Microsoft Is Becoming Another Cisco

Does Microsoft innovate anymore? Has inspiration fled from Microsoft since Bill Gates stepped out to become a philanthropist? Microsoft's strategy has slowly digressed into a me-too / copy cat and product acquisition corporate strategy. It sounds all too familiar - Cisco has already perfected it.

If you know anything about Cisco besides their market dominance, it's that most of Cisco's innovation comes through acquisition, and Cisco is an acquisition and assimilation machine. Whether it's been intentional or not, Microsoft has taken a page right out of Cisco's book. But, Microsoft has many more formative competitors for fend off, namely Google. And the software competitive landscape can change much more rapidly than it typically does in hardware-locked industries.

Microsoft's core has always been the operating system and desktop applications. Over time Microsoft's expanded this core to include the server operating system, email server and client, SQL database server, and web server technologies. Though not invented by Microsoft, those were all innovations Bill Gates helped bring into the fold, which Microsoft embraced and made their own.

Today, so many more of Microsoft's products are in response to competitive threats, external innovations or markets Microsoft simply doesn't want to be left out of. The examples seem almost countless.

Live Search and Desktop Search, Google copies. Microsoft Virtual Server, a response to competitive VMware and XenSource products. Zune mp3 player, a poor Apple iPod copy. Windows Live Writer, there are many others. Live Search Maps, a copy of Google Maps and MapQuest. Office Live, a response to Google Docs. Office Groove, a Lotus Notes killer with P2P document sharing added in. Those are but a few examples.

Microsoft has also acquired many of it's technology and product innovations, including; Softricity application virtualization, Groove collaboration software, aQuantive and ScreenTonic and advertising, Whale Communications SSL-VPN, Giant and Sybari anti-virus software, and Connectix Virtual Server and Virtual PC software, to name just a few. Check out this wikipedia page to see the full list of Microsoft acquisitions. You might notice a big up tick in acquisitions during 2005, 2006 and 2007.

In October, Microsoft CEO Steve Ballmer proclaimed, well more braggingly stated, Microsoft would acquire 20 companies, ranging from $50M to $1B, over the next year. This was Microsoft weighing in on a game of acquisition-testosterone between Google, Yahoo, Oracle, Microsoft and others.

And lets face it, recent product releases such as Vista have fallen short of impressing the marketplace with Microsoft innovations. There's been more of a backlash because of the lack of new useful capabilities for Vista end users.

Is Microsoft becoming slow and bloated? Is the acquisition-over-innovation strategy creating a company that can't deliver reliable software the market wants? Is Microsoft destined to become a me-too behemoth rather than the kind of market leader we used to know?

Google is still a very strong innovator. If Microsoft looses the innovation gene, it plays right into Google's hands. I never thought I'd come to this, but it may be time to start calling for Bill Gates' return. Do it before Microsoft becomes a company we can no longer distinguish from the acquisition dynamo Cisco. Do it before Microsoft hands the key to the city over to Google.

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