Four Encouraging Signs that Microsoft Is Finally Getting a Clue

Last Updated Apr 5, 2010 5:10 PM EDT

The problem with having a big legacy business is that you end up having to support a bunch of old stuff -- which stifles innovative thinking. If anyone knows this issue, it's Microsoft (MSFT), which has had to support old versions of operating systems and applications for years. But actions over the last six months suggest that CEO Steve Ballmer is ready to start cutting losses and lifelines. It's about time if the company has a prayer of becoming innovative enough to compete with the likes of Google (GOOG) and Apple (AAPL). Here are just some of the more obvious examples that have popped up:
    1. Windows Server, SQL Server, and Visual Studio (main development tool) will phase out support for the Intel (INTC) Itanium CPU. Why be shackled to an old design as 64-bit chips that have from 64 to 96 processor cores are hitting the market?
    2. Internet Explorer 9 won't have support for Windows XP. The company needs to provide high performance and XP doesn't support access to the GPU to accelerate graphics processing.
    3. Microsoft's new Windows Phone 7 smartphone operating system, due out later this year, is a complete break from Windows Mobile and what runs on the earlier OS won't on the new one.
    4. There was no clear Windows 7 installation for XP users. They had to do a clean install and then add their applications and data.
      Why is all this important? Because Microsoft has been paralyzed for years by the need to drag all of their old customers into the future in as painless a way as possible. You can understand why -- if you remember that the company depends on Windows and Office for about four-fifths of its revenue. Lower the barriers to adopting a new version of software, and you potentially invite people to take their business elsewhere.

      Unfortunately, the other result is the engineering equivalent of trying to fly while wearing an old-fashioned diving suit with the huge metal helmet and lead weights: The past constrains every choice going forward. Instead of a sleek fighter, you get the infamously overwrought Spruce Goose. Dragging baggage along is something you don't see Apple do.

      Apple, Google, and other companies have been slapping Microsoft silly. The choice to cut the safety line and dare to be great -- or fail spectacularly -- is chancy, but probably the only viable one. If everything crashes, people will shake their heads knowingly. But if it works -- and it could, if the products are good enough -- then Ballmer will find himself in the pantheon of CEOs who were able to pull their companies out of a tailspin -- a group which includes IBM (IBM) former head Lou Gerstner and, ironically enough, Apple's Steve Jobs.

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        Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.