a 10 inch tablet that's thin with a long battery life. It needs two cameras too. And run Windows. It has to run Windows 7. Enterprises will love it! iPad is a toy for playing Angry Birds. Our new tablet will be the iPad for business!"
(BTW- I'm sure a similar conversation happened at RIM's headquarters as well. That's how we ended up with the nonsense that is the Playbook. RIM is a goner too.)

And that product will bomb, just like..every...windows...tablet...ever...sold. Why Apple keeps hitting home run after home run is Steve Job's unrelenting focus on the end user experience, and how that is carried out by the design teams in Cupertino.

"How would a user use this? What would they expect it to do? What would they want it to do? What would they love it to do that they don't know it's even possible?"

Aka, the Why. If Microsoft really understood why people liked the iPod or why they like the iPad and asked some of these types of questions, they might actually come up with a product that people actually want. Jobs said he realized quickly two things that had killed tablets before- the stylus and the convertible tablet w/keyboard (aka touchscreen laptop). The user experience was terrible.

And that key question of "what do they want that they don't know they want" is crucial. That's why focus groups are a waste of time and usually make mediocre products. I guarantee Microsoft uses a lot of focus groups. No focus group would have described the iPad before it existed. Why? People in general aren't very imaginative and think in terms of things they know.

I'm really interest to see what becomes of our friends in Redmond. Do they ever evolve? Or Do they end up as the Microsoft Office company?