Tuesday, October 28, 2008

The art of creative destruction

Creative destruction - there is no better phrase in all of management or for that matter mankind's progress.  Joseph Schumpeter, a famous Austrian economist coined this term to represent the only sure shot strategy for firms to be successful in the long-term.  Various versions of this strategy have been made popular in management folklore by later year gurus, but Schumpeter's legacy remains.

Creative destruction essentially says that continued progress can only be made by destroying works and creating what works better. In this argument, lies the inherent tradeoff between exploitation versus exploration.  Creative destruction is the hallmark for mankind's progress.  However, the sheer uncertainties involved in managing an organizational setting that seeks to pursue this strategy makes it difficult for firms to be successful at every decision node. However, one would expect that by imagining the impossible and by working towards it at least some times firms should be able to exploit the benfits of creative destruction.

But, not with Microsoft, arguably the most successful firm in the software industry.

Microsoft, it seems loves Windows and cannot exist without it.  It is a cash cow and will be so for quite a while.  Yesterday, Microsoft announced its plans for a new brave OS called Azure that would supposedly exploit the power of the network and the desktop. I guess they have been sleeping for over a decade now and are late to the party.  Given that many other firms have been making giant headways into cloud computing, Microsoft wants to crash into the party.  Well, before we give credit to Microsoft for being creative we also need to realize that Windows will still remain the primary platform for this new foray into the web.  What a pity - Schumpeter must be turnign in his grave.

Microsoft does not underatand creative destruction.  It is obsessed with the Windows desktop OS.  A few days ago, I had blogged about smart. small devices and how Linux is becoming the default OS for such devices.  A new internet that leverages the power of cloud computing obviates the need for super smart end-user devices. Although, users are indeed free to use such devices, increasingly efficiencies are becomign clear in the network centric model fo computing.  Microsoft, apparebtly does not get the message.

Additionally, there is something called product preannouncements in software lingo, and Microsoft is notorious for such predatory behavior.  Sometimes these announcements are made with vaporware products (those that don't exist in the pipeline), with no intention of ever launching them. The announcements are merely signlas to competition to stay off the turf. I am not sure to what extent this is happenign with Azure, but it is clear that it has to be someone other than Microsoft to create better things in the computing world.

Till then, I will toil away at my numerous Windows machines and work on my Ubuntu-powered laptop whenever I need a break.

1 comment:

sbobet said...

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