Microsoft as Agile, but not Enterprise Agile

Microsoft is a dominant player in IT. But is it agile? Does it display enterprise agility?

Organization

Microsoft has gone through some re-orgs in the period we’ll look at. The most recent re-org created 5 engineering groups and a bunch of non-engineering groups. Those engineering groups are largely responsible for themselves are are:

  1. Operating Systems (Windows)
  2. Cloud & Enterprise (Visual Studio)
  3. Applications & Services (Office)
  4. Devices & Studios (x-box)
  5. Dynamics (ERP)

Each of these has done a very good job competing in their respective markets. The x-box has given the PlayStation a run for it’s money. Visual Studio tends to defeat eclipse when put to the test. Office is king in productivity software. As for operating systems, Windows is still getting by with something like 90% of the market.

Microsoft tends to win in every market in which it decides to compete. Within each market, Microsoft tends to display agility. However, there are shortcomings. When we take a broader view of the entire organization, it falls far short of the type of enterprise agility we saw with Apple.

Operating System Inventory

To start, we’ll consider Microsoft’s flagship product; Windows. As previously stated, Microsoft has about 90% of the consumer operating system market. Despite that dominance, Microsoft has clear indications of not being agile in the market. To understand, let’s look at a picture with data provided by net applications as of March 2015.

This is a pie chart of the current market share of each version of Windows according to how many years ago it was released.

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What’s clear, is that every 2~6 years Microsoft releases a new version of Windows. Operating systems are a complex product, so perhaps this is the shortest sustainable pace. If that’s true, then the Windows team is doing an alright job at iterating and releasing new software.

What’s the problem?

The two most popular versions of Windows are 6 and 14 years old.

Does that mean that the more modern Windows operating systems are lousy? Not at all. What it does tell us is that the more recent Windows products aren’t solving problems that people care about. If it’s not solving any problems for me, why upgrade?

The windows team can keep being agile and delivering frequently. They could even become more agile and keep delivering more frequently as they’ve been doing so far this decade (an average of a 2 year release cycle).

This, however, is not enterprise agility.

If there were a lean system being used by Microsoft then the problem is clear. Microsoft is staying busy and building a big inventory of new OSes and there is no demand for what is being produced. From a lean perspective the message to Microsoft is clear. Stop what you’re doing.

Just-in-Time Operating System

For comparison, let’s take a look at that diagram for Apple’s OS X.

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How often does apple release a new OS? Just about every year. Even in this domain, Apple displays a truer agile principle:

3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.

The adoption of Apple’s OS is also quite heavily weighted to the newest version. More than half of Macs are running an OS that’s less than a year old. Fully 90% of Macs are running an OS that is newer than Microsoft’s most popular version of Windows.

What does this tell Apple? People are finding value in their newer operating systems. Applying the update is valuable enough to be worth the hassle and risk.

Should Apple invest more into the OS team? Maybe. A case could certainly be made for that. At a minimum, they shouldn’t slow it down. People clearly find a lot of value in what they’re producing.

More Agile < Enterprise Agility

As Microsoft demonstrates, you can have agile characteristics in a team or a division and not have enterprise agility. You can even be dominant in many industries and not really demonstrate enterprise agility.

What would enterprise agility look like at Microsoft?

I don’t know.

What is clear is that instead of investing so much talent into the Windows platform, they should be applying those talents to other problems that exist in peoples’ lives. People are telling Microsoft that they care less about the operating system updates than something else. It’s up to Microsoft to find out what that something else is, drop less valuable products, and focus their vast and immensely talented workforce to the problems that people would value having solved.

Microsoft has the talent to do almost anything they desire. But do they have the discipline to demonstrate enterprise agility?

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