Binary Diffusion

The following is a post from Frank X. Shaw, Corporate Vice President of Corporate Communications at Microsoft.


The digital world is binary. It’s a zero or a one, the switch is on or it’s off.

There are times when I think the industry dialogue is deeply influenced by this binary nature, and sometimes can be overly black and white. So often, in their rush to declare one era over and a new one begun, the pundits overlook the nuances that really matter in a world that isn’t as black-and-white as it might seem.

Seldom are there stark endings and new beginnings – it’s more likely an evolution from one phase to the next. I’m reminded of Malcolm Gladwell’s wonderful article a couple of years ago in The New Yorker, Creation Myth. In it, he traces the origins of the computer mouse from Doug Engelbart’s original concept in the mid-sixties, to Xerox PARC and then Apple. “If you lined up Engelbart’s mouse, Xerox’s mouse, and Apple’s mouse, you would not see the serial reproduction of an object. You would see the evolution of a concept.”

That’s why I especially enjoyed ars technica’s headline after our earnings report last Thursday: Microsoft fails to notice the death of the PC, posts record revenue figures instead. Sometimes, the facts get in the way of a good meme. In this case, despite the difficult PC environment overall, Windows revenue increased 11 percent year over year, thanks to volume licensing, retail and Surface sales.

We don’t discount the challenges – the strength of our competitors, the rise of mobile computing, questions around the company’s ability to sustain growth when PC sales are slow – and I’m sure there are a few more others might add. :)

But that view alone only represents one part of the picture. It isn’t black and white. There are more elements to the story of where Microsoft is today. What many are underestimating is the evolution of Microsoft to a devices and services company. This hasn’t happened overnight. It’s a strategic shift and a creative process that’s been underway for a number of years, and becoming more evident each day, including:

· Today’s news about the release of Skulls of the Shogun, a game from Seattle-based Indie developer 17-BIT that’s available on Windows 8 PCs, Microsoft Surface, Windows Phone 8 devices, and of course, Xbox 360. It’s an example of cross-device gameplay that’s never been done before.

· Yesterday’s introduction of Office 365 Home Premium, a re-invention of our flagship Office product used by more than 1 billion people as a cloud-based, subscription service. As Steve Ballmer said, this isn’t just another version of Office, “it’s Office reinvented as a consumer cloud service.”

· Last week’s announcement of Surface Windows 8 Pro, which provides the power and performance of a laptop in a tablet package and will run all Windows 8 applications as well as current Windows 7 desktop applications. Surface Pro goes on sales on Feb. 9.

· Bing’s announcement earlier this month of how it’s continuing to evolve search by making it a more effective decision engine, allowing you to tap into the wisdom of friends and experts in the social sidebar.

· Or even our news earlier this month about how Windows Embedded devices are transforming the retail experience, or how Microsoft technologies are helping transform the oil and gas industry.

Microsoft has strengths and experience with devices and services that span from the board room to the living room, encompassing work and play. That experience with consumers and businesses provides us a unique perspective – the kind of perspective that comes from not missing the big picture by looking at each industry innovation myopically.

That sense of perspective and big picture understanding was captured so well by former Microsoft executive Nathan Myhrvold in Gladwell’s New Yorker article.

“When you have a bunch of smart people with a broad enough charter, you will always get something good out of it. It’s one of the best investments you could make – but only if you chose to value it in terms of successes. If you chose to evaluate it in terms of how many times you failed, or times you could have succeeded but didn’t, then you are bound to be unhappy. Innovation is an unruly thing. There will be some ideas that don’t get caught in your cup. But that’s not what the game is about. The game is what you catch, not what you spill.”