Would You Call Microsoft an Innovator? Join the Debate.

The Wall Street Journal Online has a great debate conducted via email between Robert Scoble (who writes Scobleizer) and Dave Winer (who writes Scripting News). The debate is whether or not MS innovates any more; Dave says no, Robert says yes. It’s a great read, and you should definitely check it out.

I have a few comments on this that I’d like to share.

Overall, I agree with Winer: MS doesn’t innovate in the larger sense of the word anymore. He says that MS has always been one to watch emerging markets, wait for others to spend millions to validate the market and cross the chasm, then swoop in and let their massive financial reach flay competitors out of the space. Much the stuff they’ve “innovated” insofar as the mainstream markets are concerned has been copied, stolen or done via acquisition. These things are then brought to prominence through MS’ amazing ability to financially parlay ideas into hugely popular products, stuff that reasonates with large markets.

And you know what? That’s fine, but it isn’t working anymore.

Today, I see quite a bit of “me too-ism” coming from Microsoft, and it’s because they either are playing the same “wait and see and conquer” game they have in the past, or they’re simply the new IBM (as Winer contends) and can no longer envision their own demise. They have the foolish swagger of entrenchment, as if there’s no chance they can be really, truly unseated. And, as Winer notes, they have lost the ability to empathize with the user, which used to be their strength. Today, I think they feel they can dictate technology, design, and usage metaphors at a whim because, hey, they own the market. What are users going to do, go somewhere else? Pshaw.

I cite three recent examples of MS chasing the taillights of others but, suddenly, not finding the clean-up job so easy: search, digital music players and gaming consoles. Foremost, Google owns the search space and Live will never catch up, even if Live might have a nuance or two better than Google (Scoble mentions mobile search).

Apple owns the digital music player space, and the Zune just has no — I mean zero — chance to make a run at it.

The most hopeful prospect of these recent three is the console market, where Xbox is making a serious play for leadership against Sony. The Xbox 360 is a hell of a machine (I have one myself), and the experience is awesome. MS is no longer bleeding on every 360 sold, and the attach rate is strong. But the PS2 kicked all sorts of ass, an the PS3, despite a launch with some hardware issues and only one good title, absolutely cannot be counted out. Neither can the Wii, which could mark a resurgence for Nintendo due to its fresh and innovative (there’s that word again!) controller and gameplay.

All three of these are huge, huge markets and MS now finds itself behind other giants and kicking them around isn’t proving so easy.

Now Scoble, on the other hand, contends that MS has innovated, and cites things like ClearType and improved IE error messages that make the Internet more human. More currently, MS Vista is closing the massive OS gap between Windows and OSX through innovations of its own, like allowing users to use a flash-drive to increase available system RAM. Neat stuff, but is it really innovation?

Scoble has good points, and he certainly has insight into MS engineering teams and corporate culture than does most anyone. But the things he cites aren’t innovation in the eyes of the larger market. Even when he cites Halo, the killer app title for the original Xbox, as MS innovation, Winer points out that Bungie Studios actually developed the Halo concept before being acquired by MS. So really, Halo is more of the same from MS, although I do feel that acquisition is a valid route to innovation in some cases.

I think what MS does well is what I’m going to call idiomatic innovation, or the ability to continually innovate and refine products in technologies within already-established compartments. I’ve used Office 2007, and it kicks all sorts of ass from here ’til Sunday. But are people going to go “OMG, did you see the new Office? I, like, have to have it man!” No.

Once people begin to use it, will they appreciate the new ribbon interface, and how easy it is to do things that were hard in Office 2003? Yes. Very much so. I love Office 2007.

But it’s evolutionary, not revolutionary. Innovation is almost always revolutionary, almost always disruptive. You can’t just keep buffing the same old stones and hope one day it’s not a stone anymore.

Final thought, and then I’d love to hear your comments: Winer makes an interesting point about how innovative companies innovate, grow, and then tend to lock their users in, either intentionally or not. Then, a few smart users, sick of feeling locked in, come and unseat the companies, which spawns new innovations and a new raft of innovative companies. Then the cycle repeats.  Individuals drive innovation, which might explain why huge, stodgy companies like MS that struggle under the own weight can’t innovate in the new market sense of the idea.  They can commercialize, as Winer notes, but not innovate.

When a company that was once innovative becomes big, heavy, and successful, can it deal with the brash individualism that innovators have, that new markets require?  History says no.