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Imagine you’re Steve Ballmer, thinking about basketball.

In basketball, teams that hold a big lead wisely but boringly choose to run out the clock. They score no points themselves, but minimize the risk of making mistakes that would allow their opponent to score.

That works for basketball, where each game is self-contained. In the long run it’s a losing ploy for a business, because the clock a business must run out is of infinite duration.

It’s fair to say that Microsoft spent years running out the clock: What passed for new features in Windows was plugging leaks, and what passed for new features in MS Office was … was … sorry, I’m drawing a blank.

You’re Steve Ballmer and you decide you can sell a lot more product when new versions cause excitement, rather than ennui or trepidation.

The design decisions that might cause excitement also might cause avoidance, though — serious product innovation entails serious risks.

Which means your first step just might be to recognize that avoiding risk has become riskier than taking some. And so …

Microsoft already took the first step by moving its MS Office file formats to XML. Even with the complaints about Open XML’s poor documentation, any XML-based format will be easier to reverse-engineer than the old .doc, .xls and .ppt formats.

That means MS Office will, in a near-inevitable future, have to compete on features and functionality.

Which in turn explains the Ribbon. It is, while detestable in so many ways, a radical change.

Not all risks pay off, after all. That’s why it’s called “risk” and not “sure thing.” Whatever else the Ribbon represents, it was the opposite of running out the clock.

What’s next? Here’s a radical possibility: MS Office for Linux.

Most important change begins with culture change. If you’re Steve Ballmer and want to re-shape Microsoft’s corporate culture, driving everyone to create products customers want to buy instead of products customers are dragged into buying just to avoid obsolescence, you need to blow up the old product strategy of market dominance through the reciprocal lock-in of MS Office and Windows.

If MS Office ran on everything, Windows would have to stand on its own.

MS Office for Linux isn’t as far-fetched as it might seem. Microsoft already sells MS Office for OS X, after all. If it didn’t, Mac sales would plummet.

What would make Linux a stretch isn’t the damage to Windows sales. It’s the challenge of supporting all of those semi-incompatible distros.

Which would, if you were Steve Ballmer, lead you down one of two paths: Either build next-generation Windows as a services layer wrapped around a Linux core, or build it using the current hypervisor-as-OS buzz as the starting point.

Windows on Linux is philosophically no different from OS X, which is built on top of BSD Unix. The effort would be difficult, but predictable.

If you’ve missed the VMWare-press-release-driven articles on the hypervisor as operating system, the story goes like this: The full-featured OS is passe. Future computers will use a paper-thin hypervisor on which applications run directly, accompanied by only those services they really need.

It’s male bovine excreta (MBE). Ignore it.

There’s a reason modern desktop OSs are as bulky as they are: They do a lot.

Early desktop OSs did little more than provide a limited level of hardware abstraction. Windows, OS X and the various desktop Linux distros abstract, in addition, printers, fonts, and networks.

In other words, they provide centralized shared services. Applications built for a hypervisor architecture will be thicker. Presumably, few customers will want to buy (for example) a word processor that manages an independent collection of fonts that aren’t available to any other application; need their own collection of unique printer drivers; and take control of the network interface when they need to communicate with other systems.

Which brings up the real subject of this week’s column (at last!): The parallel between the hypervisor vs traditional OS “debate” and the perennial organizational question in business management: Centralization vs decentralization.

Centralized businesses are the traditional OS. They make extensive use of shared services (Accounting, Human Resources, and IT) rather than having the business units (applications) run their own. This allows each business unit to be skinnier than it otherwise would be. It’s how companies create economies of scale.

Decentralized businesses resemble the hypervisor-as-OS architecture, except there’s a compelling case to be made for decentralization.

Sadly, we don’t have the time and space to explore it this week. Maybe next week, if I don’t get distracted.

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|In: Industry Commentary|Last Updated:

Decades ago, Banana Republic was a mail order outfitter with a very cool catalog. It had lots of khaki; hats suitable for jungles and deserts; battered leather pouches, web belts and multi-pocketed vests for carrying the bits and pieces of paraphernalia you’d be likely to need when visiting snake or scorpion-infested territory; and the paraphernalia itself.

Somewhere along the way that formula stopped working, and Banana Republic turned itself into Just Another Clothing Store. It’s been successful, so from the perspective of fiduciary responsibilities to shareholders, it Did The Right Thing. But from the perspective of What’s The Point? Well, that’s the question, isn’t it?

There comes a time in the history of most companies when the old model stops working. Too often, the choices seem to be either vanishing from the landscape or, like Banana Republic, becoming a generic, personality-free enterprise.

When personal computers first burst onto the corporate scene, all of the players … and that includes Microsoft, but also Apple, Digital Research, Software Arts, Micro Pro, Novell, and Don Estridge’s PC division at IBM … were, at heart, revolutionaries.

They supported, not corporate America, but subversives inside corporate America — end-user-department innovators who needed to automate workgroup processes, model alternative business scenarios, or to otherwise solve small-scale challenges quickly, without going through the swimming-through-molasses procedures required by the corporation to get IT support.

The result was an outpouring of creativity that dramatically changed how businesses operate. For those readers too young to have lived through the transition, here’s just one of the changes, to serve as a proxy for all the rest: Before the PC, every manager had a personal secretary. Post-PC, many managers wouldn’t even know how to keep a secretary busy.

While Microsoft took a bare-knuckled approach to competitors, it kept sight of who its customer was — the individual corporate cost-center manager and end-user, not IT. That its operating system didn’t lend itself to central control, and its design was indifferent to security was not accidental. Corporate IT cares about control and security. End-users care about getting things done quickly, without bureaucratic overhead.

And then, somewhere along the way, the world changed and corporate IT became the customer. Microsoft adapted and thrived, but in much the way Banana Republic adapted and thrived — by forgetting what it was.

In microcosm: End-users wanted .bat files, interpreted BASIC and a macro “language” that wasn’t much more than a glorified keystroke automator. Corporate IT wanted standardization, restriction of administrative rights, and enough limitations on what end-users could do to assure the security of corporate information assets.

That was the end of .bat files and interpreted BASIC, while macro languages gave way to Visual Basic for Applications — a language learnable only by those who understand the philosophy of designing and coding software objects.

This is what is sad about some forms of success: Whether the subject is the personal computer industry, the Internet, Linux, or the Olympic games, it seems to drain the charm out of just about any business that achieves it.

And, there are times success results in abandoning a small but still-very-real market. The PC is, we’re told so often it has become tiresome, a business computer and not really a “personal” one. Which leaves open the question of who is going to serve the customers who used to look to Microsoft and the other small systems companies.

It won’t be Apple. Apple makes cool technology; not end-user-programmable technology. It probably won’t be the open source movement either. Those adept enough with technology to create open source solutions aren’t, for the most part, interested in creating tools simple and prosaic enough for average end-users.

The best candidate right now is (of course) Google. Its provides applications with novel capabilities, and because it delivers them via the browser, IT will have a hard time keeping them out of the enterprise.

In the meantime, Bill Gates has left the game, to devote his attention to the Bill and Melinda Gates Foundation. The Foundation is genuinely admirable, both in its goals and its execution (and has redeemed Mrs. Gates from having been the force behind Microsoft Bob).

Except … is anyone else concerned about what the Bill and Melinda Gates Foundation might turn into once Mr. and Mrs. Gates are gone? It’s an organization with a budget rivaling that of some governments, with no public governance or oversight.

I’m not entirely sure that in the long run this will prove to be an entirely good idea.

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