Jenkins: Only Bill Gates Can Change Microsoft

August 27, 2013, 7:03 p.m. ET

Jenkins: Only Bill Gates Can Change Microsoft

The company needs to give up its Windows-era strategic obsessions.

HOLMAN W. JENKINS, JR.

Retirement was not the fate many customers likely would have chosen for Microsoft‘sMSFT -2.61% Steve Ballmer. Something unpleasant involving wolverines would have been more like it—especially if you were among the countless corporate foot soldiers recently required to upgrade an underpowered company-issued laptop to Windows 7 because of Microsoft’s withdrawal of support for its long-lived XP.It was once possible to gaze on Windows with admiration. The complexities it tackled on our behalf were awesome. It was churlish to complain about the occasional blue screen or long boot-up times.

But sometimes a reality only needs to be stated out loud: The joy of Android and AppleAAPL -2.86% devices lies not just in those devices themselves, but in the fact that they allow us to perform computing tasks without %^$# Windows.

Going forward into the post-Ballmer era, the problem for Microsoft is not that it stuck with Windows too long. Businesses live for such enduring, money-spinning franchises.

The problem is not that Microsoft didn’t beat Facebook, Google and Apple at their own games. Other capable and lucky entrepreneurs exist. To expect Microsoft to extend its dominance of personal computing into the era of ubiquitous computing is like expecting Ford to dominate auto making in the 2010s the way it did in the 1910s.

The real problem lies in how Microsoft stuck to Windows. Mr. Ballmer’s legacy for Microsoft is not just a stagnant stock price, but an increasingly exploitative attitude toward its core Windows user in pursuit of overwrought strategic quests (the ultimate source of the Windows 8 debacle).

The final fault, though, lies with Bill Gates, who salted his company with the “defend and extend” zero-sum paranoia that constitutes its central strategic impulse. Think back to the company’s Netscape panic, when Microsoft saw the browser as a mortal strategic threat and embroiled itself with a reciprocally purblind Justice Department. What did the Web really mean for Microsoft? It ended up giving the world a reason to buy a lot more Microsoft PCs.

Blaming Mr. Gates may be unfair. The zero-sum mentality (dressed up as talk of “network effects”) is a recurrent temptation of the entire tech sector. Witness today’s talk of winner-take-all mobile ecosystem wars, in which Microsoft is seen as doomed. Here’s what the world really looks like:

How many people (as your columnist does) use a Windows laptop to stock their Netflix queue or Amazon or HBOGo or YouTube watchlist—then use another device to direct the video to a screen? In your columnist’s household, we consume video on a Kindle, an iPhone, a PC, a MacBook, or using a Roku box, Xbox, Wii or a Panasonic smart TV. And delivering this video is a whole host of upstream router and server devices and software, in which undoubtedly Microsoft and many others have a piece.

This is the future. The zero-sum war of ecosystems is not coming. There will not be one ring to rule them all.

Seen this way, Mr. Ballmer’s reaction to the iPhone should have been to clap his hands in delight and dispatch his Microsofties to think up wonderful apps for the wonderful new device. And the last thing Microsoft needs now is his parting gift, a reorganization aimed at mimicking Apple just as Apple’s peculiar “functional” (rather than traditional corporate “divisional”) structure is making less and less sense for Apple.

The Ballmer “One Microsoft” plan, which apparently will proceed in his absence, is to produce a “family of devices and services for individuals and businesses.”

“Family” is the worrisome word. Microsoft doesn’t need a “devices and services” family. It needs to live in a “devices and services” world, snatching opportunities as it sees them.

Happily, there comes a moment when the solution to strategy-mania is not more strategy but corporate governance reform—a lesson that applies also to Apple but comes sadly too late for BlackBerry. Microsoft should take its still-gushing winnings from the desktop age and direct them to shareholders in the form of a big dividend hike. Let new investors take the risks of the next phase.

To the extent that Microsoft’s brainy engineers and intrinsic competitive strengths suggest promising new investments, undertake these via joint ventures and spinoffs with outsiders who will be eager to finance good ideas without being distracted by the Windows “defend and extend” monomania on which so much shareholder wealth has already been squandered.

But now we come to a final problem. For good reason Lou Gerstner’s name has been on every lip in the wake of Mr. Ballmer’s announcement. Mr. Gerstner saved IBMIBM -1.08% by making the ruthless decisions about what IBM would no longer do.

Microsoft cannot have a Lou Gerstner with a Bill Gates still on the premises. As long as Microsoft’s founder is around, only Mr. Gates will be able to inflict on Microsoft the change it needs.