Recently I wrote about ten things Microsoft doesn’t get enough credit for. Today I want to point out ten opportunities that they missed, things I was there for. I’m avoiding anything that is not public knowledge, of course.

I’m not suggesting they should have jumped on all of these; it might not have been an economically sound decision to do so. However, I think it’s instructive, when folks examine that giant of a company, to think about why even a good company can’t see — or do — everything.

1. Cloud-based Office apps such as Google Docs. As I noted in a post last year, Microsoft invented this in early 1999. I was part of that, but we couldn’t figure out any way that the Office team would be interested or see it as other than a distraction. In retrospect, I still don’t, and it’s an area they can still take the lead in if they really decide the time has come… but still, Microsoft thought of it first.
2. BizTalk Server a decade ago was the best product no one had heard of. It was the Rosetta Stone for disparate data systems. Microsoft could have gotten into a whole lot of data centers translating between, say, IBM and Oracle, which would have positioned them for other sales. BizTalk was actually a pretty cool and descriptive name, but it didn’t fit with any of the other naming conventions. (On the other hand, BizTalk Orchestration — a/k/a workflow — wasn’t quite as succinct.) Eventually, those other products got sufficiently better to obviate the need for a separate product such as BizTalk, but there was a big window for Microsoft to improve their penetration into big data centers.
3. Flash. I don’t know why the leaders of the Windows team didn’t see Flash as a threat ten years ago.
4. The iPod. Microsoft had all the pieces in place a year before the iPod came out, but couldn’t figure out whether it wanted to sell hardware or try to get vendors to improve the quality and usability of their MP3 products. That said, I never heard even a whisper of something like the iTunes store, which was a big key to Apple’s success.
5. The iPad. People I respect at Microsoft keep telling me that no one wants a phone large enough to also do computer-type work on. As I say, I respect them, many of whom are in the Mobile business, but I respectfully disagree with them. (So does Steve Jobs, apparently.) Context is all. I believe the desire for a single connected device outweighs the size issue. Look at netbooks. If you’re already carrying a laptop, why carry a phone too? Microsoft had the core idea a dozen years ago and a VP assigned to drive it (see the note on Dick Brass below).
6. Firefox – a/k/a continued progress with Internet Explorer. Now this one gets very confused in the practical world by the pressure from the US Department of Justice and the European Union, but Microsoft pretty much put aside advancement of Internet Explorer once they had the majority market share — something they certainly didn’t do with Office or Project or Windows, for example. They had a great team working on IE4 and IE5 and then let it get away from them. I’m not sure this was a bad decision, by the way, since IE wasn’t bringing in revenue or advancing other corporate objectives at that point. Still, when Steve Ballmer chants “Developers, Developers, Developers,” a lot of those developers were turned off by Microsoft letting IE slide.
7. Windows Mobile. Was it a consumer O/S? No. Was it a competitor to BlackBerry? No, at least not for many versions. It was never clear to me what it was supposed to be, but it missed both of those core markets. And early versions simply weren’t up to snuff as a phone. Also, they never promoted an Apps Store — except internally, on a site many employees loved. That site, by the way, was named better than many external products: WMStuff (Windows Mobile was always WM internally).
8. The sense of mission. Google made big waves with Don’t Be Evil. Microsoft had a similar sense of mission, especially back when Bill Gates was CEO. It’s to Bill’s credit that he never used PR from his foundation’s work to directly bolster Microsoft. The company felt in the 90s like we were on a mission to make the world a better place through technology, and somehow we never communicated that. I also think this sense of mission has diminished this century, as I noted in a previous post.
9. The IE “Wonderful World” ad. This was, I believe, the second-best industry ad (after Apple’s “1984“) until the I’m-a-Mac/I’m-a-PC ads — and amazingly I cannot locate a single copy of it on line. It ran, as I recall, in late 1994 or early 1995. Microsoft advertising had a chance to take a terrific new direction… but slowly reverted back to the old way. Of course, I can’t argue that Microsoft hasn’t been successful with the old way, despite the inroads Apple has made in a few areas. Still, more of these ads might have changed public perception of Microsoft significantly and for the better. And with better ads, maybe sleeker packaging would have followed.
10. People. Microsoft has allowed some amazing people to get away because it couldn’t figure out how to use them effectively or give them appropriate challenges. Of course, Microsoft isn’t alone in this; many companies have the same problem. But for a company that believed people were its most important asset, those losses represent missed opportunities.

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Finally, I have to note Dick Brass’s much-talked-about piece in the NYTimes last week [free registration required].

First, this post and the two preceding posts about Microsoft were largely written before I read Dick’s OpEd; that said, I do think his observations are accurate at least in respect to the areas I was most aware of. I recommend you read the article itself rather than the various “takes” on it that have been floating about the Internet; it’s reasoned and specific, unlike most of what’s been said about it.

Second, my impression of Dick is that he’s very thoughtful and easy to work with; if he hit organizational barriers, it isn’t because he blundered into them with a bad attitude. I had a number of interesting conversations with him over the years, including one that I’ve written about in the past, where he showed me a wooden mockup of “the future of reading.” See my tenth bullet above; Dick Brass was certainly one of those folks.

Finally, what really matters will be Microsoft’s response to Dick’s challenge to be a better organization. Microsoft, like most companies, tends to get a bit defensive and insular when prodded from the outside, such as their awkward response to the iLoo, a supposed Internet-equipped portable toilet. Whatever face they show to the world here, it may or may not parallel the discussion now assuredly going on furiously within the Microsoft ranks. I hope Microsoft will respond positively internally, figuring out how their teams can be more supportive of each other. There are so many really good people there with so many good ideas, some of which — though we don’t know yet which ones — will change the industry and change the worlde.

Yesterday I went through part 1 of a list of ten things I think Microsoft has done right. Some of these are major, industry- or world-changing items. Others are smaller but overlooked contributions that deserve to be recognized. All of it is my opinion; there’s no scientific method in play.

Yesterday’s list included

1. Driving down the cost of computer systems.
2. Standardization.
3. Universal plug-and-play.
4. The feature-rich stability of the Office suite.
5. It’s mission to change the world through technology.

See yesterday’s post for the details.

Here are the rest of the items on my list.

6. Inventing the idea of mass-market paid software.

Famously, the idea that people should pay for software effectively started with a letter Bill Gates wrote to the Homebrew Computing Club in 1976. (Click that link for the backstory, or this one to read the letter.)

It set off a bit of an uproar, to say the least. Still, it set the idea that software took work, and that intellectual property was real work that should be paid for.

Of course, there are those who agree not to seek monetary compensation from users, the core Linux team being the most prominent example. And there were those who promulgated the try-it-and-pay-if-you-like-it ShareWare model; I was proud to be associated with a couple of the ShareWare pioneers. But Bill’s point was that the choice should be up to the creators, not the users.

I pay for the music I listen to. I pay for the software I use. (I also have a certain amount of free music and software where the creators have chosen to make it available without charge.)

Micro-soft added an immense amount to the conversation when Bill said, it’s not cool to steal stuff. Micro-soft of course also gained serious revenue… though they lost the hyphen in their name.

More importantly, the idea of pay-for-software jumpstarted the software industry.

7. DHTML, the foundation of today’s web apps.

Dynamic HTML, or DHTML, is what allows today’s rich browser apps, from Google Docs to the annoying WordPress editor in which I’m writing this post to Google and Bing maps and Bing’s image search.

Web pages used to be static. Filling in a form was pretty much the highlight of the page. But in the late 1990s, Microsoft and Netscape were engaged in a war over who could build the more useful browser. Both had the concept of a more flexible system, but it was Microsoft’s version that won out. People who worked on the team tell me it was technically better, though the Department of Justice thought there were other reasons IE beat Netscape. Whatever the story, DHTML became the standard that enables today’s terrific and interactive “cloud” apps.

8. Responses to 9/11, Katrina, and Bosnian refugees.

Lots of companies helped out in these crises, and few of them, Microsoft included, tried to earn publicity points for their work. That’s to the credit of all of them.

They should all be recognized. But since I’m talking about and most familiar with Microsoft’s responses here, I want to recognize Microsoft for their work.

For the record, they helped businesses get back on line quickly after 9/11, they built a system to track and reunite the scattered refugees of Katrina (no, not the New Orleans Saints, the real refugees), and they created a vast database and in-the-field to identify and reunite families fleeing Bosnia, few of whom carried ID or even escaped together. All of these were employees-on-their-own we-need-to-do-this initiatives, not corporate suggestions.

9. Trying to help presenters improve.

Few realize the contributions made by designers Nancy Duarte and Julie Terberg to improving the actual presentations people build using PowerPoint.

PowerPoint is a wonderful tool, but it also makes it easy for lazy presenters to develop really, really bad slides. Duarte and Terberg have created templates that can help — and I hope their work will stimulate presenters to get off their duff and scrap the bullet points. If you are a presenter, please, please click on those links, read them, and then track down the PPT work they point to. (I also salute Garr Reynolds and Cliff Atkinson for their work, but it wasn’t done within Microsoft and thus doesn’t fit this post.)

I don’t think it’s PowerPoint’s fault for all the horrid presentations we sit through… though I do wish PowerPoint didn’t make bullet points the default slide after the title page. Duarte and Terberg have created templates that can really help even bad presenters give bearable presentations — just don’t muck them up with bullet points! (In other words, if you want slide notes so you’ll remember what you intended to say, write them on 3×5 note cards rather than on the screen.)

10. Encouraging employee charitable donations.

Microsoft matches dollar for dollar up to $12,000/year (in the US; varies in other countries, I think) in employee charitable donations. Nowadays, most high-tech companies do this, but Microsoft was a leader in the 80s and 90s. They also match the hours employees donate with money, where I think they were the first big company to do this.

Each year, Microsoft has one of the largest percentages of employees — maybe the largest — who donate and ask Microsoft to match. That’s not visible in a big way outside Microsoft, except to the foundation community, because Microsoft doesn’t publicize it to the general public.

But those contributions make a huge difference in the lives of others. Most Microsoft employees understand this, and recognize that they’re in a somewhat privileged position — especially in this economy.

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Later this week, the opposite side of this post: ten opportunities Microsoft had in its hands… and dropped.

I left Microsoft just over a year ago. Looking back, three things in particular strike me.

• There are good substitutes for much of the Microsoft software I use. Other Microsoft products, however, I find indispensable. I wrote about this in a series of posts a few months ago.
• Microsoft has missed opportunities that were right in their hands, which I’ll discuss in a future post.
• Microsoft does or has done a lot of things right that they get little credit for.

The last item is the subject of this post and tomorrow’s post. As background, I was there 17 years and rose to a fairly senior leadership position. I managed groups/departments in IT, in product groups, in Legal operations, and in Services (Consulting and Support).

Here are ten things that Microsoft has done right. Some of these are major, industry- or world-changing items. Others are smaller but overlooked contributions that deserve to be recognized. All of it is my opinion; there’s no scientific method in play.

I’ve divided the list into two separate posts because of length.

1. Driving down the cost of computer systems.

In 1986, I bought a new computer, a “386″ so-called desktop that would fit only under my desk. I added a 5 MB (that’s megabyte!) external hard drive, external 1200-baud modem (think slowwwwww!), and a monochrome monitor. It cost me around $3000, which is about $6K in today’s dollars — and I was able to get that price by buying mail-order from a small system builder in the midwest. It would have cost me $4K locally.

Contrast that to my current laptop, bought a year ago for $400, with 2GB memory, a 16GB hard drive, DVD burner built-in. Add $159 for the big HP external monitor I sometimes use with it, plus a few bucks for an external mouse and keyboard, and I have a system incomprehensibly more powerful for less than one-tenth the cost in constant dollars.

20 years ago, every manufacturer was trying to do something different, something to stand out. In addition, there was little computer penetration into mainstream markets, so there was no commodity price pressure to drive costs down.

Windows 3.0 changed everything.

I’ve written before about that day at PC-Expo where every hardware manufacturer wanted something colorful on their monitors and wound up running Windows Solitaire. (I don’t recall if Apple had a booth, but they clearly would have been the one computer equipment maker not running Windows!) From that muggy June day forward, commoditization became the name of the game.

And with commoditization came standardization (see the next two items) and huge downward price pressure.

Would we have $400 laptops without Microsoft? Perhaps… but I don’t see Apple making $400 laptops.

History isn’t about what might have happened, but what did happen. And what did happen was that Microsoft made computing power available to a billion people by forcing standardization. Sure, they made a ton of money doing so, but the value returned to the overall US and world economy is stupendous compared to their take for doing so.

2. Standardization.

I moved to Seattle in 1988 to become Development Manager of Quicksoft, which made the then-#3 word processor PC-Write. The woman in the next office spent virtually all her time writing printer drivers, so that we could print something other than plain text on them. We had an entire room filled with printers, including one monster from IBM it took two strong people to lift. Every one of those printers required a separate driver, with different methods for printing bold text, justifying (right-aligning) margins, and so on.

We must have had 100 different printer drivers, all of which had to be maintained and tested.

And every time a new printer came on the market, the woman next door had to scramble to get a new driver together and make it available to customers.

No more. Now printing in Windows is trivial. You make it work once, and you know that it will print properly no matter what kind of printer the customer has. It’s not just printers, either. Mice and keyboards. Monitors. External drives. Internal hard drives. Standardization is why the PC ecosystem is so rich with choices. I’ve got a Dell desktop with an HP big monitor plus a no-name 17″ monitor, a Microsoft keyboard, a Logitech mouse, a Maxtor external Firewire drive, a who-knows-what DVD writer, an external USB 2.0 portable drive, M-Audio speakers, and so on. Everything just worked when I plugged it in (see below). We take it for granted today, but 20 years ago, it was a dream.

There’s one part of this item Microsoft can’t take credit for. I married the woman in the next office!

3. Universal Plug and Play.

Universal Plug and Play, UPnP or just PnP these days, is the feature that allows you to take pretty much any piece of computer hardware made in the past six years, plug it into your computer, and have the computer recognize it and start using it.

Microsoft was the driving force between what has now become an industry standard, used by Apple, Linux, and other systems as well as Windows.

Sure, those of us there at the beginning remember when it was derided as Plug and Pray. There’s no doubt it didn’t work all that well at first. There were just too many systems that didn’t implement the protocols of UPnP, or got them slightly wrong. But persistence won out, and persistence has always been one of Microsoft’s strengths (and occasional weakness, with Office touting Mr. Clippy long past his sell-by date).

In the last week, I’ve plugged the following for the first time into my laptop, and everything has just worked: Three different flash drives to exchange information; two different travel mice; two cameras; a remote device for advancing PowerPoint slides. Nowadays, we’re surprised and put out when UPnP doesn’t work.

4. The feature-rich stability of the Office suite.

I wrote a 364-page book, with over 150 embedded graphics, in Word without a single crash or corruption of data. For grins, I tried to load it in Open Office and Google Docs. Both were able to read it, but neither could handle the complexity properly.

The core apps of the Office Suite — Word, PowerPoint, and Excel — are robust, powerful, feature-rich, and stable. Microsoft simply doesn’t get enough credit here.

Now not everyone needs every feature of these apps… though I daresay I’ve used pretty much every feature in Word and PowerPoint in the past year, including the ray-tracing (object “lighting effects”) in PowerPoint and Word’s regrettably overlooked Document Map.

But back when I was sitting in on meetings with Legal-world CIOs (in 2004-ish) talking about what features they wanted in what became Word 2007, I was struck by how often the following exchange took place:

CIO #1: Feature X takes up space. No one ever uses it.

CIO #2: Wait a minute. We use it all the time.

Few people use every feature, but every feature has a core group of users who rely on it. Your “too complicated” is someone else’s “I need that.”

The amazing thing to me is not just the vast feature universe but the stability of Word, Excel, and PowerPoint no matter what people try to do to it. They’re not completely bulletproof, but unless you go out of your way to create a malformed document, it’s pretty hard for most people to feed them anything that upsets their stomachs.

And if you need one of those three apps to do something, chances are it can do it.

Observant readers will note that I have omitted one app that’s often part of the Office Suite: Outlook. I didn’t claim the suite was perfect….

5. Microsoft’s mission through the late 1990s.

Microsoft had a long-time mission to change the world through technology. Indeed, was there ever a mission statement with the clarity of “A computer on every desk and every office, running Microsoft software”?

That wasn’t a sales mission, either, though it certainly served that purpose. There were tens of thousands of people at Microsoft who saw that as a change-the-world mission, to bring affordable, feature-rich computing to everyone around the world — while making money, of course. They didn’t fully succeed, especially in third-world rural communities, but they tried hard and made incredible inroads. In the first and most of the second world, we now take computers for granted as an affordable and omnipresent if occasionally frustrating appliance.

I do feel that about eight to ten years ago, the mission changed. I’m not talking about the mission statement, though that changed to. In some ways, the mission statement was even more pointed toward the common good — “helping people and businesses throughout the world reach their full potential.” (I’ve quoted both of these from memory, so they may be off by a word or two — but it’s a reminder of how clear they were to employees.) But while the mission statement was good, I don’t think the focus remained the same. People at Microsoft — and this was an ongoing internal conversation — debated the causes, which I don’t want to take up here, but I know I was not alone in feeling that change.

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Tomorrow, the other five reasons.