'Next Sea Change is on Us,' Gates Warns MS Honchos

11 November 2005

Microsoft chairman, Bill Gates, normally resident on the summit of Mount Olympus, took time out last month to warn his earthly acolytes that the "Next Sea Change is on Us".

Gates switches to Cassandra mode on an irregular cycle. In 1995 he warned that there could, just could, be a future for Microsoft in some fancy new gizmo called ... um ... 'The Internet'.

And again in 2002, after years of fencesitting he warned of the need to bolster Microsoft products' fragile defenses against online security incursions.

Now, in the declining days of 2005, the globe's richest man has awoken to the fact that the likes of Google and Apple have eroded Microsoft's once invulnerable position as frontrunner in the cyber-stakes.

In a memo dated October 30 (but leaked only yesterday), Gates warned his senior lieutenants of the threat from "disruptive" new internet services launched by "competitors who will seize on these approaches and challenge us".

MS troops, Gates exhorted, must counter-attack and "deliver experiences and solutions across the entire range of digital work-style and digital lifestyle scenarios." Company leaders, he ordered, must "act quickly and decisively."

But Ray Ozzie, one of a trio of Microsoft chief technical officers, acknowledges that HailStorm, a similar directive from on high a few years back, sputtered into oblivion.

Nevertheless, he dutifully delivered the rah-rah. "Regardless of past aspirations, this is the right time to be focusing on services for two specific reasons: the increasing ubiquity of broadband has made it viable, and the proven economics of the advertising model has made it profitable," Ozzie hyped.

Consultant Chris Pirillo of Lockergnome.com was rather more succinct: "The bigger picture for Microsoft," he said, "boils down to two words: beat Google."

Data sourced from USA Today Online; additional content by WARC staff